Are social media networks killing the practice of market segmentation?

Segmentation, the cornerstone of marketing

Most wouldn’t disagree with the view that since the 1950’s, when the practice of market segmentation began, it has been the cornerstone of any marketing strategy.  Define your market segments accurately then the follow on activities of targeting and positioning are much more effective.

                           

Have online social media networks and their ability to engage with individuals interactively and in real-time made the practice of categorising people into groups redundant? The answer has to be a resounding no! But it is changing.

Changing emphasis

Consumers are considerably more socially mobile and transient than when demographic segmentation was first being adopted by marketers.  Also, as result of the web and social media, consumers are much more informed and influenced (think Tripadviser), they have access to greater choice and their smartphones are doing all of this for them wherever they are. 

Therefore, the basic strategy of demographic segmentation and pigeon holing people into presumed and fixed characteristics is less relevant today. Grouping people into segments by geography, age, gender, profession and income and assuming they are never changing is not a great way to relate to your online audiences. 

Therefore, the emphasis is towards using the previously less used technique of psychographic segmentation.  Simply put, psychographics is about classifying people by their attitude and behaviour.  Using monitoring tools it’s possible to gain deep insight into users ‘sentiment’ towards a product or service whether it is positive, negative or neutral. You can also track consumers’ interests, opinions and interests. This form of social network psychographic segmentation is becoming known as ‘socialgraphics’.

Go where your segments are hanging out

Using social networks, brands are able to find where their traditional market segments are ‘hanging out’ online and engage with them.  These are self segmenting groups brought together through a common interest such as hobbies, sport, health, jobs etc. These are very fertile forums for brands to promote themselves to their exact target segments that are conveniently congregating in one place.

These communities of interest are intentionally being fostered by social network platforms who can charge brands to participate in them and include Google+ Circles and LinkedIn Groups. But there are scores of other online communities that brands can a join in with.

However, when entering social networks brands are participating in people’s social spaces and they have to earn the right to be there. These are places where users go to be informed, educated, supported and entertained, not to be sold too.  Therefore, the golden rule of social media marketing is not to overtly advertise in the traditional sense. All my research has found that when organisations do this their fans and followers leave in droves.

Pull- in your market segments

Some socially savvy organisations are using a strategy that I have termed ‘segmentation pull’.  This involves setting up your own hosted online community and ‘pulling’ in your market segments.  For example, one of Viapoint’s team master-minded Open Forum, an online community for SME’s hosted by American Express.  The community serves itself as well as Amex offering support and guidance to all facets of running a small business. Rather than advertising to the SME segmen,t Amex has ‘pulled’ or drawn in this segment.

Britmums is another example of segmentation pull. Britmums host an on online community of mothers and has fostered a community of 3000 bloggers. Each blogger gets on average 4000 page views per month creating an aggregated audience of 12 million. Mums are an ideal segment for many brands.

Influencing the influencers

About 10% of social network users generate 90% of the content. These are referred to as ‘Creators’ or ‘e-Influencers’. In fact they are bloggers. These people are highly influential and could be classified as a new market segment.

Influencers are often brand advocates and should be discovered and then very carefully nurtured in order to help exert their influence. But don’t ask them to transparently talk about your product or gratuitously give them something for nothing, you will alienate them. Give them something new and really interesting to talk about or review, that’s what motivates them. This technique is known as ‘Social Influence Marketing’.

There are also ‘detractors’ or ‘trolls’. These are also influencers but they will vehemently give brands a bad press and their words are contagious like no other.  There are plenty of examples where they have damaged brand reputation, so they need to be treated with kid gloves. No corporate or official responses to their posts.

Creators and detractors are arguably new market segments, albeit ones that come and go. But then again that’s how people behave and that’s what marketers can now tap into, behaviour.

Conversation marketing – the panacea?

Unless you only have handful of customers, one to one marketing is not practical. Yes marketers need to and can influence their few influencers, but it is not practical to try and have individual online conversations with your whole customer base as some self professed social media gurus will preach.

However, conversation marketing is still possible if you go back to principle of segmenting your customers.  You can have group conversations with communities of interest once you have found where they are hanging out or pulled them into your own online community.

In conclusion

Segmentation strategies are here to stay and in fact becoming increasingly important so ensure your social media marketing team is fully trained on the concept and working hand-in-hand with your customer insight or market segmentation teams.

Paul Fennemore is Managing Director of Viapoint. Viapoint is the leading Social Media Consultancy, Services and Training Provider.  Paul backs up what he preaches by grounding it on objective and extensive research. Paul is a researcher with Henley Business School and is often called to lecture on Digital Marketing, Social Media and eBusiness. Paul holds an MSc (Dist) in Digital Marketing.