When talking to marketing managers, the subject of segmentation often comes up. The conversation can seem forced and usually takes a turn from casual talk about business to a certain bitter formality, probably because now we’re talking about data. These marketing managers have never tasted our variety of data, theirs is like the grubs on Fear Factor .

Expensive : Complicated : Useless

These are words they have used to describe segmentation! Further investigation usually reveals that their segmentation study was conducted so long ago that no one really remembers why. In one case, some muckety-muck told a group of analysts to do it and so they did exactly what he told them to do. No one really knew why it was being done.

Of course then nosy consultants like me come along and ask the question. Why did you do this segmentation? What does it all mean? It used to shock me when they would say that “it’s just the way we have always done it”.

Segmentation is not about grouping data for the sake of grouping data. Segmentation should have purpose. It should be used to solve a particular problem. It is useful for determining sales regions/territories, marketing message and campaign optimization, risk management, web visitor behavior classification etc etc etc.