Putting Your Customers First: How Consumer Research Enhances Market Segmentation in Business Intelligence

Market segmentation is the division of customers into differing groups with similar characteristics. This simple step enables more effective marketing as the target group is made considerably smaller. The nature of segmentation ranges from identifying similar customer attributes through to complex factors and attitudes. All in all, segmenting markets permits a deeper understanding of customer behaviours, preferences and desires enabling healthcare and other businesses to make visible otherwise unseen trends and patterns among different groupings. This in turn leads to refined marketing techniques with a greater overall effectiveness that increases customer satisfaction, loyalty and retention. 

Role of Consumer Research in Market Segmentation

Consumer markets can be divided using a multitude of variables and categories. The main areas are age, income, gender, race, marital status, and location. In this way consumer research is vital in order to collect data about your customers and potential patient pool. 

There are numerous methods for conducting consumer research. The main ones to employ include surveys among patients, focus groups, questionnaires and polls. This is arguably the simplest way of conducting consumer research as, if done correctly, gives accurate and precise information about your customer’s preferences and areas for improvement. 

Another method is the use of data analytics. Data analytics is the application of statistical, mathematical, and computational techniques to analyse data and deliver numerous kinds of insights. One of the advantages of using data analytics to segment customers is that it can assist in helping you discover unknown patterns such as patient pain points, needs and feedback. This information is also scalable and flexible which means you are able to handle large and complex data sets and that you are also able to adapt to changing requirements. 

Enhancing Market Segmentation with Consumer Insights

The more refined your data is the better market segmentation will be. If you’re looking to refine your market segmentation you should approach this by measuring specific criteria based on data and evidence, not assumption or intuition. You should also compare and evaluate the different segments objectively. Examples of criteria that can be used by businesses include size, growth, loyalty, needs, responsiveness and profitability. 

Another step in adapting your market segmentation is to periodically test and validate different segments with real customers. Conducting experiments is one method, but easier is to launch pilot programmes, use prototypes, or advertise campaigns and launches to measure the effectiveness of each and discern how it correlates with what you already know (or don’t know) about different demographics. 

Furthermore adjusting and prioritizing different segments can increase the efficiency of your overall business. You can modify criteria or labels of segments and allocate resources accordingly. 

Finally you should continually review the strengths and weaknesses of your market information (not just segments) – this will enable you to identify opportunities and gaps in the market as well as weaknesses and potential competition. 

Case Study

An excellent example of market segmentation can be found in a research study on medical tourism in Lebanon. Consumer research has now made it considerably more easier for healthcare providers to predict demands when it comes to foreign patients travelling for medical treatment. In Lebanon for instance it was found that female medical tourists accounted for around 55% of all patients with most seeking cosmetic surgery while male tourists were spread across a variety of different procedures. Furthermore younger tourists were dominant aged between 25 and 44 and most repeat travellers selected Lebanon as the destination to continue their medical treatment. Spending patterns were concentrated on medical matters with just under a third spending only 10% of their budget on accommodation. The majority (31%) stayed in average hotels, with 29% in economy hotels and 26% in furnished apartments. 

The kind of data collected and segmentation possible means that businesses in different industries were able to compliment one another. The research study also revealed a vast amount of other information resulting in the visibility of two distinct segments of medical tourists visiting Lebanon with differing, specific characteristics and motivations. These top two categories were ultimately classified as “international patients” or “elective medical tourists”. 

Challenges and Considerations

When conducting consumer research it is important to be in line with the relevant laws revolving around privacy and consent. The specific act for the United Kingdom is the General Data Protection Regulation (GDPR). 

As demonstrated with the case study there is also need for collaborations between different companies as well as industries in order to maximise the usefulness of your consumer research. This can be potentially problematic, particularly if companies are associated with rivals and may require you to specifically allocate resources and train staff for obtaining and analysing cross-company research. 

Conclusion

Segmenting customers is essential in providing in-depth insights into consumer attitudes and behaviours. It permits businesses to create communication materials used in marketing that focus on singular points relevant to the recipient. Segmentation ultimately enhances the effectiveness of marketing campaigns leading to increased response rates and improved patient interactions. All in all, it puts the the customers where they ought to be – at the heart of business strategy.