Strategize: Product Strategy and Product Roadmap Practices for the Digital Age

by Roman Pichler

Choosing the Right Segmentation Approach But how can you tell which segmentation approach is preferable? Should you segment primarily by customer or by benefit? My answer is simple: look at the innovation type your product represents. Whenever you create an adjacent or disruptive product, segment first by benefit. Once you have created your initial benefit-based segments, you can refine them by using appropriate customer properties. In contrast, when your product is a core innovation, divide the market by customer properties, as Figure 17 illustrates. FIGURE 17: Innovation Strategy and Segmentation Approach21 The great thing about benefit-based segmentation is that it reduces the risk of overlooking people who are likely to take advantage of your product; it also offers you the opportunity to reconstruct the market boundaries.