The Value of Needs-Based Customer Segmentation

Posted by CarStory on Sep 6, 2016 11:58:35 AM

Few marking specialists are familiar with the concept of persona, which was popularized in 1998 by Alan Cooper in his book “The Inmates Are Running the Asylum”. Personas are fictitious models of customer or product users. They should be based on real-world information and contain enough detail to allow an understanding of why users have certain needs and goals. Personas are traditionally considered an interaction design tool but can also be used by marketing specialists to target consumer segments based on their needs, as opposed to traditional demographic-based marketing. Personas provide focus for ad campaigns, create empathy with consumers, and add context to web design choices.

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Personas are only as good as the data they are built upon. There are many ways to collect data for creating personas. What’s important is to think critically about your data, where it comes from, and what it tells you and does not tell you. Much of the data used to build personas comes from customer interviews or surveys, and the process can take from a few weeks to several months. Participants from the data are then clustered into groups that share similar needs. Looking at the demographics after the initial clustering helps prevent preconceptions from guiding the segmentation process.

One lesson we learned from our personas here at CarStory is that a vehicle’s price means nothing in a vacuum. Two of our personas are moms: Kelly (yes, we give the fictitious characters real names) is a mom on a budget, while Victora is an older mom who is shopping for her teenager. If we had created our marketing content based on demographics alone, we probably would have assumed that Victoria, the more affluent of the personas, considers price less important compared to Kelly. It turns out that both have a price tag in mind (who doesn’t!?) but the value of that price means something different to each one of them. Kelly is concerned with the vehicle’s maintenance cost while Victoria wants the cost of the vehicle to be justified by its safety features. Needs-based personas allowed us to discover the meaning of value.

Interested in seeing this concept in action? Download the Personas packet.