Successful Consumer Segmentation

Justin Edge, SVP at Knowledge Networks, on what best-in-class consumer segmentation looks like.

NGP. Why should pharmaceutical marketers continue to focus on consumers or patients in this time of increased regulatory vigilance?
JE. Best practice has shown that a pharmaceutical brand can’t be relevant without a focus on the end-beneficiaries. This is not a license to diminish the influence of professionals like doctors and pharmacists. Instead, branded pharma therapies have to better manage their interaction with multiple constituencies, patients/consumers being among the most important. The sweet spot for pharma brands nowadays is the alignment of patient benefits with those of professionals. The most effective stewards of pharma brands understand that patients are not an optional extra when it comes to developing and strengthening their brands.

NGP. Given the increased scrutiny of DTC communications, do you see a rollback of consumer branding efforts?
JE. No, but the management of brands is maturing. The emphasis is no longer on indiscriminate awareness building and driving traffic into physicians’ offices. We are now seeing a level of sophistication that was often lacking in blockbuster pharma brands. Patient-directed efforts like compliance programs and physician locator systems are now an integral part of the marketing mix, instead of after-thoughts bolted on during the later stages of a product’s life cycle.

NGP. What does a best-in-class consumer segmentation look like?
JE. A well-honed segmentation can combine visible elements, including demographics, behavior and other criteria used to reach targets, with intangible elements such as needs, attitudes and concerns. Advanced analytical tools currently permit the fusion of different inputs to create genuinely 360-degree portraits of market segments. A sound segmentation should also answer questions such as:

• What are my attractive target segments?
• How large and deep is the opportunity within each segment? And across segments?
• How can the brand exploit the opportunity while managing competitive threats?
• What story can we build for our brand that will attract target segments?
• What communication vehicles and media can we use to have a conversation with these segments?
• Are there synergies across segments that will unlock marketing efficiencies?
• What DTP strategies would work well with target segments versus those that would turn them off?

NGP. What about the science?
JE. Sound analytical tools play an important role. The first of these is the actual data. Surveys can be informative only if the sample source is unimpeachable. Much research today is conducted online but many online panels do not have the statistical rigor to ensure accuracy. The old mantra of ‘garbage in, garbage out’ has never been more relevant.

Many of these online panels are made up of volunteers who are nothing more than representatives of those who chose to take part, and certainly can not be characterized as representative of some larger population. In fact, weighting these volunteer data can not make up for the inherent biases. At Knowledge Networks (KN), we have a preference for very precise data sources such as our KnowledgePanel, the only nationally representative online panel in the US. It is why KnowledgePanel is used to accurately size consumer segments.

Cutting edge analytical tools in the hands of the right practitioners can also enhance the segmentation solution. KN’s expertise in Latent Class Segmentation is one such tool/knowledge combo that helps us build richer, more textured segmentations.

NGP. What are the biggest mistakes made when conducting consumer segmentation?
JE. The key ingredient to a successful segmentation is focus at the planning stages with an eye on the issues to be addressed. The first step should be to get all of the stakeholders who will use a segmentation to sit at a table and share their needs and concerns. This may take extra time but it also increases the actionability of the investment. I can predict a disconnect when this step is bypassed in favor of just ‘getting the survey into field’.

Another mistake is to handle the process as an order-delivery model. Arriving at the optimal segmentation is iterative and requires plenty of back and forth. Action planning workshops are great ways to flesh out the data so that you avoid ‘slide fatigue’. Workshops also provide a forum to enhance segment insights by incorporating a brand team’s own thinking, rather than serving up the research in a ‘take-it-or-leave-it’ style. This bridges the gap from insights to action.

One area that is under-explored is gauging the use of non-traditional media for reaching consumer segments. CPG and technology firms have led the way with the adoption of non-traditional marketing but these avenues are rarely investigated in pharma segmentation studies that tend to play it safe with the measurement of TV, radio and print media habits. I encourage clients to think about online and mobile tools to reach segments when that segment has those media consumption characteristics .

Justin Edge is SVP at Knowledge Networks and leads the company’s healthcare and pharmaceutical practice.