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61% of Marketers Don’t Believe in Consumer Segmentation

Consumer Segmentation Drop
Consumer Segmentation Drop

In today’s rapidly evolving digital landscape, marketers face new challenges in understanding and engaging with consumers. Traditional methods of consumer segmentation, which categorize customers based on shared traits, are being called into question. Recent research indicates that 61% of UK marketers believe consumer segmentation is an outdated marketing method, with 63% considering it totally unfit for purpose. This article will explore the changing landscape of consumer segmentation and its implications for marketers.

The Rise of Consumer Complexity

Consumer behavior has become increasingly complex, particularly in the wake of the pandemic. With easy access to information and a plethora of choices, consumers’ priorities, preferences, and purchasing habits can change at any given moment. Marketers now face the challenge of understanding and targeting these ever-evolving consumer behaviors.

According to a survey of 500 UK marketers conducted by Treasure Data, 86% of respondents update their customer segmentations at least every two years. However, more than half (56%) still struggle to effectively target their audiences. This indicates that while marketers recognize the need for segmentation, they are grappling with its practical implementation.

The Limitations of Traditional Segmentation

Traditional segmentation models fix consumers into rigid and permanent groups, failing to account for the fluid nature of consumer behavior. As a result, marketers are seeking alternative approaches to better understand and engage with their target audiences.

Treasure Data’s research suggests that consumer “situationships” may hold the key to more effective segmentation. Situationships refer to momentary mindsets based on an individual’s current mood, needs, priorities, and circumstances. By segmenting consumers based on these ever-changing situationships, marketers can gain a real-time understanding of their audiences and tailor their messaging accordingly.

The Power of First-Party Data

To successfully implement this new approach to segmentation, marketers must leverage first-party data. First-party data is data collected directly from consumers through interactions with a brand’s website, app, or other touchpoints. It provides valuable insights into consumer behavior and preferences, enabling marketers to create more personalized and targeted campaigns.

However, many brands struggle with data blind spots, preventing them from obtaining a comprehensive view of their customers. In fact, 64% of UK marketers admit that data blind spots hinder their ability to understand their customers fully. This highlights the importance of investing in data management strategies and data security measures to gain consumers’ trust and achieve the gold standard of targeting: segmentation by mindset and situation.

The Modern Consumer Mindset

To further understand the potential of situational segmentation, Treasure Data surveyed 2,000 adults in the UK to identify the most prevalent consumer mindsets. These mindsets, or situationships, provide valuable insights into the diverse range of behaviors exhibited by consumers.

The survey revealed several common situationships, including “Family Firsts,” “Safe Shoppers,” “Infrequent Buyers,” “Purpose Shoppers,” and “Seasonal Spikers.” Each of these mindsets represents a distinct set of needs, priorities, and circumstances that influence consumer behavior.

Redefining Consumer Segmentation

The emergence of consumer situationships challenges the traditional notion of segmentation. Rather than grouping consumers into rigid categories, marketers must adapt to the fluid nature of consumer behavior and develop strategies to engage with consumers in real-time.

To achieve this, brands must prioritize the collection and analysis of first-party data. By understanding the nuances of consumer mindsets and tailoring messaging to specific situationships, marketers can enhance their targeting efforts and deliver more relevant and personalized experiences.

Overcoming Challenges

Implementing a new approach to consumer segmentation comes with its own set of challenges. Marketers must address data blind spots, invest in data security measures, and gain consumers’ trust in sharing their data. It is crucial for brands to prioritize transparency and communicate the value of data collection and analysis in delivering a better customer experience.

Additionally, marketers must adopt technology solutions that enable real-time data processing and analysis. This allows for dynamic segmentation based on changing situationships, ensuring that marketing efforts remain relevant and effective.

The Future of Consumer Segmentation

As consumer behavior continues to evolve, marketers must adapt their strategies accordingly. The traditional methods of segmentation are no longer sufficient in capturing the complex and ever-changing needs of consumers.

By embracing the concept of situational segmentation and leveraging first-party data, marketers can gain deeper insights into consumer behavior and deliver personalized experiences. This approach allows for more effective targeting, ensuring that marketing messages resonate with consumers and drive meaningful engagement.

The future of consumer segmentation lies in understanding the dynamic nature of consumer behavior and developing strategies that align with these changing needs. By embracing innovation and adopting a customer-centric approach, marketers can stay ahead of the curve and drive success in an increasingly complex marketing landscape.

See first source: Marketing Tech



Featured Image Credit: Headway; Unsplash – Thank you!

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