Truth Tips: The Science behind the Art in Segmentation

Clear segments, not blurry assumptions.

A good segmentation starts with clear principles…But it thrives when you make the most of your data and use stats to your advantage, not your detriment.

We love to say segmentation is both art and science... But let’s not rush to the paintbrush before we’ve done the math. Here are some sharp, practical tips

to help you turn your hard-earned data into something powerful : get the canvas ready for the artistry.

Tip 1: Clean Inputs - Sharp Segments

Normalise your variables because unscaled data = chaos.

Z-score it, min-max it — just don’t feed raw junk to your algorithm.

Tip 2: Ditch the Redundant

Redundant variables are the karaoke duets of data — unnecessary and often off-key.

Use VIF, correlation matrices, or factor analysis to shut them down.

Tip 3: Mix your Methods

K-means? LCA? Hierarchical?

Try more than one: segmentation isn't a one-model show.

Tip 4: Let the stats speak up (but not dictate)

Use fit indices like BIC, AIC, entropy, and silhouette scores to guide segment count.

But if 7 segments makes no sense to humans… it’s a no.

Tip 5: Weigh it like you mean it

Not all variables are created equal. Use weighting (based on business relevance or factor loading) to give the right ones the mic.

Tip 6: Pick the right distance

Euclidean is fine — until it’s not. Got mixed data? Use Gower.

Categorical-heavy? Go Latent Class. Choose wisely.

Tip 7: Validate it or regret it

Split your sample. Bootstrap it. Test it twice.

If your segments wobble on a different day…they're not real, they're hallucinations.

Tip 8: Link it or loose it

Cool segments? Great. Now show they predict something.

Tie them to outcomes : purchase, churn, ecosystem — or they’re just pretty pictures.

So What?

Before you name your segments or build the creative, make sure your data foundations are bulletproof. Segmentation isn't just analysis : it's applied strategy. Get the science right, and the art will flow naturally.

Prepared by Truth Consulting and our blended team of specialists in strategy, Data and Analytics. This content is based on a more detailed report so do let us know if you’d like to hear more!