Needs based segmentation – Why it pays to do some things worse than your competitors!

Needs based customer segmentation is a fascinating approach that helps get to the heart of what your customers want, and how  to differentiate your offer to them. We’ve worked on several exciting projects in this area and have recently released an ebook on how you might go about conducting a needs based segmentation among your customers.

Marketers have been using segmentations for years to target their customers more effectively.  And in the social media landscape it has become increasingly more important to keep communications highly relevant and engage with different, but defined, sections of their audience. Indeed, thanks to developments in high powered text analytics, it is now possible to segment and profile based on consumer perceptions expressed online.

Obviously you can segment customers/users/audiences in any number of ways, but if you are looking at maximising the use of your limited marketing resources then it probably makes sense to be needs based. After all, the basis of any solid marketing strategy should be based around delivering the needs of customers more effectively than the competition.  

Given the competitive element to anything you are offering, an organisation has to identify what elements of its services it needs to excel at, in order to supply a better offering than the competition. And to achieve this in the real world, when you have limited resources, there needs to be a trade-off. The organisation has to make some interesting choices (based on its customer needs) on the areas in which it will deliberately underperform compared with the competition, so that it can focus on its chosen areas of excellence.

This trade-off raises some very interesting questions, especially when the argument is turned around and pointed at the organisations which conduct the segmentations in the first place! Namely MR agencies and what it is they offer to clients.

From a client perspective MR agencies can often appear to be offering very similar services with little or no differentiation or service speciality. In a recent interview in Greenbook: anonymous client-side researcher and “Angry MR Client” Tweeter mentioned (among many other things!) something that should set the alarm bells ringing for how agencies position themselves: “Talking about early warning signs, the flashing light and siren sign comes on when I hear the “we do everything” pitch. Unfortunately, no one can be good at everything, so I consider a missed chance of showing off the agency’s competitive advantage, a lack of one. I always appreciate agencies more if they are honest about what they can, but especially what they can’t do”.

This is the cornerstone of a needs based segmentation (or lack of!). How can a buyer determine what a supplier is good at, or bad at, if suppliers are unable to clearly communicate based on audiences’ needs. And let’s be honest, if you can’t tailor a pitch to meet the needs of one client, then broader communications are going to be even less differentiated.

Many MR agencies find it hard to admit or let go of, what they are not good at and in doing so actually make life more difficult for the buyer who has to decide whether or not to use them!

And this has serious repercussions for the MR industry, because if buyers cannot easily determine what agencies specialise in they may use DIY research instead or develop specialist expertise in-house.

At DigitalMR we are experts in social media research and its applications to help clients make better business decisions. We conduct all of our projects online and specialise in three key areas – Social Listening, Online Communities and the application of Online Quantitative techniques. If there is an aspect of research we can’t or don’t do, we will tell you upfront (and find a partner who can). Simple.   

From multinational giants to small MR agencies, the same rules apply. Find out what your customers needs are and focus on them relentlessly. The rest is just distraction.