The Segmentation Syndrome: How CMO Turnover Undermines Customer Insight

Throughout my professional journey, which spans retail, manufacturing, real estate, and telecommunications, I’ve observed a recurring and costly pattern. When a new Chief Marketing Officer (CMO) joins an organization, there is a high likelihood that they will initiate a new customer segmentation project. On the surface, this might seem like a strategic refresh. However, in practice, it is often done without thoroughly examining the existing segmentation framework, its application, limitations, or impact. This oversight perpetuates a cycle of reinvention that ultimately yields minimal long-term benefits. 

Segmentation as a Political Victory

In a candid conversation with a seasoned CMO, I raised my concern about the segmentation-reset phenomenon. His response was telling. Segmentation is low-hanging fruit. It’s something a CMO can put on a slide and claim as a strategic win. While this approach may satisfy short-term optics, it neglects the long-term purpose of segmentation, which is to foster lasting, organization-wide insight into customer needs and behaviors; identify potentially profitable customers to whom marketers can channel customized promotional activities to enhance customer satisfaction and loyalty, and design superior selling strategies around customers' unique personalities, beliefs, and experiences.

When a segmentation framework is developed without understanding how current segments perform in the market, how they are operationalized in media buying or CRM, or whether teams use them, the new framework becomes another artifact in the corporate archive.

Segmentation Requires Stewardship, Not Showmanship

Segmentation should be treated as a long-term asset. Like any valuable asset, it requires stewardship. A new CMO should begin their tenure by auditing the existing segmentation framework and asking questions such as:

• What customer insights are embedded in current models?

• Which functions (e.g., media, CRM, product, customer experience) rely on these segments?

• Are the segments predictive, actionable, and up-to-date?

Only after answering the relevant questions should changes be made. Even then, adjustments should be evolutionary, not revolutionary. Marketers must focus on continuity, integration, and practical usage rather than symbolic relaunches.

To avoid the trap of segmentation resets, companies must align segmentation efforts with clearly defined purposes. This means developing segmentation schemes for specific goals, brand messaging, targeting, personalization, and innovation, rather than focusing on executive visibility.

• Psychographic segmentation can support positioning.

• Behavioral segmentation can support media and CRM efforts.

• Need-based segmentation can inform product development, service design, support positioning, and CRM efforts.

Without this alignment, segmentation becomes a siloed exercise. With it, segmentation becomes a strategic asset that evolves with the customer and the business.

Elevating Segmentation from Tactic to Asset

Segmentation is not a tool to score early wins. It’s a platform for sustained strategic insight. When CMOs initiate new segmentation schemes without understanding what came before, they risk repeating mistakes and wasting resources. Organizations must treat segmentation with the discipline and stewardship it deserves, making it not just a framework for customer classification but a foundation for competitive advantage.

To succeed, the next generation of marketing leaders must look beyond quick wins and commit to building segmentation systems that endure, empower, and evolve.

Coming soon: Purpose-Driven Segmentation, a must-read for marketers and strategists looking to unlock segmentation’s full potential by aligning customer insights with business goals. Stay tuned!