I have no qualms whatsoever about challenging marketing orthodoxy. In fact, I do it all the time (or, at least I try).

So, it was with that perspective that I was intrigued by a recent Ad Age guest commentary on the use of customer segmentation in marketing. The provocative headline of the piece,"The Death of Consumer Segmentation," ensured that I would read it. Because, I am a strong proponent of having a clear understanding of who you are marketing to. The commentary, by Michael Fassnacht, an EVP of consumer intelligence at DraftFCB, makes its case based on three observations:

• Traditional views of consumer segmentation are changing dramatically because of the volatility of the current society and culture, and the major changes wrought by the recession (makes good sense to me).
• People are frequently part of different consumer segments…and they like it that way (I never thought personal "choice" was actually factored into which segments we placed consumers).
• Consumers are gaining more control of marketing activity (I certainly agree with that).

After that impactful headline, Mr. Fassnacht equivocates by stating that the "shift from brand controlled segmentation to self enabled segmentation" does not really diminish the need for marketers to understand their various segments and tailor their messages and offers accordingly. I agree.

For me the bottom-line here is that there are new marketplace and demographic factors that you need to consider in identifying and clarifying your consumer/customer segments, but that does not mean the practice is dead. Far from it. It is probably more important than ever before.

A few years ago my firm did an in-depth customer segmentation study for a huge retailer of outdoor supplies (hunting, fishing, camping, sports, etc.). This category leader had never done a customer segmentation before. As we got into the research process we quickly saw that they were missing a lot of opportunities (and wasting plenty of money) because of this lack of a clear picture of who they were targeting and what made them tick.

More recently we’ve been working with a leading healthcare company that is finally getting serious about mapping its customer segments in one of the brand’s major business sectors. This enhanced customer understanding is already having a profound effect on the marketing communications aimed at the sector, product development and sales operations (including training).

Again, customer segmentation is more important than ever before. It ain’t dead!

When we undertake a customer/consumer segmentation strategy, we examine four key factors:

• Needs
• Behaviors
• Attitudes
• Demographics (mainly for consumer brands)

By mapping our clients’ customers and/or consumers against those four areas, we can start to identify the segments that are most valuable and targetable. And, that is a critical building block to a successful marketing campaign.

As they say, you can’t always judge a book by its cover. This recent Ad Age commentary had some good thinking in it regarding how to optimize your customer/consumer segmentaiton activities. But, you had to first get past the misleading headline.

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