The Fallacy of Attribute Based Customer Segmentation

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I operate in and around the constant drone of attribute based customer segmentation. There is a prevailing thought that organizing your product or service design, as well as marketing, around demographics or behaviors is the best way to develop and maintain highly loyal and valuable customers. In many places, behaviors are not even analyzed, so we’re left with simple segmentation based on products used, geographic region, industry, or annual revenue. If you believe that this is working out for you, here are some statistics that might make you feel a bit uncomfortable.

I’ve been doing a lot of reading lately, and one of the handful of people I’ve gained a great deal of insight from is Clayton Christensen. In his book, The Innovator’s Solution, he begins by talking about the growth imperative. He highlights a The Corporate Strategy Board, who published a study called Stall Points in 1998 that looked at com…