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Market segmentation studies are crucial for understanding the total addressable market and identifying lucrative segments that present significant business opportunities. These studies are integral to acquiring new consumers, maintaining loyalty among existing users, and enhancing lifetime value by capturing market shares from competitors.

In the consolidation of market research processes, Suzy excels by integrating segmentation studies into a unified platform. This integration allows brands to seamlessly collect and analyze data about their consumers, understanding what drives their behavior, and their perceptions of the category and competing brands. More than just a tool for refining brand messaging and product development, segmentation is foundational to business success across sectors.

However, the question arises: why aren't segmentation studies conducted more frequently by organizations?

Traditional Segmentation Studies

It’s not difficult to prove the value of a segmentation study, but it’s often associated with various pain points. For one thing, they’re expensive. On average, most companies spend up to $200,000 on a single segmentation study. They also take a long time to complete, typically up to four months. Because of the high cost and slow turnaround time, most companies only refresh their segmentation data every two to three years.

Beyond the time and cost, it can also be very time-consuming to align internal stakeholders on updating segments, size of prize, innovation, and branding implications- all of which are critical to business success.

In today’s world, that doesn’t really cut it. Consumer attitudes, behaviors, and preferences change at unprecedented rates. Even market segmentation studies completed a year ago may already be outdated- there has to be a better way to update and drive continual learning.

What is Dynamic Segmentation?

Market researchers and brands need segmentation studies that can keep up with constantly changing consumers. Instead of traditional segmentation studies, they can speed things up with Dynamic Segmentation.

Dynamic Segmentation uses a proprietary machine-learning algorithm to create accurate segments that inform a consumer’s intent and drivers based on a number of dependent variables, like loyalty and satisfaction — all in a much shorter time versus traditional segmentation.

The entire process starts with the algorithm leveraging different factors to create holistic segments based on participants' responses in the study. Some of these factors include:

Personality
Category attitudes
Functional benefits
Emotional benefits
Brand performance

Once these segments are created, you get immediate access to your targeted audiences. You can then conduct market research studies that address specific segments within the panel. This process takes only weeks to complete, which means that brands can segment often, keep segments fresh, and activate segments immediately by targeting them in-platform.

Drivers that matter

With Dynamic Segmentation, each segment is equipped with a custom driver analysis based on a dependent variable (like satisfaction or purchase intent) and provides an accurate summary of the experiences that drive the segment's behavior. This helps you understand your audience and aids the market research questions that you should consider asking your segment.

Let’s use a coffee shop chain as an example. The chain may be looking at expanding their menu and needs to test new ideas. Some of the drivers that they may consider include:

Why is a consumer visiting a coffee shop?
What time of day (breakfast, lunch, mid-afternoon)?
What do they purchase?

All of these questions are a critical component of the segmentation.

Whether it’s a marketing department looking to develop personas or a business development team looking to determine the area for expansion, properly selected drivers will help tell a better story and increase value for your team.

Dynamic vs Traditional Segmentation Studies

Let’s take a look at how a traditional method of segmentation compares to Suzy’s Dynamic Segmentation.

Step 1: Study Design

Before you start your study, it’s important to align on an approach for the study, success criteria, and its deliverables. Using the traditional method, this step is one of the most complex as this can make or break the study and its findings, not to mention that it can take up to two weeks to accomplish.

Suzy helps solve this problem by providing templates, therefore simplifying this decision.

Step 2: Survey Programming

Going from input collection to survey design is not easy. Best practices demand a survey soft launch so the survey can be properly tested prior to the official launch, which can be even more time-consuming and costly.

At Suzy, this step is completed right away along with Step 1 by utilizing the existing templates that have been completed in Step 1.

Step 3: Fieldwork

After creating your survey, it’s time to collect the sample. Managing fieldwork, like selecting survey vendors, to ensure it meets the sample plan is often stressful as there are a number of resources involved in the collection.

At Suzy we own our own audience and are able to receive results in minutes.

Step 4: Initial Analysis

The results are in and it’s time to analyze them. Segmentation is often described as a mix of art and science. Initial segment solutions typically need to be reviewed, iterated, and updated to make sense from a market and stakeholder perspective. There is often some guesswork involved in this process.

By contrast, Dynamic Segmentation is powered by a self-optimizing machine-learning algorithm. It takes the guesswork out of research and presents accurate and reliable segments.

Step 5: Report Generation

Segmentations frequently fail to result in action due to findings that are not easily understood or too challenging to implement.

At Suzy, reports clearly outline who your segments are as we utilize automation to assist with that. Suzy outlines how to use the segmentation results for actionability.

Step 6: Findings workshop

In this stage, you get to present your findings to your stakeholders and your efforts either pay off or become a source of frustration. If it’s the latter, it can become quite challenging as you have now invested three to four months in the initiative.

Suzy can help you make your findings workshop a success by providing outputs that include:

Summarize segment definitions, topic category attitudes, and perceptions
Break down segment profiles by demographic, attitudinal differentiators, and key need-states
Provide consumer target recommendations with supporting category driver-derived opportunity matrix
Batch typic tools for any off-platform needs

Step 7: Typing Tool Generation

Now that you have consensus on your segments, it’s time to incorporate them into your market research. Oftentimes, you have to pay more to “type in” your respondents and identify them for future research.

Suzy makes it simple and includes it in the cost. Type your panel, and it’s ready to go.

Summary

If the last two years have proven anything, it is that constant change is part of our everyday lives. Consumers who may have had a strong brand loyalty can quickly adapt their shopping behavior due to rising costs, limited supply, or travel costs. All of these factors change frequently, as does consumer behavior. It is, therefore, imperative that your segmentation studies stay fresh so you can stay ahead of the competition.

The Suzy Difference

At Suzy, we address this by simplifying the segmentation process, making it more accessible and actionable. Our platform enables continuous, dynamic segmentation that adapts to changing market conditions, providing brands with the agility to respond quickly and effectively. This approach not only reduces the traditional barriers associated with segmentation studies but also ensures that businesses can continually align with their target audiences, driving sustained growth and competitive advantage.

Suzy segmentations are:

Distinct and recognizable
Of significant size
Highly actional
Statically reproducible

Interested in diving deeper into Dynamic Segmentation? Book a demo with our team today!

What is a Dynamic Segmentation study?