[Case Study] Market Segmentation Research to Improve ROI from Customer Acquisition Efforts

[Case Study] Market Segmentation Research to Improve ROI from Customer Acquisition Efforts

This building materials manufacturer sought to understand how their current customer perceptions aligned with reality; in other words, what did they assume about their customers that was or wasn’t true? The data and recommendations provided by The Farnsworth Group allowed for targeted marketing toward customer segments who best align with the manufacturer’s product portfolio and value propositions. These findings both confirmed and challenged assumptions within the client’s firm.

Problem

In 2022, a leading manufacturer of siding partnered with The Farnsworth Group to better understand which customer segments should be targeted to expand marketing initiatives and improve ROI of customer acquisition efforts.

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This building materials manufacturer sought to understand how their current customer perceptions aligned with reality; in other words, what did they assume about their customers that was or wasn’t true?

Process

To provide these answers, the research team at The Farnsworth Group conducted attitudinal and demographic segmentation research among contractors to define unique contractor segments involved in siding projects.

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The research was designed to yield information about the demographic (age, trade, experience) and firmographic (size of firm, number of siding projects, firm revenue) make up of each attitudinal segment to highlight similarities and differences.

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These attitudinal segments investigated the following:

  • Brand/Manufacturer relationships
  • Differentiators between brands
  • Homeowner engagement
  • Contractor structure

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Using a K-Means Clustering Analysis, we took responses of roughly 40 attitude statements to group like-minded respondents. This analysis requires respondents to evaluate their level of agreement with a statement on a 1-10 scale. These ratings are then standardized and ‘grouped’ into like-minded segments. 

Outcome

When comparing the firmographic and demographic makeup of these groups, distinct differences emerged. This allows us to create profiles, or personas, of who each segment represents, and the size of each segment relative to the whole customer market.

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The data and recommendations provided by The Farnsworth Group allowed for targeted marketing toward customer segments who best align with the manufacturer’s product portfolio and value propositions. These findings both confirmed and challenged assumptions within the client’s firm.

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Insights gained by the client included and understanding of:

  • Which contractor segments should be targeted primarily due to their brand use and consideration
  • Which contractor segments should be targeted based on project activity
  • Which contractor segments should not be targeted because they do not align with the market proposition desired by the building material manufacturer

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Equipped with these valuable insights, the client was able to inform their customer acquisition strategies to improve ROI from marketing and sales spend.