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Rapidly do customer segementation analysis with ChatGPT
Let's build a prompt which helps us rapidly analyze customer segments
Today we’re going to learn how to do customer segmentation analysis with ChatGPT. And as we’ll see, when we use a well-designed prompt, we can do about 75% of the required work in less than 10 minutes.
Let’s first understand what customer segmentation analysis is. Customer segmentation analysis is a marketing strategy that involves dividing a company’s customers into segments that share similar characteristics. The goal is to identify important segments, meaning those customer segments that are more profitable or have growth potential. These customers are the ones for whom more personalized marketing strategies can be developed and implemented.
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These characteristics can include a wide range of factors, such as:
Demographics: This includes characteristics like age, gender, income level, education level, marital status, and occupation.
Geographic location: Customers might be grouped based on where they live or work.
Behavioral patterns: This invovles observing how customers interact with a product or service, including their purchasing behavior, usage rate, brand interactions, and product preferences.
Psychographics: This can include aspects like lifestyle, attitudes, values, and personality traits.
By analyzing these different characteristics and grouping customers accordingly, companies can better tailor their products and services to meet the specific needs and preferences of different customer segments, leading to more effective marketing and ultimately generating sales and ensuring customer loyalty.
So now that we understand what customer segmentation analysis is, let’s think about how someone could use ChatGPT to build out such an analysis. Let’s say you work for a new social media platform, and your boss has tasked you with creating a customer segementation analysis. But you’ve never done one before, and have only a vague idea of what they are. You’ve Google a bit, but Google isn’t returning great information.
Here’s where ChatGPT comes in. I created the following prompt:
You’re a marketing expert. I want you to introduce yourself, and tell me that you’re ready to help me with my marketing project. I will tell you my project, then I want you to ask me a series of questions about it. You will ask one question, then I will provide an answer. Then your next question should be informed by my answer. After you have asked me five questions, and I have provided five answers, please summarize the problem to be solved and the ideas that we have come up with.
This prompt does a few important things:
It is structured such that ChatGPT responds to your responses. This makes ChatGPT more chat-like than the simple prompt—>output model with which we are familiar.
The dialogue is non-deterministic, in that it depends both on your responses to ChatGPT’s questions, and on the questions ChatGPT asks you in response to your responses.
The prompt instructs ChatGPT to terminate the chat after a set number of question-response interactions, and then summarize the problem and ideas generated.
The end result is both a rapid and comprehensive exploration of the problem at hand. In less than five minutes of interacting with ChatGPT1 I have a great outline for my analysis, and probably about 75% of the information I need. All I would have to do at this point would be to synthesize all of the information into a deck.
Anyway, let’s take a look at what we’ve come up with. The dialogue appears between the section breaks below. After the dialogue, I have some additional thoughts about how this can be made even better the next time.
ChatGPT: Hello! I'm thrilled to assist you with your marketing project. As a marketing expert, I specialize in developing effective strategies, crafting compelling messages, and identifying innovative approaches to help businesses achieve their goals. Whether you're looking to enhance your brand awareness, launch a new product, or improve customer engagement, I'm here to provide guidance and expertise.
Now, I'd love to learn more about your project. Please go ahead and share the details with me.
Me: Great! I need to do a customer segmentation for a new social media platform I'm building. How do I go about doing this?
ChatGPT: Thank you for sharing your project details! To assist you with customer segmentation for your new social media platform, let's begin with some foundational questions:
Who is your target audience for the social media platform? Understanding your target audience is crucial for effective segmentation. Please describe the demographic characteristics, such as age, gender, location, and any other relevant factors that define your ideal users.
Me: Great points. Age: most users will be between 18 and 50 (a broad range!), gender: both male & female; location: global. Any other information you need from me?
ChatGPT: Thank you for providing those initial details. Here's the next question to further refine our understanding:
What are the primary interests or hobbies of your target audience? Identifying the interests, hobbies, or specific areas of focus that resonate with your target audience will help us create more targeted and relevant segments. For example, are they interested in sports, fashion, technology, music, or any other specific areas? Please provide any additional information that can help us understand their interests.
Me: I imagine that most of our early users will be interested in technology. They are so-called "early adopters".
ChatGPT: Thank you for specifying the interest in technology and identifying them as early adopters. Here's the next question:
What are the key motivations or needs of your target audience for using a social media platform? Understanding the motivations behind why your target audience would use a social media platform will enable us to create segments based on their specific needs. For example, are they looking for networking opportunities, staying updated on the latest trends, connecting with like-minded individuals, sharing content, or something else entirely? Please provide any additional insights into their motivations.
Me: From our preliminary research a lot of potential users are tired of the legacy social media platforms using their data without compensation. They want control over their social media experience.
ChatGPT: Thank you for sharing that valuable insight about your target audience's motivation for using a social media platform. Here's the next question to delve deeper:
Are there any specific demographics or characteristics that distinguish your target audience within the broad age range of 18-50? Identifying specific demographics or characteristics within your target audience can help us create more refined segments. For example, are there any subgroups within the age range who exhibit similar behaviors, values, or preferences? Additionally, if there are any notable characteristics that set them apart from the general population, please provide those details.
Me: Well, as I say the people who are most likely to use our platform, at least initially, are early adopters who are interested in technology. So I think an interest in technology, and new tech platforms, especially, sets them apart from the general population.
ChatGPT: Thank you for emphasizing the interest in technology and new tech platforms as a distinguishing characteristic of your target audience. Based on the information provided, here's the final question:
Once you've provided your response, I'll proceed to summarize the problem to be solved and the ideas we have discussed so far.
Me: So one thing we're thinking of is providing users with the ability to customize the algorithm which provides them with their news feed. Further, we're exploring ways to allow users to monetize the data they generate. One idea we have is to create a market of custom, user-created feed algorithms. These custom algorithms can be sold by users to other users.
ChatGPT: Thank you for sharing your ideas on addressing user control and data privacy concerns. Based on our discussion, here's a summary of the problem to be solved and the ideas we have generated:
Problem: You are building a new social media platform and need to perform customer segmentation to effectively target your audience.
Customer Segmentation Considerations:
Target Audience: Broadly, the target audience is between the ages of 18 and 50, both male and female, and located globally.
Primary Interest: Most users are early adopters interested in technology.
Motivations/Needs: Users desire control over their social media experience and data privacy, particularly due to dissatisfaction with legacy platforms.
Distinguishing Characteristic: Interest in technology and new tech platforms sets them apart from the general population.
Customizable Algorithm: Provide users with the ability to customize their news feed algorithm, allowing them to have more control over the content they see.
Monetization of User Data: Explore ways to allow users to monetize the data they generate on the platform.
User-Created Feed Algorithm Market: Create a marketplace where users can sell custom feed algorithms to other users, offering a personalized and tailored experience.
These ideas align with addressing user concerns and providing a unique value proposition for your social media platform.
Is there anything else you would like to discuss or any specific areas you would like to focus on further?
Me: Based on this information how would you suggest that I proceed with creating this customer segmentation analysis? What's a good outline for a deck about this topic?
ChatGPT: To create a customer segmentation analysis and develop a compelling deck on the topic, I would recommend the following outline:
Briefly introduce the purpose of the deck and provide an overview of the customer segmentation analysis for your new social media platform.
Target Audience Overview
Describe the general characteristics of your target audience, including the age range (18-50), global location, and gender distribution.
Interest and Behavior Analysis
Highlight the interest in technology and new tech platforms as a key characteristic of your target audience.
Discuss any specific behaviors or preferences related to technology that set them apart from the general population.
Provide supporting data or research findings, if available, to reinforce these points.
Motivations and Needs
Explain the primary motivations and needs of your target audience regarding social media platforms, emphasizing their desire for control over their social media experience and data privacy.
Discuss the dissatisfaction with legacy platforms and how your platform addresses these concerns.
Elaborate on the distinguishing characteristic of your target audience, i.e., their interest in technology and new tech platforms.
Explain how this characteristic aligns with your platform's value proposition and unique offering.
Customer Segmentation Framework
Present the proposed customer segmentation framework that will help categorize and target different segments within your target audience.
Highlight the key criteria or variables you will use for segmentation, such as demographics, interests, motivations, or behaviors.
Discuss the rationale behind each segment and how they align with your target audience's characteristics and needs.
Provide a detailed profile for each identified segment, including demographic information, interests, motivations, and needs.
Highlight any distinct characteristics or preferences of each segment that will inform marketing strategies and messaging.
Recommendations and Strategies
Based on the customer segmentation analysis, propose targeted marketing strategies and tactics for each segment.
Emphasize how these strategies align with the unique needs, motivations, and preferences of each segment.
Consider addressing the customizable algorithm, user data monetization, and user-created feed algorithm market ideas within the strategies.
Summarize the key findings from the customer segmentation analysis.
Reinforce the value proposition and differentiation of your social media platform.
Highlight the importance of targeted marketing approaches to effectively engage with each segment.
Remember to include visual elements, such as charts, graphs, or infographics, to enhance the understanding and visual appeal of your deck. Additionally, consider incorporating supporting data, research findings, or case studies to strengthen your arguments.
By following this outline, you can create a comprehensive and persuasive deck that effectively communicates your customer segmentation analysis for your new social media platform.
Here’s how I would improve this for the next time:
I would modify the first prompt to have ten questions and responses. Ten feels a bit more comprehensive than five. Customer segmentation can be fairly complex, and it’s important to ensure that you’re not missing anything when you do it. Insofar as ChatGPT understands anything, it seems able to reason2 adequately about customer segementation analysis.
I would modify the first prompt to have ChatGPT make suggestions about things that I don’t seem to be considering (“tell me what I am missing, or not thinking of”).
I would modify the first prompt to have ChatGPT suggest resources for me to learn more about customer segmentation analysis.
I used ChatGPT3.5 for this exercise. The time would be somewhat longer for ChatGPT4, since that model is slower than 3.5. But the time difference shouldn’t be significant.
Yes, I understand that large language models cannot be said to reason in the way that people reason. But I don’t have any good word to describe what it is that ChatGPT does, other than “reason.”