Segment

Definition and boundary

A segment is a cut grouping people who behave similarly in the face of the decision at hand. The defining feature is behaviour relevant to that decision. A grouping that does not separate behaviour is a label, not a segment.

Size, sector, region and time as a customer are possible dimensions. None is automatically the right cut. Measure the relevant behaviour within each candidate grouping. Useful segments are similar internally and distinct from one another. See the segment glossary entry.

Where segments matter in practice

Segmentation matters when choosing whom a product decision should serve. Adopting the commercial team's categories may simplify internal conversation. It does not establish that those categories separate behaviour. A poor cut can produce an average design that serves nobody well.

Use a segment sheet to record the defining behaviour, size in the base, revenue weight, frequent requests and most recent decision taken because of the segment. That last field tests usefulness. A sheet without an associated decision describes a segment that is not in use.

Review the rivalry grid by segment, rather than once for the whole product.

Neighbouring terms and CPM-E preparation

Total market describes the universe of organisations that could use the product if constraints fell away. Reachable market describes the portion the current operation can serve today. Segment instead identifies behavioural similarity for the decision at hand.

A substitute meets the same need through another route, including manual work or staying as things are. Segment identifies the people grouped by behaviour, not the alternative solution.

For CPM-E certification preparation, distinguish a behavioural cut from a convenient label. Check whether the grouping separates relevant behaviour and whether it informs a concrete decision.