5 Common Customer Segmentation Mistakes to Avoid
Michelle FauntLeRoy, assistant vice president of segmentation, data product management at data management provider Nielsen Claritas, agrees. “A lot of people rely on household level data,” she says. “While it gives the highest performance in terms of being able to identify what different households are like, there’s a lot of holes in the data. … The smarter way to think about it, or the more productive way, is to think, ‘What kind of performance am I getting?’”
4. Getting too complex. “A lot of companies start out by trying to create a custom or really complex segmentation model or scheme and can’t implement it,” says FauntLeRoy. Marketers should begin with a few key metrics that are critical to their customers and build from there.
5. Lacking consistency in defining segments. Going through the process, metrics are not always consistently defined, which can provide inconsistent results. For example, says Kleinfelter, one-time buyers often get mixed up by firms. There are two types of one-time buyers: recent ones who have not had a chance to buy again and one-time buyers who bought a while ago and have not purchases since. These are two very different segments, and they require distinct marketing approaches.
Erdahl agrees that consistency is key, adding that some marketers have too many metrics they’re looking at and don’t stay focused on which ones they track and apply to programs. As a result, their efforts lack traction because the organization is running in too many directions.
No matter how marketers segment their customers, all the experts agree that it’s critical to make sure the data is clean and the results are analyzed from both a short- and long-term perspective to achieve positive progress.