Market segmentation as you know it has become more complicated today than ever before. Capturing data in CRM systems, doing primary research, etc. all help, but the ways of segmenting we’ve learned don’t allow you to see your customers in their natural space. Sure, sales, marketing and customer service teams capture a lot of information, but is it insightful? Is it useful in understanding the segment? Or is it just what ‘they heard’ and made a note of?

There is a lot of hype around social media tools like Twitter, Facebook, YouTube, etc., but the fact remains that social media (as a concept) is the first time that organizations have ever been able to see, listen to and get to know their customers in public spaces (again, in a ‘natural’ setting). Social interactions tend to be natural and not forced or coerced, which often leads to deeper insights.

Let’s look at all of the “-graphics” to get a better understanding of segmentation and how segmentation has changed.

Demographics & Firmographics

Ah, demographics and firmographics…the marketers tried and true methods of slicing and dicing their markets. We know them well, don’t we? They were drilled into our heads as marketing majors and have stuck with us through the years as the best practice for market segmentation.

But the days of mass marketing have come to an end and it doesn’t make sense to segment markets only to treat them as if they all live, think and buy the same way.

As you know, demographics allow B2C marketers divvy up their markets by size, age, income, education, ethnicity, etc. and firmographics allow B2B marketers to manage their markets based on employee size, revenue size, industry, number of locations, etc.

Does looking at someone’s income really provide an indication of how, where, when or why they part with their paycheck? Does knowing a business buyer’s revenue size tell you exactly how they manage their budgets or what types but products/services are purchased? No and no. Demographics and firmographics truly leave marketers empty handed when trying to get a deep understanding of markets.

So what’s a marketer to do in order to get deeper insights into their market in order to segment them properly? If demographics and firmographics are all you are using, consider adding psychographics, sociographics and ethnographics to the mix.

Psychographics

Want to know what your customers’ values, attitudes and lifestyles (VALs) are? Then psychographics should be a part of your segmentation mix. While psychographics have been around for quite some time, they often aren’t used to their full potential. While the VALs segmentation seems strongly linked to B2C marketing, it’s important for B2B marketers need to understand is that just because someone is buying in a business situation it doesn’t mean that they don’t have certain attitudes or values when it comes to products and services (i.e. “I want the best bang for my small business budget!”). It is smart and safe to assume that many consumers carry their VALs with them into the office. But, is psychographics even enough to really know your customers?

Sociographics

If you are looking for the ability to connect with your customers at a level much deeper than demographics, firmographics or psychographics, consider sociographics. Sociographics allow marketers to relate to customers as individuals. Remember one-to-one marketing of yesteryear? It was a great concept and made CRM systems very popular. But today, social media plays an important concept in marketing. By social media, I don’t mean using tools like Twitter, Facebook, blogs, forums, communities, etc. but the two-way conversations these tools allow for. As you get to know customers online, you’ll be able to determine their individual values, attitudes, friends, hobbies, passions, who influences them and more. Essentially, sociographics allow you to discover what makes your customers really tick.

[Image: Stefano Maggi]

Ethnographics

What is ethnography? Basically, it’s about understanding your market’s everyday life where they live it and from an insider’s point of view. Meaning, you understand the market because you view them in their natural settings. Take for example, Graco’s marketing and social media team. A lot of them are moms and as such they can relate and market to moms because they understand the needs/wants moms have.

Social media, again, is one way to understand the common values, lifestyles, hobbies, needs, etc. that drive people to join communities and forums of like interests. Typically these types of online groups have their own culture, speak in terms that are unique to the group, and they often help or influence each other to make purchasing decisions. Relating to your market in this manner allows you to seamlessly blend in with it.

[Image: Gina Zacharias]

What’s The Answer?

Marketers have more tools than ever at their disposal these days. Between CRM systems and social media monitoring tools, marketers can gain a lot of insights into their markets. With social media being still so new for many organizations, it will take time to truly understand the shift from demographics and firmographics to sociographics and ethnographics.

The key here is to understand that it will take a lot of time, roll-up-the-sleeves hard work, patience, strategic savvy and management. You can’t buy a list that tells you this data and you surely should not jump off the plank. Your starting point should be audience research analysis and training on how to properly engage customers in their surroundings. Once you have that down, the next steps will be finding tools and determining a strategy to pull it all together in a manner that provides a valid return.

Your thoughts? How has social media affected how you do market segmentation for your B2C or B2B customers?

[*NOTE: This post originally appeared on the Serengeti Communications blog, Endless Plain.]

[Image Source: Talk, Inc. Blog]

Marketers with enough years under their belt know what spin is and pretty much know they can’t get away with it —prospects and customers are just too savvy these days. Marketers involved in social media know what transparency is and know that customers expect it.

Recently I came across a press release from Cone [hat tip: @JackiePeters] regarding their recent 2008 Cone Business in Social Media Study.

According to the survey:

• 60 percent of Americans use social media, and of those, 59 percent interact with companies on social media Web sites.
• 93 percent of Americans believe a company should have a presence in social media while an overwhelming 85 percent believe a company should not only be present but also interact with its consumers via social media.

(Social media was defined as: Technology facilitated dialogue among individuals or groups, such as blogs/microblogs, forums, wikis, content sharing, social networking, social bookmarking and social gaming. According to their spokesperson Andrea Larrumbide, the survey was conducted with a “pre-existing panel of respondents. We screened for prior usage of social media.”)

Those numbers didn’t sit quite right with me, so I relied on the numbers I’ve shared in the past. There are 301,621,157 people in the USA, of which 220,141,969 have Internet access.

Now stating that 60 percent of Americans use social media and 93 percent believe a company should have a social media presence (93% is about 204,732,031) seems to be a bit of a stretch.

I’d venture to guess that if I went to Any Town, USA and asked a group of Average Joes/Janes if they use social medial and believe companies should have a presence, I am pretty confident they wouldn’t have a clue as to what I was talking about. Heck, some marketers I speak with don’t even get social media!

eMarketer reported on September 3, 2008 a recent survey from Synovate that stated only 40% (5,200 of the 13,000 surveyed globally) of the Americans surveyed knew what a social network was. The eMarketer report also shared stats from a Universal McCann survey that states only 23.4% of the American population utilizes social networking with blog readership at: 23% daily, 42% weekly and 19% monthly.

These numbers seem to be a little more realistic.

Knowing about the above surveys, I reached out to Andrea Larrumbide and asked for a copy of the survey and the results (an executive overview like Universal McCann’s would have been great) and was told that they only share that information with paying customers. Interesting.

Skepticism aside, what can we learn about social media surveys and how we share data at a time when social media has become an important part of how we interact and do business?

• Don’t spin findings. Doesn’t “93% of those surveyed believe…” work better?
• Share your survey and findings in an executive format—it’ll provide credibility (that’s a no-brainer)
• If you are going to invest money in primary research, survey people outside the echo chamber

And for those researching social media or utilizing social media research to justify their plans, etc., don’t get caught up in research numbers that state what you want to hear. Question them.

Having done a fair amount of market research for the purposes of PR and thought leadership, I understand the urge to want to spin results and be the one company with the findings that justify its existence, but I am not a market researcher by trade.

That said, what’s your impression? Do you agree with my spin factor assessment? What tips would you offer to marketers and social media professionals when it comes to research?

[Photo: iStock]