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4 Challenges in Customer Segmentation

Customer segmentation is probably the most important concept in marketing. But it is also one the most difficult to do well. In this post, I reflect on four key issues that marketers must address in their segmentation work:

  • Scope of segmentation – What is the appropriate scope at which segmentation studies should be conducted? Specifically, how do we reconcile the level of depth required by engineering with the breadth required by cross-business alignment?

  • Inbound versus Outbound Use of Segmentation – How do we reconcile segmentation variables that are useful for inbound product development decisions versus segmentation variables that are useful for outbound product marketing decisions?

  • Refresh Cycle and Stability of segmentation – How we ensure that segmentation remains relevant between the time the product is initially conceptualized, through development and into go-to-market? How often should we “refresh” segmentation studies to ensure that they are tracking changes in the market structure or demand?

  • Segmentation for Multiple audiences – how we approach segmentation and target