Gail Goodman, writing for Entrepreneur, makes a great point about how audience segmentation can transform your email marketing, making it more relevant, impactful and effective.

Unfortunately, I have to take issue with her recommendations about segmenting your audience in the section titled “Selecting Your Segments”:

“To be effective, most businesses need only two or three segments, and it’s a simple process to begin. Start by deciding how you want to segment your list. What are the most important distinctions you make when deciding how to present your products or services to prospects? There are many questions you may ask yourself: What industry are they in? How big are their companies? What are their ages and genders? How old are their children? Where do they live? Form your questions based on the variables that matter most to your business.”

“I’m The Decider”

I see this approach all the time as companies seek to develop their marketing messages:  “Let’s sit in this room and decide what our customers want.”  Guess what?  YOU’LL BE WRONG.

The fact is that even if you have sophisticated data about what your customers buy from you, and even if you have demographic data about how much money they make or how old they are or how many kids they have, you can’t tell just by looking which of those elements (if any) are relevant in their purchase decision-making.  And the likelihood is that you DON’T have that sophisticated data in the first place, which means you’re sitting around a conference table with a very small sample of people who work for the same organization you do, trying to put yourself in the place of the customers you serve.

Bad idea.

Look From the Outside In

The truth is, it’s doubtful you and the other people you work with will EVER know all the various reasons people buy your stuff, instead of somebody else’s.  And it’s a sure bet that you won’t be able to intuitively figure out which of these reason are really significant in defining groups of people that you can craft marketing messages for.  In virtually every audience segmentation initiative I’ve worked on, the demographics of consumers have had almost no impact on the eventual audience segments revealed by the research.  The fact is, unless you’re selling feminine products or baby food, the motivation for purchase is likely to be based more on personal interests — “I like my food really spicy” or “I don’t care how a candle looks, I care about how it smells” — which are not going to be revealed by the age or income of the consumers in question.

Often, too, we tend to have blinders on about other key aspects of purchase motivation simply because we work for the company doing the marketing.  I worked with a great firm that made and sold luxury items.  When the research revealed that their customers identified Target and Walmart as places where they could find other “luxury” items like my client’s, the firm’s management was quick to argue that the customers were simply wrong — the products sold at those meg-retailers simply couldn’t be compared to the company’s high-end items.

In fact, it was company management that was wrong.  Because, like it or not, customers make up their OWN MINDS about our competitive set — and everything else about our brands, products and services.  We’re much better off understanding our customers’ motivations and perceptions, and crafting marketing messages that address them — for example, explaining why our products are better than what they can buy at WalMart — than we will ever be by ignoring them.

Learn What Really Matters

The best thing you can do for your marketing efforts — and for your business — is to learn what really drives purchase among your customers through audience segmentation research.  Find out WHY they buy what they do, and what they’re interested in.  If you can, find out for each and every customer you have.  The worst mistake we can make is to assume we know.  And the easiest thing to do is simply ask, and listen to the answers.

Recently I noticed that a former client has been running their old television spots — undoubtedly an effort to take advantage of the recessionary conditions and reduced advertising presence of their competitors, and to do it at a bargain-basement price to boot.

I applaud this company for recognizing that now is a great time to get the word out, and for devoting considerable marketing spending under difficult circumstances.  However, their approach illustrates some common pitfalls when trying to generate new income in tough times:

A Bad Message Then Isn’t a Better Message Now

Unfortunately, the decision to recycle old creative means that your messaging may be off.  For my old client mentioned above, it means that a campaign whose message was subsequently tested with their customers — and failed miserably — is the basis of an ad spend of many thousands of dollars.

And the pity is that this organization has much better information to work with — a statistically reliable customer segmentation model that identifies not only their target customers but also the messages that are most compelling to them.  Now, admittedly, they don’t have existing television creative supporting those messages — but that’s because the research showed television was not the most relevant medium.

This client would have been much more effective, I’d venture, by spending their money on a targeted campaign with relevant messages to key audiences.

Don’t Mistake Behavior for Motivation

Some organizations are lucky enough to have rich behavior-based data that can be very helpful in identifying customer groups for direct mail, email, and other marketing initiatives.

While this information is wonderful to have, in my opinion it doesn’t go far enough.  While it can clearly show purchase patterns to help you understand what people buy, how much and how often, it can’t tell you WHY they buy.

So your data analysis may unwittingly be grouping those to buy for themselves vs. those who buy as gifts — or those who buy for the scent vs. those who buy for the color.  Knowing the motivation behind purchase can help your messaging be more relevant — instead of marketing “purple candles” you can market “candles with a fabulous lavender fragrance” or “candles to match that purple couch”.

Disappearing Dabblers

Key to your marketing success these days is to recognize which customers are likely to stick with you even when the going gets tough.

An extensive audience segmentation research project for one of my clients revealed that fully 30% of customers for that brand were “dabblers” — they were casual shoppers, tried lots of different brands and didn’t stay with any for long.  While this segment can represent valuable revenue and profitability with the right strategy, the reality is that when things get tight they’re simply not going to retain enough brand loyalty to continue purchasing from you.

I am reminded of Robert DeNiro in “Meet the Parents” and his “Circle of Trust” — when you’re in, you’re in.  Your brand likely has die-hard customers who will continue buying from you no matter how much they’re trimming in other areas.  Some of these may be creatures of habit who use your product regularly and can’t imagine living without it — others may be “gifters” for whom your category is simply one of their chosen sources of gifts for friends and family, and for whom gifting fills a basic need.

Spending against these customers makes sense — they buy for a reason, and won’t suspend that behavior easily.  In addition, brand loyalists are much more likely to respond to frequency offers and promotions including “tell a friend” components — they love you now and will tell others.

Lack of Prospect Targeting

If segments of your current customers won’t respond to your marketing, then even more unlikely are prospects with similar needs to those “out of the circle” customers.  Once you know why your core customers stick with you, you can better find and message to folks like them.  Particularly if your understanding is based on need and not just behavior, your marketing messaging can do a great job of pulling the heart strings of those prospects most likely to become long-term brand loyalists.

How well do you understand the motivations of your customers?  How well do you know your core loyalty groups?  How targeted is your marketing message?  Don’t get so panicked by the current economy that you fail to consider your best message, to your best audience, and end up overspending and underdelivering.