By Steve Acuna, Director, Segment Marketing, Harte Hanks, and Karl Hellman, President of Resultrek
Thousands of years ago, Chinese sages created a metaphor for looking at the paradoxes of the world around them. They observed Yin and Yang opposites everywhere they turned: Shadow cannot exist without light; Creative innovation cannot succeed without disciplined order; Sun Tzu’s Art of War is full of passivity being the most effective, vigorous, active strategy.
The image these philosophers developed was Yin and Yang, two opposite principles which were simultaneously one phenomenon. Yang was the focused, the energetic. Yin was more fluid and softly expansive. Over time Yin and Yang would create a balance. But at any given moment, Yin and Yang might look inconsistent.
The Yin and Yang of Market Segmentation
As applied by strategic marketers, segmentation is characterized by Yin and Yang thought processes that, used together, create strategic marketing.
The expansive Yin of segmentation envisions new segments, new ways to look at customers who have the same unmet need. In the yin of segmentation, strategic marketers create expansive ideas of who might, under a wide variety of circumstances, need and want a product or service to meet a yet unrecognized need.
The disciplined Yang of segmentation takes the creative Yin ideas and defines, organizes, and classifies specific customer groups, harnessing them into a focused strategy directed at a clearly defined, discreet group of potential customers.
Creative Yin alone never gets the job done. Disciplined Yang alone focusses the business into narrower and narrower targets. How often do we hear a strategic marketer chose one and ignore the other? “I’m creative, but not good at execution.” Or, “Just tell me what to do and I will make it happen.” Both are formulae for failure. But pursued simultaneously, Yin and Yang, expansiveness and focus, sustain success. Great marketers’ thinking flows back and forth from soft-edged, expansive strategic possibility ideation (Yin) to hard-edged, delimiting segmentation analysis (Yang).
Enhancing intent-to-buy research with Yin and Yang thinking
The Yin and Yang of segmentation can enhance traditional Intent-to-Buy research, as it is used for concept tests and for defining market segments. Here’s how:
Intent-to-Buy research begins with the strategic marketer writing a three or four sentence statement describing the features and benefits of a product. This statement is presented to a potential customer with the question, “How likely is it that you would buy this product if it cost $X?” The respondent chooses one answer ranging from “Definitely would purchase” through “Might or might not purchase” to “Definitely would not purchase.”
The Yang, or market sizing use of Intent-to-Buy research, takes all the definitelys and half the probablys and uses the sum as a rule of thumb estimate of demand.
But there’s a more expansive, more strategic, Yin use, of the Intent-to-Purchase question, namely going on to ask, “Why did you answer as you did?”
Understanding why people say they might buy, can uncover unanticipated reasons for purchasing that can segment and expand the market. Understanding why people say they will not buy, gives the company specific direction about new problems to solve and new segments to serve.
Yin thinking expands the market.
Yang thinking guides execution, e.g., sales force targeting, message definition, and financial projections.
Yin and Yang thinking in the sales process
Another example of the power of combining Yin and Yang analysis is when JBT FoodTech sends teams of their most creative and expert process engineers into a plant of their food processing customer for a free, four-day, diagnostic visit. On the first two days, they survey the plant using a Yin mindset. The third day is spent converting their creative process improvement ideas into to quantified, financially justified proposals (Yang thinking). On the fourth, they meet with the plant manager and the senior plant team to discuss their findings and proposals.
Their experts know what problems the technologies have solved in the past, as well as what new problems the technologies might solve in the future. These visits combine the technical and financial—Yang—qualities with the creative, problem solving—Yin—qualities.
Yin and Yang complement each other
Market segmentation analysis is most powerful when it uses the numbers (Yang) to corroborate the creative insights (Yin) of expansive explorations.
The resulting segment definitions enable the company to execute target marketing strategies more effectively and efficiently than competitors laboring under traditional market definitions. All too often, marketers fall back on firmographics—company size, industry, and geography—in defining target groups. This is particularly tempting in business-to-business marketing, where the sales force demands unmistakable, easy targeting criteria.
But a company that breaks up the market using only easy markers, like size or industry, is missing valuable marketing opportunities. Within each industry and size group, companies differ substantially on:
- how the customer uses the product
- what ways they prefer to buy
- whether buying is done by committee or by individuals, by RFP or closed bid
- the company’s risk profile—are they innovators or do they wait to adopt new ideas?
- the problems they use the product to solve
These differences define segments that you can target and serve more accurately, and therefore better than your competitors. (For a method of finding new segments to target, read about Outcome Based Segmentation.)
The Yin of segmentation calls for divergent thinking. The Yang of segmentation requires convergent thinking. They are opposites. But as in Chinese philosophy, they are also complementary and give rise to each other as they interrelate.
Their duality forms the oneness of effective strategic marketing.
About the Author
Steve Acuna, Director of Segment Marketing, specializes in go-to-market strategy and has been instrumental in developing Harte Hanks’ Game Board approach to market segmentation. He and his team are responsible for determining Harte Hanks target segments and developing and executing on strategic plans to reach these segments. Prior to Harte Hanks, Steve has been integral to developing market strategy at CenturyLink and Cypress Communications.More Content by Steve Acuna