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Market Research and Coronavirus: 4 Ways to Test Your Segmentation’s Relevance

Posted On  March 30, 2020
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“Can I still use my segmentation?”

We’ve heard this question a lot since the outbreak of COVID-19. In a 2015 blog about retaining or refreshing your segmentation, I argued that you know it may be time to replace your segmentation if your market has experienced a major disruption. It’s not just game-changing innovators like Uber, Harry’s Razors, or Blue Apron that can disrupt your market.

The COVID-19 crisis is dramatically impacting most people’s lifestyles, as well as their mindsets and priorities. As we turn the calendar to April, it’s anybody’s guess how long people will be asked to mostly stay home. As long as consumers remain socially isolated, they will adopt new habits, try new brands, and reevaluate their priorities. Some of these changes will be permanent.

Here are four steps to take to see if your segmentation is still a valid lens into your market, determine whether the target segments you chose in the good old days are still the ones you should be prioritizing, and set yourself up for success for the next few years.

Step 1: Take a Gut Check When Considering Your Segmentation

First and foremost, you should evaluate your segmentation in a COVID-19 world using common sense measures. You might need a new segmentation if…

  • The framework just feels “all wrong” in the new world order. But be careful; your assessment may be driven by anxiety about your business, and you may want to tap an outsider for a second opinion. We’re happy to lend a set of fresh eyes.
  • Your ongoing tracking shows that any segment has become quite large. Or, similarly, a target segment has gotten quite small. If so, it’s probably time to redefine your segmentation. If your typing tool is not in an ongoing brand tracking study that is fielded at least monthly, you should launch a separate, short tracking survey to see if shifts in attitudes and behaviors are causing substantial changes in your target segment sizes or your performance within them.
  • There’s a clear disruptive dynamic in your marketplace. Even relatively stable segment sizes do not guarantee that your segmentation “still works.” It may omit a key new dimension that didn’t exist (or didn’t matter much) at the time your framework was built. Consider applying other research tools such as Online Anthropology or a digital community, which can help you quickly and efficiently identify new dynamics that aren’t quite as obvious to the naked eye. If these new dynamics reflect likely shifts in consumer habits that may endure, you should get started on drafting a new segmentation survey to launch as soon as the situation warrants. The “when” will vary for every brand and category.

Step 2: Update Your Segmentation Typing Tool

If your segmentation passes the gut check and seems to still be relevant, look at your segmentation typing tool (the set of “short form” or “golden questions” that classifies new research participants into segments) and ask yourself the following questions:

  • Are any of the typing tool statements about category-relevant behaviors that people can’t engage in right now, but likely will resume later? If so, consider temporarily modifying that verbiage (e.g., “Before the pandemic, I often fired up the grill for parties”). This will allow you to continue to analyze your brand or ad tracker through a consistent lens, as well as recruit people for concept tests related to future-oriented innovation targeted to that segment.
  • Do any of the items come across as insensitive in the current environment? If it’s just one or two, modify the wording of those items slightly. If the whole thing feels like it might be off-putting, add a sensitive introduction to the tool, which acknowledges the situation and how people may be feeling.

Step 3: Reassess Your Target Segments

Even if the segmentation framework still seems relevant, your targets may be changing in important ways, or you may need to reassess who to target.

  • At a minimum, your target segments are likely shifting their media habits, hobbies, interests and potentially even values during this time. Consider doing a profiling study to see how and where you need to talk to your targets during this unprecedented time.
  • But first be sure those are even the right segments to prioritize these days. The segments that used to have the greatest potential, defined by economic opportunity in the category and capturability by your brand, may no longer be the most attractive targets. To assess this, you need to re-size the segments (percentage of people, occasions, and dollars) and reassess your brand’s competitive position with each. If you can’t do this in your ongoing tracker, launch a new study to assess this; consider fielding at least a couple of times, a few weeks apart, in order to observe ongoing shifts.

Step 4: Consider Building a New Segmentation

If your segmentation failed the gut check (due to new key dimensions or emergent consumer habits that are likely to endure), you should start the process of designing your next segmentation.

Since segmentation studies are foundational, they are lengthy undertakings that provide strategic guidance after a few months rather than tactical guidance after a few weeks. Take advantage of the social distancing time -frame to identify the new dimensions, get stakeholder buy-in, and draft and program the survey. This way you will be ready to launch data collection as soon as the time is right. Again, the “when” will vary by category.

As with all things pandemic-related, being ahead of the curve helps you flatten its impact on your life and your business. If you beat your competitors to the realization that the old segmentation of your category needs to be evolved, you will be in a position to win when the market rebounds.

 

Written by Hilary DeCamp
Chief Research Officer
As Chief Research Officer, Hilary runs LRW’s advanced analytics function and personally specializes in market segmentation studies. In addition, she leverages her 20+years of experience to consult with a wide variety of clients on study and questionnaire design, sampling and weighting, online data quality management, cross-cultural comparability, and analysis in report writing. She holds a BA in Quantitative Psychology from UCLA and earned her Masters in Marketing Research at the University of Georgia. Follow her on Twitter at @DecampHilary

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