Customer Segmentation Analysis: 3 Steps to Proper Positioning

This article is an excerpt from the Shortform book guide to "Obviously Awesome" by April Dunford. Shortform has the world's best summaries and analyses of books you should be reading.

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Who’s most likely to buy your product? How can you figure that out?

To help you position any product well, April Dunford provides a 12-step process. Step 7 is to pinpoint customer segments most likely to buy your product.

Read more to learn about Dunford’s three-step process of customer segmentation analysis.

Customer Segmentation Analysis

Once you have a good understanding of the value that your product delivers versus other alternatives, determine which customer segments care most about that value, advises Dunford. You’ll want to target these segments simply because they’ll be the easiest to sell to.

(Shortform note: This step, pinpointing the customer segments most likely to buy your product, may seem similar to Step 1, identifying your most eager customers. We might consider that Step 1 is a general and high-level reflection on what certain people like about your product that kicks off your positioning effort. Step 7, then, is a detailed inquiry into precisely who these groups are.)

Customer segmentation analysis involves these steps, writes Dunford:

1. Think about what makes some groups more excited about your product than others. For instance, people most interested in your vacuum cleaner might be employees who work from home and care particularly about having a clean living space. (Shortform note: This step might require you to find out what makes other groups unexcited about your product, which can be painful. Whenever you receive criticism of your product, determine if that criticism is justified (and not simply a malicious attack) and then try being grateful you received it—this gives you the opportunity to improve your product.)

2. Consider how to identify these groups. You might identify them based on the brands they buy, the media they consume, or the jobs they hold. For example, you might identify your target group of work-from-home employees by the type of job they have: skilled knowledge roles. (Shortform note: Marketers often take this identification step even farther by creating customer personas—fictional characters with certain buying behaviors. While doing this isn’t necessarily helpful in the context of positioning, it can later help your marketing team craft content and messaging that better appeals to a persona based on how they buy and the advertising they pay attention to.)

3. Make this group as specific and narrow as possible at this stage and then expand later if necessary. Remember that your positioning will evolve over time, so you can change your target group if needed later. For now, you might target only work-from-home executives at tech start-ups and then later expand to include work-from-home executives at any company. (Shortform note: In New Sales. Simplified., Mike Weinberg agrees that you must narrow your target segment as much as possible and provides a specific reason for doing so: It allows you to fully understand a particular segment—work-from-home executives in this case—so you can better market to them and establish yourself as credible in their eyes.)

Customer Segmentation Analysis: 3 Steps to Proper Positioning

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Like what you just read? Read the rest of the world's best book summary and analysis of April Dunford's "Obviously Awesome" at Shortform.

Here's what you'll find in our full Obviously Awesome summary:

  • What "positioning" is and why it's so important for marketing
  • Three common (and avoidable) mistakes marketers make
  • A 12-step process that lets you position any product well

Elizabeth Whitworth

Elizabeth has a lifelong love of books. She devours nonfiction, especially in the areas of history, theology, and philosophy. A switch to audiobooks has kindled her enjoyment of well-narrated fiction, particularly Victorian and early 20th-century works. She appreciates idea-driven books—and a classic murder mystery now and then. Elizabeth has a blog and is writing a book about the beginning and the end of suffering.

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