What are the most common segmentation mistakes in B2C markets?

Demographics are certainly important, but they often fall short in truly understanding users' needs and behaviors. -> To improve segmentation, I shifted to "Jobs To Be Done" (JTBD) framework. -> Instead of relying on demographic data alone, it's more effective to understand the specific jobs or tasks customers are trying to accomplish with your product. -> Demographics, on their own, rarely capture the full complexity of user behavior and preferences.

One prevalent segmentation mistake in B2C markets is solely relying on demographics. It overlooks crucial psychographic and behavioral insights. Effective segmentation delves deeper, understanding the "why" and "how" behind consumer choices, enabling more precise targeting and tailored marketing strategies that resonate with individuals on a personal level.

Relying solely on demographic factors for customer segmentation is a common mistake. While demographics like age, gender, and income provide some insights, they don't capture customer needs and behaviors comprehensively. This approach can lead to large, diverse segments that are hard to target effectively. To create more meaningful segments, it's crucial to combine demographic data with psychographics, attitudes, values, and behaviors. This holistic approach results in better, more actionable insights, enabling businesses to understand and meet customer needs more effectively.

🚫 Avoid Segmentation Pitfalls! I'd stress the importance of going beyond demographics deep into psychographics and behavior. Never neglect customer feedback - it's a goldmine. Please make sure you're neither over-segmenting nor under-segmenting. And, once segments are formed, keep them in stone; constantly test and iterate. Clean, sufficient data forms the backbone of segmentation, so prioritize its quality and comprehensiveness. By sidestepping these pitfalls and focusing on well-rounded research, product managers can create effective segmentation that resonates and drives results.

Explore customer attitudes, values, and lifestyles. Behavioral segmentation unveils actionable insights into consumer habits and allows for more targeted and effective engagement strategies.

Talk to your customers every single day. Continuous Discovery Habits is a fantastic book written by Teresa Torres that tackles the idea of talking to your customers as often as possible. She details how every company should be in a continuous state of discovering what customers want, if customers are satisfied with your product and whether you are making the right products at all.

Neglecting customer feedback in segmentation decisions is a common mistake. Relying on assumptions or intuition without data validation can lead to misguided strategies. Customer feedback offers real insights into customer needs and experiences, ensuring a better fit between problems and solutions. It enables data-driven decisions, helps with continuous adaptation, and supports targeted marketing efforts. Incorporating customer feedback is essential for a successful segmentation strategy.

Center your segmentation around addressing customer needs, pains, and gains. Use customer feedback as a compass to identify segments that stand to benefit the most from your product.

A common mistake I observe is we continue to ignore behavioral data. Neglecting to consider how customers interact with your brand, their purchase history, online behavior, and engagement can be a significant oversight.

As a Product manager you can never ignore customer feedback when it comes to B2C products. PMs are ideators so creating assumptions and hypothesis about potential customers is essential part but you need to validate it by working backwards with the users and analyzing user data to figure out and segment users according to their characteristics for e.g. frequency of use. This will help to figure out who are potential customers which you need to prioritize for your product and meet their needs and solve their pain points. You can leverage surveys, closed user group study, quantitative and qualitative analysis, interviews to continuously refine and update your user segments as your product evolves.

Segmentation is a delicate balance, and making the mistake of over-segmenting or under-segmenting can have detrimental effects. Over-segmenting involves creating too many, often unviable, narrow segments, leading to resource and focus dilution. Under-segmenting, on the other hand, results in creating too few, overly broad segments that miss opportunities and fail to meet customer expectations. The key is finding a balanced approach where segments are both sizable enough to be profitable and distinct enough to be responsive.

Seek a middle ground that ensures your segments are both sizable enough for profitability and distinct enough for relevance. A balanced segmentation approach optimizes resource allocation, maintaining a focus that enhances efficiency without diluting efforts.

Going too far or going to shallow is always a problem. When it comes to user segmentation as a PM you need to strike a perfect balance to make sure it is relevant and viable for your product on a long term basis. If there are many user segments and multiple sub-segments it can get difficult to prioritize their needs and it can result into wholesome product but it may have features which are hardly useful for major users. This can cause high resource utilization and budget issues and ultimately mediocre product. If you under segment it may miss out opportunities to solve user needs and build an innovative product. This may result into losing competitive edge, less distinct product and low user retention overall.

I agree, because the more you break down your segments into smaller and smaller units. You tend to over, analyze them, and then end up making decisions, or deciding on features that actually impact a very small percentage versus a large percentage. It’s also important to recognize that segmentation is supposed to help paint a picture, not filling the dots.

Two things about this: First: Segmenting just on few properties will make things complex because one customer might fall into different segements, while what determines if they buy and/or stay will be determined by their experience as a person. This is why I'm a strong proponent of personas. Second: I'll be as bold as to say one team should never focus on serving more than 3 personas. Otherwise, it will just become too hard to keep it practical to use. The purpose of segmenting in the end is to serve the customer better by understanding them and their needs. When companies get bigger and serve a wider array they can get more and more personas. It will get too complex. That said, obviously this only works if teams are divided well... :)

Does your segmentation reflect today's market realities? 🤔 Many industries changed dramatically in recent years. Old models may now mislead. Clinging to pre-pandemic, pre-digital segments risks disaster. Re-evaluate them with fresh eyes. Watch for segments that: - Lost relevance - Emerged anew - Shifted behavior Let data expose category flaws. Update segments to match the present, not past.

Remember user segmentation is a continuous process. As your product evolves you have to review your user segmentation to make sure it is still relevant and if needed continue to update it based on data, changing market landscape and strategical product shift. As a PM you continuously learn about user pain points and solve those pain points through viable, feasible and innovative solutions, similarly research and update your user segments!

Failing to test and revise segments is a prevalent and detrimental segmentation mistake. Segmentation is not a one-time task but an ongoing, dynamic process. Product managers should avoid assuming that their segments are unchanging and accurate. Instead, they should continuously test segments through experiments and metrics to assess their performance and potential. Regular revisions are essential to account for market, customer, competitor, and product changes. Segmentation should be a continuous learning and improvement process, adapting to the evolving needs and opportunities of the market.

Not testing or revising segments, it's a common pitfall. Customer groups can change as people's preferences change. To avoid it: 1️⃣ you can make it a routine to check your customer groups regularly. You can do this as part of your yearly planning 2️⃣ you can have a team that keeps an eye on segments all the time. Usually it is a product or data analysis team.

Iteration is the key. Having a hypothesis to start with, and forming assumptions around it is where one can start. But as you progress and learn, it's important to revisit and revise the segmentation. Just like we tweak the formulas and algorithms!

Forgetting the value proposition is a significant segmentation mistake. Segmentation should serve the purpose of creating and delivering value to customers and achieving product-market fit. Product managers should never segment the market without considering how the product's value proposition aligns with the needs and desires of the segments. They should also avoid creating segments that lack a clear problem-solution fit or are misaligned with the product's value proposition. Segmentation should be a tool to identify, communicate, and deliver the product's value proposition to the right customers.

I do not believe if a PM does the job right he/she will ever forget about product's unique value proposition (UVP) while researching the user segments. Even when you are communicating with your users through survey, interviews, sessions keep the UVP, mission, goal at front and based on that drive the narratives whether through verbal or non-verbal communication. Always try to achieve product market fit in your space and later if the users are correctly segmented and researched, you can meet their unmet needs to create problem-solution fit.

Another common segmentation mistake is forgetting the value proposition of the product. Segmentation is not an end in itself but a means to an end. The ultimate goal of segmentation is to create and deliver value to the customers and achieve product-market fit. Product managers should not segment the market without considering the value proposition of the product and how it aligns with the needs and wants of the segments. They should also avoid creating segments that are not aligned with the value proposition or lack a clear problem-solution fit. Product managers should use segmentation as a tool to identify, communicate, and deliver the value proposition of the product to the right customers.

The crux of segmentation is to deliver value, but often, segments are defined without a clear line to the value proposition. This is like a function without a return statement; it does work but to what end? Segments should be crafted with the value delivery mechanism in mind, ensuring each segment experiences the product's benefits fully.

Identifying the level of awareness or maturity of customers regarding their own problem is crucial for delivering the value proposition. While the problem may be the same for many people, their level of understanding of the solution and the role our product plays in it can vary.

Not identifying the difference in between the buyer and the user. We might often end up missing on thinking about this in a B2C segment and end up over optimising for one of the two - to find out a gap in either adoption or retention.

Beyond these common oversights, consider the contextual shifts. Markets are like fluid networks, not static nodes. Cultural shifts, technological advancements, and even regulatory changes can redefine segments overnight. Vigilance and adaptability are your watchwords here.

The most common segmentation mistakes in B2C markets include failure to: - Measure performance to confirm outcomes and discover new segments not originally used - Test whether segment fulfills measurable benefit hypothesis - Safeguard consumer privacy through transparency and controls - Obtain approvals from business stakeholders, including privacy, compliance, marketing, and other relevant groups - Use real-time or timely data to ensure relevant segments - Optimize segmentation via multi-variate parameters - Align segments with marketing objective and customer journey - Match third-party segments with first-partner customer data - Validate segment data collection & organization prior to activation - Capture and act on user feedback