Visiting a CVS store today is about more than simply buying cold medicine and prescriptions to satisfy a short-term need. Visitors have core values of health and wellness that combine to form their identity and shape their choices at checkout and beyond. These needs and values are the building blocks for effective marketing segments that empower marketers to be more relevant, noted Martin Kihn, research vice president, Gartner for Marketing Leaders, in his session on Mastering Segmentation and Personas in a Digital World at the Gartner Digital Marketing Conference 2016.
In a marketplace where attention is short and relevance is king, clear segments and related personas are key to crafting messages that get noticed. Consumers readily opt-out of any channel with messages irrelevant to their needs or values.
The point of any segmentation activity is to divide large groups of people into smaller groups that improve relevance, and as a result, the effectiveness of marketing. Marketers use three core approaches to build segments: needs, values and clusters. However, it’s best to consolidate the first two approaches and focus on two main segmentation types: needs/values and cluster-based segmentation.
The needs/values-based segmentation approach is the most popular and includes variables related to money such as average order value, customer lifetime value, etc. Needs/values-based segmentation indicates who is and is not likely to buy a product or service.