How to use Persona in market segmentation

Your market segmentation is useless if it doesn't become a practical tool used by your organization. If it remains a document used by only a few people, it will have minimal impact on your profitability and growth.

The key to success is a clever way to communicate your market segments so that the whole organization, from product development to marketing and sales, streamline the product, your value propositions, and market messages to each market segment.

 

But, how do we get people to understand and remember the market segments?

How can I get my organization to understand and remember the segments ?

All business is H2H

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It would help if you used mnemonic devices— a fancy word for a great tool. A mnemonic device is a memory technique to help your brain better understand and remember information.

Forget the old worn-out phrases B2B (business-to-business) or B2C (business-to-consumer). No business does business with another business. Maybe in the future, when artificial intelligence has taken over, but until then, all critical decisions in business are taken by humans.

Business is always H2H (human-to-human). You and your colleagues make decisions and create products, value propositions, and marketing messages. Your customers are also real people, interpreting and encoding your proposals.  

 

Your organization needs to visualize and understand your customers. The real people taking decisions critical for success.

A powerful mnemonic device to use

We, as human beings, are used to families. Our mind has trained for years to memorize faces, characters, and personal traits of people.

 

Therefore, think of your segments as a big family of eight. It is a powerful mnemonic device.

 

Your market is the family of eight that is critical for your profitability, growth, and, ultimately, your organization's survival.

 

And let a  Persona represents each market segment (family member).

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Eight is the golden ratio. If you use fewer market segments, approaching four, will make the market segments heterogeneous and therefore less useful. The customers in the market segments are far too different from each other, muddling the picture. On the other hand, if you use too may, approaching twelve, will make them difficult for the organization to remember and manage, and are therefore also less useful.

 

The crux of the matter is to use subsegments if you need a more finely divided structure.

Use Personas to represent the market segment

The Personas are models of customers based on market research and the information about the segments to which they belong. The Personas tie the story together by summarizing and highlighting the unique characteristics of the customers in a market segment. Personas bridge the gap between market segmentation variables and product definitions.

 

Personas represent the archetype customer in the segment. Although personas are fictitious, they should be based on facts from extensive market research of actual customers in the market segment.

 

Personas allow the information to be shared clearly and sustainably throughout the organization. They act as 'stand-ins' for real customers in the development process and help guide decisions about functionality, design, marketing, pricing, and sales.

 

The description is visual and concise, and it creates focus in your organization. Prevent the organization from being distracted by rumours or preconceived ideas.

 

The end product of your Persona creation is a set of foundation documents acting as definitions and reminders of who your customers are.  

The Persona should figuratively speaking, define the midpoint of your segment. The variables defines the borders. By using these two concepts, Persona and Variables, your market segments are both clearly defined and easy for people to understand and remember.

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The Persona defines the midpoint

The variables the borders

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Example of how to use a Persona to vizualize a market segment

This is an example of the top document for the type of Persona I advocate. It is usually an A3 document, and it contains the following elements:​

  • A name that is easy for people to remember. It could be a rime or, as in this example, both words starting with the letter t – Touring Tom. In the beginning, people in your organization will talk about the market segment Touring Tim. But don't be surprised if you one day sit in on a meeting and someone asks who the customer is for the new product. People will simply answer Tom. And everybody in that room knows who Tom is and thee understand:

    • the type of customer who should use the product

    • who the critical decision-makers are

    • the market segments importance to the organization

    • what kind of products customers typically buy

    • the competitive situation in the market segment

    • the price level in the market segment

    • if the market segment mainly consists of mainly loyal ambassadors to your business or hard to convince customers presently buying from your worst competitor

    • etc.

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The Persona will act as a mnemonic device for people. Like a bag with a handle. A bag with all the information inside. A bag that is easy to carry around and not forget.

 

Other types of information typically included:

  • On or several pictures of the real customers in the segment using your product

  • Usually, the top three most important customer needs

  • One section with the variables defining the market segment

  • Key significant characteristics of the customers

  • Information about sales prices and the competition

  • A short narrative that brings the Persona to life.

This example of a Persona can be downloaded here and used as inspiration.

Become a market segmentation and Voice of the customer expert in an easy, fast, and enjoyable way.

 

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Available in paper or download as pdf-files directly.

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