Segmentation by progress

Dr. Adam Tacy PhD, MBA avatar
The idea

We can, and should, segmentation our market by progress sought and/or progress origin.

It is more powerful than our typical segmentation approaches that use product features or market demographics (age, sex, postcode etc).

Four approaches are found: mainstream, segments, customisable segments, and full customisable. The choice a helper takes has impacts on the progress offered, progress hurdles, seeker’s judgements of progress potential, and proposition viability.

EDITING BELOW HERE

Segmenting
progress sought
Progress origin
Key recommendations

content dump

Market segmentation is typically performed through product features or market demographics (age, sex, postcode etc).

Here’s a sobering comment from Christensen (author of The Innovator’s Dilemma – which gave us disruptive innovation – and Jobs to be Done theory):

The great Harvard marketing professor Theodore Levitt used to tell his students, “People don’t want to buy a quarter-inch drill. They want a quarter-inch hole!” Every marketer we know agrees with Levitt’s insight. Yet these same people segment their markets by type of drill and by price point…

…the prevailing methods of segmentation that budding managers learn in business schools and then practice in the marketing departments of good companies are actually a key reason that new product innovation has become a gamble in which the odds of winning are horrifyingly low.

Christensen, C. M., Cook, S., Hall, T. (2005) “Marketing Malpractice” Harvard Business Review 

segmentation – grouping seekers with close enough progress (origin and/or sought) that an offering can effectively reduce the lack of resource progress hurdle and offer meaningful progress potential.

approaches:

  • segment
  • mainstream
  • customisation

Each approach can be seen as a form of segmentation – grouping seekers with close enough progress origins that an offering can effectively reduce the lack of resource progress hurdle and offer meaningful progress potential. Though this also needs to take into account any segmentation of progress sought.

Both the mainstream and customisation approaches are essentially ends of the segmentation spectrum. Mainstream focuses on a single group where you expect to find most seekers and are prepared for the outliers to not engage. While the customisation approach treats every seeker as a unique segment.

segmentation approach – identifying sweet spots

As mentioned, segmentation is a way of finding groups of seekers with sufficiently similar progress origins. Then creating propositions for each group.

Seekers benefit as they can relate to a specific segment offering and find minimal lack of resource and maximal progress potential. Helpers benefit since their collection of offerings appeal to a wider range of seekers.

Picking up our learning a language example again, this is partially why we find beginner, intermediate and advanced class options (other reasons are to do with “measuring” progress reached, for example). Each class (segment) assumes a different progress originwhich a seeker

mainstream approach – simplifying propositions for broad appeal

However, helpers live in a world of practical constraints which guide them in how broad the segments they decide to address are.

Some helpers may decide to address only one segment of progress origin, and have it as broad as they can. They are addressing the mainstream. Often this is the empty (no prior progress) state.

customisation approach – flexible propositions for unique progress origins

At the other end of the segmentation spectrum is customisation. Here a helper will tailor their proposition to meet the unique progress origins of seekers. By collaborating closely with individuals, these helpers ensure that their offerings minimise resource gaps and maximise progress potential. It’s a strategy often combined with customising progress offered.

Examples include individual tutoring, taxi service, personal trainers, etc.

However, such customisation demands a higher level of equitable service exchange due to the extra effort involved and limited economies of scale. This becomes reflected in a higher equitable service exchange progress hurdle.

Equitable service exchange progress hurdle »

Seekers appreciate this approach, but appreciate less the increased effort it entails for them in the necessary (often indirect) service exchange.

Segmenting progress seekers

It also leads us to an improved view of market segmentation. No longer are we segmenting based on product features or demographics of seekers. Now we segment on combinations of functional, non-functional and contextual progress sought. And likely, in this example, we’ll find seekers whose non-functional progress is to enjoy the scenery instead of being direct. Leading us to a different set of propositions.

Christensen’s work on jobs to be done theory is well worth reading. The main example there is about milkshakes in a fast food restaurant. And how they are “hired” for different tasks in the morning commuter rush compared to the late afternoon spend some time with a child task. That, and Urwin’s similar jobs to be done approach, both map to our concept of progress.

The primary operant resources that seekers possess are their skills, knowledge, and time. However, there is a broader range of operant resources, as highlighted by Alves, Ferriera and Fernandes (2016):

  • “physical – include sensory-motor endowment, energy, emotions and strength.
  • social – made up of both personal and cultural relationships
  • cultural – include specialised knowledge and skills, life expectancy and historic imagination”

These, or lack of, can feed into contextual progress and subsequently influence any progress proposition. . For example not having sufficient strength to move something; or not having specialised knowledge on how to drive. These can also feed into market segmentation of haves and have-nots (or grades of). Which meets the aim proposed in Arnaud, Price and Malshe (2006)’s “Toward a cultural resource-based theory of the customer”, and aligns with our thought of using progress for better segmentation.

practical applications – creating propositions for different segments

To solidify the above, let’s consider the example of learning Mandarin Chinese.

A private tutor can offer a customised proposition by assessing a learner’s current skills and knowledge (progress origin) and designing a tailored learning plan. Often also taking account of the seeker’s progress sought in that tailoring.

Alternatively, a standardised Chinese course approach assumes an empty progress origin state for all seekers, which may suit some but frustrate others. And here we can recognise a familiar simple segmentation approach usually employed of offering beginner, intermediate, expert classes. Each level assuming a different origin based on previous knowledge, leading to different propositions.

BeginnerIntermediatePrevious attempt
seekers who have no prior knowledge of the language. They require a comprehensive approach that focuses on foundational language skills.Seekers in this segment have some familiarity with the language, such as recognising a few words or phrases. They may benefit from targeted language instruction to build upon their existing knowledge.This segment includes seekers who have made previous attempts to learn the language but were not successful. They may require a different instructional approach that addresses the challenges they faced before and helps them overcome those obstacles.


Now a seeker can chose which segment they are in. A beginner that choses to start an intermediate proposition will likely suffer lack of resource (knowledge and skills). And an intermediate starting with a beginner proposition is likely ti get frustrated with progress.

But notice we’ve included a segment “previous attempt”. Seekers who have tried before but for some reason given up. Are there propositions that can be designed for them to address why they gave up? Probably, we’d have to understand why first.

And there are additional ways to segment. For instance the familiarity of language structure. Chinese is a tonal language (the same “sound” means different things depending on whether it rises, falls, stays the same etc. A seeker whose native language is tonal is likely to have a different starting point a seeker with, say, English as their mother tongue.

FamiliarNot familiar
Seekers who are familiar with similar language structures, such as tonal languages in this Mandarin example, can be grouped in this segment. They may benefit from leveraging their existing knowledge to accelerate their learning process.Seekers in this segment are unfamiliar with sentence structures of the language to be learnt. They will require extra help in this area.

We can include motivation, which typically is part of progress sought to further improve segmenting. For instance, learning motivations can point to segments like travellers seeking basic conversational skills, professionals aiming for advanced language proficiency for career purposes, or language enthusiasts interested in in-depth understanding and cultural immersion.

Now we can start thinking of propositions for various segments groupings.

  • Beginner-Non-familiar-Committed – never learnt another language before, speaks only English, is moving to China in 6 months, can put 6-8 hours a week into learning
  • Beginner-familiar – knows a few words, speaks Thai already, 
  • Hobbiest – has learnt a few languages before but not to a great depth, might take a holiday to China in the next year or so, so wants to feel comfortable, a hour a week feels about right

And further insights can be gained from contextual aspects of progress sought, such as “unable to attend physical meetings”, “likes face-face” etc. Starts to feel a bit like personas from design thinking, right?

These segments lead us to different offerings, attracting and retaining different seekers…leading to growth for the helper.

Related articles

Discussion

Let’s progress together through discussion…