Fascinating article in the March 2nd edition of The New York Times that featured an interview with John Fleming, Chief Merchandising Officer and Stephen Quinn, the new Chief Marketing Officer at Wal-Mart that detailed the retailer’s new strategy to segment its 200 million customers into three segments that would drive its strategy:

• Brand Aspirationals – People with low incomes who are obsessed with brand names

• Price-sensitive Affluents – Wealthier shoppers who love deals

• Value-price Shoppers – People who like low prices and can’t afford much more

If Wal-Mart has finally seen the segmentation light, recognizing that growth is driven by focus, what are you waiting for?

A proven approach to segmentation is SegmentBrandingTM , an approach we use to combine behavioral segmentation with attitudinal segmentation along with predictive modeling that helps clients develop actionable segments that allow them to predict, with high levels of confidence, which segments should be invested in and at what levels to drive measurable, targeted ROI.

Here’s a simplified version of how Segment BrandingTM works:

Behavioral Segmentation – Perform a deep dive on your customer transaction data to segment customers on what they’ve actually done…what purchases they’ve made with you. Organize customers into segments of current value.

Predictive Modeling – Develop models that help predict what future value (revenue and profits) you can realize from each segment.

Attitudinal – Qualitatively understand the “why of buy” – to learn why your customers do business with you, and why do they do business with your competitors. Use your brand tracking study and other qualitative techniques (ethnography, cultural assessments, etc.) to segment customers into attitudinal groups.

By combining these behavioral, attitudinal and predictive analysis, you can exercise “differential investment” strategies – investing the right resources against the right segments in the right way at the right time and voila! ROI!

A word to the wise here. Segments must be actionable – so keep the number of segments small, five or fewer is advisable. Remember, even Wal-Mart, with 200 million customers is focused on three.

If the world’s largest “mass merchant” chooses segmentation strategy to drive its growth strategy, so can you.

So what are you waiting for?