Market segmentation is primarily a marketing tool and its purpose is to identify different groups of customers or potential customers.
Personas also represent groups of real customers but their use is quite different. So, when should you use market segmentation and when should you use personas?
Segmentation as a marketing tool
The purpose of market segmentation is to identify different groups of customers (or potential customers) within a market so that it is possible to target particular products, services or marketing messages. Once identified, these groups are referred to as segments.
Developing market segments involves large-scale quantitative research. Emphasis is placed upon understanding large numbers of people at a relatively high-level, and grouping them together based-upon shared characteristics such as demographics, behavioural patterns or attitudinal ratings.
Each segment represents a group of people and is normally given a name to describe the group it represents. For example, on a segmentation study about savings, the segment groups might be ‘Saving for later life’, ‘Live for today’ etc.
You would receive statistical data and percentages from a segmentation study:
The number of segments identical ed and what percentage of the overall target market they represent.
A summary of each segment and their characteristics; again this would be in data and percentage format, with some supporting verbatim comments collected during the survey.
Segmentation is a powerful research output, but it does not delve into personal stories, goals or motivations. It does not provide rich insight into user experiences, journeys and pain-points along the way. Unlike personas, it is not a design tool.
Personas as a design tool
Personas also represent groups of real users or customers, but their use is quite different. Personas are fictional characters (but based upon robust research with real people) designed to represent a group of people with similar values around the use of a product or service. Their purpose is to encourage design for real people with real needs, not just generic and faceless users. End-users cannot be available to design teams 24/7, however detailed character stories in the form of personas ensure that a realistic view of end users is kept in mind at all times.
Where segmentation seeks to identify and measure the size of different groups at a high-level, personas are devised to provide a rich understanding of the user context, needs, motivations, behaviour and the associated design challenges/opportunities.
Personas are typically informed by research techniques such as in-context one-to-one interviews, with anywhere from 12 to 30 interviews depending upon complexity. These interviews are designed to elicit detailed feedback about user behaviours, attitudes and environments, rather than higher level ratings from a very large group (as with segmentation). Once created, personas may be validated by recruiting and interviewing three to six individuals for each persona.
Personas are typically communicated in the form of a pen portrait character and story. Like segments, they should be given a meaningful name, but the name will focus around that character as a person e.g. Laura the Organiser. The story will be written to provide design teams with a window onto the character’s world; What are her experiences and characteristics? What does she need? What challenges does she face? What does her environment look like? What are her frustrations?
These details ensure a design team fully understands the types of users and context that they are designing for; segmentation simply does not provide this level of detail because it is not designed to be used for this purpose.