Consumers are segmenting themselves.

November 6, 2009 at 9:15 am 1 comment

Before allocating resources, savvy marketers identify segments of the marketplace where they stand the best chance of making an impression that will lead to a sale. In short, they look for the “low hanging fruit”.

Big companies use sophisticated CRM (customer relationship management) software to track customer activities, compare them with other customers, and target new offers or custom-tailor support services. In theory, CRM sounds good, but it is complicated and costly.

According to an article by Nick Wreden in Strategy+Business…

A better alternative is now available: The rise in social networks and online communities, combined with the new era of the Web-empowered consumer, makes it possible for companies to reap the benefits of segmentation without many of its costs or complications.

Using self-segmentation information for marketing does present challenges. It must be accompanied by organizational changes. These include allowing or expanding customer input into such insular areas as product design, services, policies, and procedures, and may require that departments other than marketing and customer service open their doors to customers.

Marketing must de-emphasize product promotion and think bigger than the company’s brand, tuning into conversations and issues that customers and prospects face. Monitoring and responding to conversations among multiple communities is labor-intensive, and the signal-to-noise ratio can be low.

There are risks as well. The same community that offers an opportunity for a stronger relationship can also generate a backlash that hurts the brand and affects sales.

Read the entire article here.


Entry filed under: advertising, marketing, marketing coach, strategic planning.

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1 Comment Add your own

  • 1. Nick Wreden  |  November 8, 2009 at 12:41 am

    Thank you for commenting on this article. The article is a planned excerpt from the current book I’m working on dealing with ethnic, cultural and religious brand segmentation. Demographic, behavioural and other traditional segmentation data can change (which is one reason why CRM is expensive) but ethnic, cultural and religious forces define our very self-identity, which rarely changes. That means, among other things, greater resonance with the right messages and less of a moving target for marketers. But such segmentation creates its own problems — how do you differentiate, for example, the differences between first and second generation Hispanics? The only viable answer, I think, is self-segmentation.

    BTW: I’m looking for case studies among firms who have used ethnic, cultural or religious segmentation. If you’ve got a candidate, let me know: twitter/nickwreden

    Thanks again,



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