Construct a Segment Profile within Minutes

Building a Segment Profile

If you have consumer data, then you can create many segment profiles!

If you have access to market research survey data or a customer database, then building segment profiles are very quick and simple to do using a Excel spreadsheet.

Here is a free Excel template that has been built to allow you to create segment profiles quickly and easily… segmentation-tree-template 2021

Video on the Excel template to develop your Segment Profiles

Here is a YouTube walk-through of how to use the free Excel template to construct segment profiles, using a segmentation tree approach. This template will help you develop many segment profiles within a few minutes from the same data set.

What Is a Segment Profile?

A segment profile is a comprehensive description of a specific market segment, detailing its key attributes based on available consumer data. These profiles include demographic, geographic, behavioral, and psychographic information, offering a clear picture of the consumers within the segment.

Key Components of a Segment Profile:

1. Demographics: Age, gender, income, education, occupation, family size, etc.
2. Geographics: Region, climate, population density, or urban/rural distinction.
3. Behavioral Characteristics: Purchase patterns, brand loyalty, usage rate, price sensitivity.
4. Psychographics: Lifestyles, attitudes, values, interests, and opinions.
5. Needs and Benefits: Specific benefits sought from products or services, such as convenience, quality, or cost-efficiency.

How to Build Segment Profiles

If you have access to consumer data, such as market research surveys or a customer database, building segment profiles can be a straightforward process using tools like Excel or segmentation software.

Steps to Build a Segment Profile:

1. Gather Consumer Data:
   • Use survey data, customer databases, or third-party research.
   • Include variables relevant to segmentation bases (e.g., demographics, behaviors).
2. Organize Data in Excel:
   • Create a spreadsheet with rows for consumers and columns for segmentation variables (e.g., age, income, purchase frequency).
   • Use filters or pivot tables to identify patterns within the data.
3. Segment the Market:
   • Split the data into distinct groups based on key segmentation variables (e.g., high-income vs. low-income, frequent vs. infrequent buyers).
   • Use a segmentation tree for structured division (explained below).
4. Describe Each Segment:
   • Summarize the segment’s attributes, including key statistics (e.g., average age, median income, geographic concentration).
   • Highlight unique behaviors, preferences, or needs.
5. Refine Profiles:
   • Add qualitative insights, such as customer testimonials or psychographic trends.
   • Include visual aids like charts or graphs for clarity.

What Is a Segmentation Tree?

A segmentation tree is a structured method for dividing a market or customer database into smaller segments. It involves sequentially applying filters or criteria (e.g., age, income, loyalty) to group consumers based on shared characteristics.

Example of a Segmentation Tree Process:

1. Start with the total market.
2. Apply the first filter (e.g., age: under 40 vs. 40+).
3. Apply additional filters within each group (e.g., income: <$50,000 vs. $50,000+).
4. Continue until you have distinct, manageable segments.

The free Excel segmentation tree template mentioned allows you to:

• Input consumer data.
• Use predefined filters and criteria to separate segments.
• Automatically generate detailed segment profiles for analysis.

The Role of Segment Profiles in Marketing

Segment profiles are invaluable for shaping marketing strategies and decisions. Here’s how they are used:

1. Target Market Selection:
   • Profiles help evaluate segment attractiveness based on size, profitability, and alignment with company goals.
2. Tailored Marketing Mix:
   • Detailed profiles enable customization of product, price, promotion, and distribution strategies to meet segment needs.
3. Understanding Consumer Behavior:
   • Profiles reveal insights into how consumers think, behave, and make purchasing decisions.
4. Positioning and Differentiation:
   • Profiles provide the foundation for creating unique value propositions and differentiated brand messaging.

Advantages of Building Segment Profiles

1. Enhanced Consumer Understanding:
   • Profiles offer deep insights into segment characteristics and preferences.
2. Improved Marketing Effectiveness:
   • Tailored strategies based on profiles lead to better consumer engagement and higher ROI.
3. Data-Driven Decision Making:
   • Profiles rely on objective data, reducing guesswork in strategy development.
4. Strategic Focus:
   • Profiles help firms prioritize high-potential segments and allocate resources efficiently.

Building Richer Segment Profiles

Large organizations with access to extensive customer data can create more nuanced and comprehensive profiles. For example:

• Retail chains can track purchase history to build profiles based on shopping behavior and loyalty.
• Airlines can segment passengers by travel frequency, class preference, and loyalty program tier.
• Streaming services can create profiles based on viewing habits, content preferences, and subscription tiers.

For smaller firms or startups, even basic segment profiles created with limited data can be valuable starting points for refining marketing efforts.