By Ashton Walz
What is Consumer Segmentation
Market or consumer segmentation is a market research approach that allows you to divide a brand’s universe of potential consumers into smaller groups or segments based on their characteristics, e.g., demographics, values, attitudes, behaviors, and geography. The segments are composed of consumers who have similar characteristics within a segment and differing characteristics from all other segments.
Once the consumer population within the market has been segmented, teams can assess and compare segments to understand which segments offer the most potential for growth, i.e., which group is most likely to find value and be motivated by your products or services and respond to your marketing, promotion, and innovation initiatives.
Creating Your Segmentation
When developing your segmentation, the idea is to create segments that feature members who are as similar as possible to each other but different as possible from members in other segments. To do this, brand teams work with SIVO to define the parameters that will be used to segment the market, i.e., behaviors, attitudes, psychographics, or demographics, location, etc. For instance, if you wanted to segment the breakfast food category, you might want to include demographics (e.g., presence of kids in the household), behaviors (e.g., whether breakfast is eaten in the home or out of home) and attitudes (e.g, level of commitment to healthy eating habits) to help define your segments.
Once a plan is in place, a survey will be developed, and data will be collected from consumers in your defined market. Survey respondents will be presented with a scale to rate the importance of a series of behavioral and attitudinal statements or participate in a trade-off exercise to choose one of four statements that is most important or best describes them.
With the data collected, segments are created using clustering analysis. The ideal number of segments for a typical market is 5 to 8. More than 8 segments can be overwhelming to manage and fewer than 5 may lump too many consumers together.
Once the segments are developed, SIVO Consumer Insights experts will develop detailed profiles or personas, using all the survey data to describe or tell a story about each segment. The profiles/personas highlight the unique attributes and behaviors of the segments for easy comparisons.
Applications for Consumer Segmentation
When analyzing the consumer segmentation, it is important to understand the best ways to use this valuable marketing research tool.
Targeted Marketing Campaigns
The first primary use is to develop targeted marketing campaigns. By understanding the unique needs, interests, and demographics of each segment, business teams can alter their marketing messages and promotional activities to resonate with specific segments to increase consumer engagement. When marketing communications have been written with a specific consumer segment in mind, consumers feel understood and are more motivated to make a purchase.
Optimized Distribution in Stores and Channels
Understanding the consumer segmentation within a market also helps businesses optimize their distribution and sales channels. Different consumer segments may have varying preferences for different store banners or channels. They might also have different preferences for online shopping, physical stores, or a combination of both. By identifying these preferences and behaviors, companies can allocate resources strategically, focus on the most effective stores and channels, and provide a seamless shopping experience for each segment.
Identify Market Gaps
Another significant use of consumer segmentation is to help identify market gaps where there are a lack of products or services that are currently meeting the needs of specific segments. Gaps in the market can then be translated into opportunities to develop new products or modify existing ones to cater to the needs of specific segments. This strategy enables companies to stay ahead of competitors, enhance consumer satisfaction, and build stronger brand loyalty.
Identify Additional/Secondary Markets
Consumer segmentation allows businesses to identify untapped market opportunities and potential areas for expansion. By analyzing the demographics, behaviors, and preferences of different segments, companies can uncover secondary or adjacent target segments that also align with their products or services. This knowledge enables strategic decision-making and facilitates successful market penetration.
Your Source for Expert Consumer Insights
At SIVO, Inc., we are dedicated to helping our clients develop and utilize consumer segmentation that reveals their consumer target. We design custom learning plans that will help you understand which segment of consumers hold the most potential for growth and then facilitate the development of action plans so you can connect with and serve your consumer target.
Contact us via our website form or email us at Contact@SIVOInsights.com today to schedule a discovery call!
Artificial Intelligence (AI) is revolutionizing industries, and marketing research is no exception. In the field of innovation, AI isn’t just a tool—it’s a transformative force. As market researchers strive to speed up timelines, generate breakthrough insights, and stay ahead of consumer trends, AI offers new opportunities. At SIVO, we believe in exploring AI’s strategic potential, balancing excitement with careful consideration of its limitations and practical applications.
AI’s Advantages in the Innovation Process: Speed, Cost, and Quality
AI offers unparalleled efficiency across all phases of innovation. For example, traditional brainstorming sessions might yield a few dozen ideas over several hours, but AI-driven generation tools can produce hundreds of concepts in minutes. Models like ChatGPT can produce ideas 200 times faster than humans, feeding researchers more possibilities and compressing the innovation cycle, enabling faster decision-making.
AI also delivers significant cost savings. Research shows that organizations using AI for innovation can reduce costs by as much as 85% through the automation of “front-end” work streams such as data analysis, ideation, and concept validation. By minimizing the manual labor required, AI allows companies to reallocate resources toward high-value strategic efforts without sacrificing quality.
And it’s not just about speed and cost - AI excels in generating high-quality ideas. Studies suggest that AI-powered ideation rivals, and sometimes surpasses, human creativity. AI isn’t just capable of producing novel ideas but is also highly effective in generating nuanced originality. Furthermore, the emerging field of synthetic testing allows AI to simulate human consumer sentiment, attitudes, and behaviors, enabling iterative, real-time refinement during the ideation phase.
Key Applications for Innovation Insights Work Streams
AI offers powerful tools for businesses throughout the innovation funnel, from discovery to launch. At SIVO, we’re particularly intrigued by AI’s role in the “front end” of innovation and the growing potential of synthetic validation. Key areas include:
AI is reshaping innovation research. Thoughtful adoption of these tools is essential for businesses that want to remain competitive in today’s rapidly evolving marketplace.
Challenges and Watchouts:
The Importance of Oversight in AI-Supported Innovation
While AI offers immense potential, it also presents important challenges:
In a field where accuracy and context are critical, these limitations must be accounted for. AI should not replace human creativity and research expertise but should instead serve as a collaborative partner that enhances researchers’ ability to innovate more efficiently and comprehensively.
Strategic Integration of AI for Innovation: A Balanced Approach
To successfully integrate AI into your innovation process, it’s important to narrow your focus. Identify the areas where AI can deliver the most value—whether in trend analysis, ideation, or simulated consumer testing. From there, begin experimenting with AI in those areas to build trust and familiarity.
For those hesitant to fully embrace AI, running parallel testing alongside human-led research can be a great starting point. This approach allows teams to compare AI-generated insights with traditional methods, building confidence in AI’s capabilities while reducing risk. Alternatively, AI can be applied to lower-profile projects first, allowing teams to rehearse its application and refine their approach as they gain experience.
The key is to strike a balance—lean into focused, mindful use of AI to reap its benefits and stay competitive without feeling the need to chase every new use case. AI should be applied where it truly adds value and enhances the innovation process.
SIVO: Your Partner in AI-Enhanced Innovation
At SIVO, we’re actively experimenting with AI tools and exploring AI’s potential to transform how market research supports your new product innovation needs. We see AI as a powerful tool to accelerate processes and enhance creativity, and advocate for a stepwise, cautious approach. We’re eager to guide clients through proof-of-concept tests, blending AI’s scientific power with the art of human-driven insight application, which remains at the core of our work.
If you’re ready to experiment with AI and enhance your innovation process, contact us at Contact@SIVOInsights.com or visit SIVOInsights.com today to schedule a discovery call.
Let’s navigate the future together!
In your brand's early development stages, you likely gave much thought to the idea of a buyer persona.
You researched who you expected to purchase your products, how they would interact with your brand, and which factors would influence them to choose your brand over a competitor's. You painted a picture of what their needs are, what they do, and how their key motivators would align with your offerings.
Now, it's time to see that journey in action.
The path to purchase describes the journey that your target buyers take from the moment they first discover your product or service until they ultimately decide to buy it. The better you understand this journey, the easier it is to connect with them at key milestones and decision points to convert them from awareness to consideration to purchase, and then to repeat purchases.
Today, we're sharing how to conduct this research effectively and what to do with the results you uncover.
Put simply, the path to purchase encompasses all of the steps that your users take as they convert from a prospect into a paying customer. This can include multiple different channels, touchpoints, and platforms.
While each person's brand experience will be nuanced and unique, most leads take a few central steps as they travel along this journey. These include:
Also known as a customer journey or buyer journey, the path to purchase can be a valuable part of your audience analysis. It allows you to climb inside the mind of your prospective buyers, and current buyers and understand why and how they're engaging with your brand.
Let's break these stages down a little, explaining the important aspects to research and analyze.
The first step in the path to purchase is awareness. This is the moment that your prospective customers first learn about your brand, and it sets the tone and the stage for the rest of your interactions together.
Years ago, mass marketing campaigns were more effective than they were today. Modern buyers want customization and personalization at every turn, and 80% are more likely to purchase from a brand that offers tailored experiences. This means that gone are the days when you could send out one e-mail blast or a generic postcard to your leads and expect them to convert.
Now, the most effective ways to reach your target audience include:
Not only should these outreach measures be personalized, but they should also include a call-to-action (CTA) that encourages users to take that next step. Do you want them to check out your website, sign up for your e-newsletter, contact you to set up a consultation? Remember to make the CTA clear, actionable, and easy to follow.
Once you've initiated the path to purchase, you can track your marketing efforts, e.g., engagement and response rate, to understand how effective your chosen tactics were. For instance, with inbound marketing campaigns, most website analytics platforms, such as Google Analytics, or CRM systems, such as, HubSpot, allow you to easily monitor the traffic going to your website, the number of views each blog gets, or the success rate of your paid online ads.
Regularly review these numbers to understand which channels are the most successful. Then, fine-tune the most profitable ones and look for ways to eliminate or phase out the ones that aren't as fruitful.
For larger brands with national distribution, you can also conduct advertising and brand awareness tracking research to understand the percentage of consumers who are aware of your advertising and brand, pre vs. post the execution of your marketing campaign or in regular intervals such as, one or two times per year.
Key questions to ask at this stage include:
Piquing the interest of your target buyer is only the first part of the path to purchase. Next, the prospect will consider all of the features that your company or product offers, comparing them against others in your same space. They're looking for differentiators that set your brand apart, such as price point, quality, speed of delivery, product features, and more.
To perform this competitive analysis, they may perform the following steps:
At the core of this step is the buyer's need for information and insights. If you can provide this intelligence about your solution better than anyone else can, then you're more likely to move them from this phase of the buyer journey to the next.
In this step, you'll need to research and manage your online presence and reputation. Do you know what your target buyers will see when they search for your brand name online?
There are reputation management tools that can help you uncover and respond to your company reviews. In addition to the reviews on your website or Google Business Profile, remember to also check common and industry-specific third-party review sites.
Another area to research is how well you've explained and demonstrated your product or service. If a prospective customer wanted to learn more about how your solution works, are there online descriptions, manuals, sheets, videos, or in-store signage that make this step simple? The more transparent you can be, the easier it is to compare your solution against another.
Key questions to ask at this stage include:
After a lead discovers and researches your brand, they may decide to take that next step and make a purchase. To help them get there, you'll need to provide information that reveals why your company or offering is the best fit for their needs.
Depending on the solution you offer, this could require the buyer to make a significant investment. They'll want to review all of their options and compare top features to make sure they're making a wise decision.
This final stage of the path to purchase is all about sealing the deal. Research your company's current methods for engaging prospects and moving them along the sales funnel.
Some companies with “Business to Business” (B2B) offerings might use this time to perform presentations, pitches, and demos to share how their products work. Others with “Business to Consumer” (B2C) offerings might use advertising, on-package claims, third-party endorsements and in-store signage to demonstrate their benefits to prospective buyers. . The nature of your business and the type of audience you serve will dictate the exact strategy you deploy.
Key questions to ask at this stage include:
At each stage of the consumer path to purchase, you'll have the opportunity to gather insights into buyer behaviors. As you do, it's important to know what metrics to track, when to dive in, and who to involve. Here are a few tips to help you make the most of the data you obtain.
As brands seek to improve their buyers’ path to purchase experience, most are focused primarily on hard numbers, aka quantitative data, about the purchase, including volume, amount and frequency of sales, who and where purchased, percent of repeat purchases, etc. While this type of behavioral data is extremely important -, but don't underestimate the value of qualitative insights about the buying journey.
The ultimate goal of each phase is to understand the mindset of your buyers, and you can't get there with quantitative measurements alone. You need to understand the emotions that your prospective buyers are feeling, as well as what's behind their concerns, hesitancies, and excitement.
A few of the ways you can capture qualitative feedback include:
Not only are these insights helpful in directing your current and future campaigns, but they can also motivate your internal stakeholders. If you can share direct quotes and client feedback with your C-suite and marketing teams, it's easier for them to understand the human side of their work, in addition to the technical and economical side.
For some B2C companies, there is a primary shopper involved in each brand interaction. However, most B2B transactions involve other, behind-the-scenes decision-makers and influencers.
As such, resist the temptation to consider the path to purchase as strictly linear and one-dimensional in nature. In reality, it's more multi-faceted and complex.
Try to learn about the key stakeholders involved in buying decisions, as well as their specific roles. It also helps to understand how they interact with one another, as well as when each one enters and leaves the buyer journey. While some will be involved from start to finish, others may join and leave at different times.
To get the fullest view of your path to purchase, don't start your research at the first time the buyer and seller interact. Instead, go back even further to the pre-shopping stage. Increasingly, this means analyzing how buyers live, work, and how they find and compare offerings to meet their needs.
Today, most buyers are hopping online to discover new brands. In fact, in the B2B sphere, the average customer performs 12 different searches before deciding to engage with a specific brand. While it can be difficult to pinpoint exactly when a buyer first discovers your brand, spend time exploring different purchasing triggers to understand how to optimize these interactions.
As you research and learn more about your customerpath to purchase, you can customize and fine-tune your offerings and marketing communications to appeal precisely to those who are interested in them the most.
At SIVO, we're dedicated to helping our clients understand their buyers' needs, beliefs, and behaviors. We can help you gain visibility and address challenges by asking the right questions directly to your target audiences. Then, we'll work with you to turn those insights into actionable steps that can drive conversions, improve engagement, and build brand reputation. Contact us at Contact@SIVOInsights.com or go to SIVOInsights.com today to schedule a discovery call and connect!
By Ashton Walz
Are you new to Market Research? Or do you know someone who is new to market research? Many of us came out of business school with no more than one market research class under our belts so that means we had to learn the art and science of market research while on the job. But learning our craft while doing the job can be tricky because you're often "trying to safely fly the airplane while building it." With this in mind, the SIVO team thought it would be great to share the basics of quantitative online survey design with the next generation of market researchers out there. To our experienced clients and friends, please feel free to pass these nuggets on to someone new to our industry!
The Art of the Market Research Survey
An online survey for quantitative market research can be the key to gaining critical insight into your market, consumer, brand, product, or competition. Collecting this valuable data will lead to a better understanding of the market you operate in and your consumers’ preferences, opinions, behaviors, and needs. Leveraging the data and insights gathered from surveys, business teams can make informed decisions, shape their strategies, and refine their products or services.
But collecting this data can be tricky. If the survey is not designed well, organizations can be misled by inaccurate data. Market researchers have a phrase for this…“Garbage in, garbage out.” No one wants to make bad decisions from bad information so here are 10 tips for writing a great market research survey.
10 Tips for Great Online Surveys
Survey development requires both rigor and creativity. It takes experience and practice to get it right but there are some basic rules that will help you garner more accurate results:
1. Define Your Objectives
Clearly establish the purpose and objectives of your survey. Identify the specific information you want to gather and the decisions or actions that will be influenced by the survey results. This should be done first to give your survey questions purpose and direction. A best practice is to categorize your survey questions under each business objective so that when the data is collected, you know that you’ll have the answers you need.
2. Include an Introduction and Instructions
Provide a clear introduction at the beginning of the survey, explaining the purpose, importance, and estimated time for completion. Include instructions for navigating the survey and answering the questions.
3. Ensure Anonymity and Confidentiality
Assure respondents that their answers will remain confidential and anonymous. Avoid collecting personally identifiable information unless necessary for specific research purposes. Be transparent about how you will handle, store and share out the data. This allows the respondent to be comfortable and candid in their responses, which improves accuracy and depth of insight.
4. Avoid Leading or Biased Questions
Frame questions in a neutral manner to avoid biasing the respondents' answers. Use balanced language and avoid leading statements that could influence the respondents' opinions. A survey created with biased questions will ultimately be thrown out as the respondent’s answers are not representative of how they actually feel. An example of a leading question is, “Which product features do you find most useful?” This question assumes that consumers find the product useful when they might not find it useful at all.
5. Provide Response Options
Offer a variety of response options that cover the range of possible answers. Include options like "don't know" or "prefer not to answer" to account for respondents who may not have a specific answer or may be uncomfortable sharing certain information. In doing so, it becomes a lot easier to avoid bad data and get an accurate look at your consumer target’s preferences.
6. Use Logical Flow and Organization
Organize your survey in a logical and coherent order. Start with easy, less intimidating questions to engage respondents and progressively move towards more specific or sensitive topics. By using this ‘funnel’ technique it helps prime the respondent to think more critically when the in-depth questions come up. This organization can also help the researcher to weed out any respondents that would not provide accurate or helpful information for the study. (e.g., if someone doesn’t buy carbonated water, don’t ask them what their favorite flavor is.)
7. Avoid Double-barreled questions
To ensure that your data is clear and insightful, be sure to avoid asking about two topics in a single question as it creates ambiguity in the data and leaves the analyst wondering how to interpret it. For instance, the question, “Please rate how well you like the lighting and atmosphere of this store?” leaves the analyst wondering if the respondent considered the lighting, the atmosphere or both when providing a rating.
8. Make it Interesting
A well-designed market research survey aims to uncover crucial information while simultaneously engaging with the target audience, to cultivate a sense of involvement. A mix of closed and open-ended question types can create a more interactive and enjoyable survey. Not only does it provide for an immersive experience but generally leaves the respondent feeling like they are being heard as they can freely express themselves through various types of questions.
9. Keep Survey Length under 15 minutes
In the same vein as making the survey interesting, survey length should be no longer than 15 minutes and ideally, 12 minutes or less. When respondents get fatigued, it can negatively impact their attention and diligence which impacts data accuracy. Long lengths also lead to incomplete surveys as respondents drop off.
10. Test Your Survey
Before launching the survey, conduct a pilot test with a small group of respondents to identify any confusing or problematic questions. Adjust based on their feedback to ensure clarity and relevance. This can prove to be extremely useful as there could be some things the survey designer didn’t catch that a respondent will.
Your Source for Expert Consumer Insights
At SIVO, Inc., we dedicate ourselves to creating engaging and accurate quantitative market research surveys that help you better understand your market and consumers. We are experts in developing the appropriate questions and applying the right analytic techniques to deliver insights that meet your business objectives.
Contact us via our website form or email us at Contact@SIVOInsights.com today to schedule a discovery call!
Here at SIVO, one of our targeted solutions to your business challenges is ethnographic research. But what exactly is ethnography research? And why do you need it? Let’s take a closer look.
Ethnography is a flexible, qualitative research method that can be adapted to fit different audiences, markets, learning objectives, and environments.
Ethnographers immerse themselves in the natural environment of their research participants (home/office), and then observe their behavior. They also conduct an intimate one-on-one interview (usually lasting around 2 hours in length) with the respondent, where they learn about the life, values, beliefs, and attitudes of the consumer. When you need to develop a deep understanding of your audience by hearing their stories and truly learning about their lives, an ethnography consultancy may be the right fit for your consumer research and insights needs.
Related Trending Ethnography Research:
Do customers want to ‘hire’ your product?
Because ethnography research is conducted in the comfort of the consumer’s home or workspace, valuable insight is shared in a more truthful and open manner as compared to focus group research settings.
This up close and personal observation is critical because ethnographers can both witness and understand what consumers actually do on a daily basis, versus what they say they do.
There is also an opportunity to interact with the family and friends of the participant, to gain a more complete picture of his/her life. Engagement on such a personal level creates the foundation for intimate and empathetic consumer learning, which could prove valuable to a brand for years to come.
In addition, videographers can capture the ethnographic interviews and key moments with research participants, such as pantry tours, product interactions, and family meals. This video footage can then be translated into a powerful highlight reel to share with your marketing, design, or sales teams; to build empathy and gain a better understanding of your consumers.
Ethnography research is the perfect research tool to help you understand your audience, their mindset, their daily experiences, and their relationship with your product/service.
If you want to know how to frame your brand message in order to connect effectively with consumers, an ethnography consultancy will help provide the insights you need to craft a clear message.
You can also recognize ways to improve your product/service, while spotting potential product innovation opportunities. Additionally, ethnography can help you answer questions about your competitor and their core audience, as well as reveal opportunities for differentiating your brand.
Ethnography provides a unique, crucial perspective on how your brand fits into the actual lives of your consumers. So, if you’re ready to tackle your business challenges and discover powerful insights that will help move your business forward, ethnography might just be the missing research tool you’ve been looking for.
We specialize in providing businesses with valuable insights through ethnographic research. Our team of experienced researchers has the skills and knowledge needed to conduct in-depth studies of your customers' behavior and preferences.
We use a variety of ethnographic research methods and our researchers are skilled at interpreting the data gathered through these methods and can provide you with actionable insights that you can use to improve your business.
We work closely with our clients to ensure that our research is tailored to their specific needs. Whether you are looking to develop a new product or service, improve your marketing strategies, or gain a deeper understanding of your customers, we can help.
Contact SIVO today to learn about our ethnographic research services and discover what ethnography can do for you.
SIVO Insights brings together research, talent, and intelligent technology to help organizations navigate complexity with confidence. Have a business challenge? Let's talk!
We bring together research, talent, and intelligent technology to help organizations navigate complexity with confidence
