Category: Academic Collaboration

Pointers on Behavioral Segmentation

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Behavioral segmentation is the practice of segmenting your customers based on what they do. I wrote previously about the basics of behavioral segmentation. During the last year, I’ve been putting it into practice through a customer segmentation project with a CASC business partner. Today I’d like to share with you some of the lessons I’ve learned through that experience.

NOT Just an Analytics Exercise

Behavioral segmentation has the advantage of revealing segments of similarly behaved consumers that you may not have thought of previously. It requires a lot of data crunching. There is no doubt about that. However, it is important to remember that behavioral segmentation is not entirely an exercise in numbers. If data crunching is all that you do, you risk creating segments that either are based on artificial or fake relationships or are not very actionable from a target marketing perspective.

Successful behavioral segmentation should be a collaborative exercise between your analytics team and those who have a good grasp of your business and your customers. The latter are most likely found in your marketing or sales department. The process of behavioral segmentation should be developed as an iterative process that goes back and forth between analytics and marketing. The analytics team should start by understanding from the marketing team the purpose of the segmentation exercise, the observed behaviors at hand, and the capability of marketing to implement behavioral segmentation insights. Based on this initial information, the analytics team can produce an initial set of behavioral segments based on customer data.

This initial segmentation scheme should be presented to the marketing team both to make sense of the results and to see if meaningful actions can be taken to target each segment. The input from the marketing team is then fed back to the next round of data crunching to adjust the segmentation focus and approach. This process is repeated until both sides are satisfied with a meaningful set of segments to be implemented in practice.

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Leveraging Your Academic Community

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Update note: Sorry I was made aware that the links in the article did not work properly. The problems have been fixed.

If you have been reading my blog for a while, I hope you have come to the conclusion that the type of research marketing academics do is more than just nerdy math or lab experiments. It can be highly relevant to marketing practice. In my career as a marketing professor, I have collaborated successfully with businesses large and small. Such collaborations have been highly gratifying for both the businesses and I. If your business has not been tapping into the marketing academic community around you, you may be missing a great opportunity for knowledge discovery and innovation. In this article, I would like to offer some advice on how to leverage the academic community around you.

Why Collaborate with the Academic Community?

There are many benefits to collaborating with the academic community. I will highlight some of the key benefits here:

  • Access to cutting-edge research methods and tools that you and your staff may not be well versed in. Examples include sophisticated data analytic models, complex experimental design, clever primary data collection methods, etc.;
  • Building reliable and generalizable knowledge based on validated theories rather than just a hunch;
  • Designing and conducting rigorous scientific tests to yield high-quality results that you can trust;
  • Gaining a fresh, non-conventional way of looking at your problem because of different academic vs. practitioner thinking styles;
  • Cost savings compared to hiring external consultants, as many academics’ primary motivation is to publish instead of monetary goals. The mantra in the academic community is Publish or Perish!

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