Understand and Action - WiseGeo Segmentation

A common sense approach to segmentation

Segmentation is the grouping of people by common traits

At WiseGeo we have worked with many commercial market segmentation systems in Canada, USA and Europe. We have found while these systems are mathematically correct, there were areas for improvement for their many purpose - usability. WiseGeo's data analytics platform is designed to automate number crunching and make data analytics easy, accessible and actionable for all types of users within all size businesses. We leveraged this corporate mission when creating our Canadian segmentation system.

Make segments easy to understand

Segments should be descriptive where an image and quick description is all that is needed for executives, analysts and marketers to understand who belongs to a segment and can visualize their needs.

As data scientists, we understand and value the importance of math (algorithms, artifical intelligence, random forest analysis...) to create a strong segmentation system. What makes WiseGeo's unique is our overriding principle that our segmentation system is designed for people to use, understand and support decisions.

Traditional segmentation systems require extensive learning for internal users to understand what their meaning. For example, a segment named "Pets and Computers" would be confusing.

WiseGeo segmented the Canadian population into 10 equal segments based on life-stage and lifestyle properties. For example, the "Millennials" segment concentrates on people age 20-34. Our naming and grouping criteria strive to make it easy for all stakeholders to understand.

Segmentation in Canada

Actionable number of segments

Most companies focus effects on 2-4 segments of the market; anything more is not actionable for creative design and can only be used with Facebook Targeting, A-B testing and Direct Mail targeting.

At WiseGeo, we have worked with segmentation systems in Canada with 68, 109 and up to 150 unique clusters. This vast number of segments may be mathematically sound but provides little value for decision makers.

WiseGeo's segmentation system includes 10 segments that are easy for all marketing and decision maker to understand. Our segments are large enough to ensure you can do something (critical mass) and outcomes meet this ideal target of 2-4 vital segments for most analyst projects.

Consistent segment size

Segments of similar size can be benchmarked and compared by analysts of all skill level.

Standard index values, percentages, aggregate counts, rank orders and counts do not work when comparing segments with varying base counts. How can you compare segments if one has a National base counts of 200k and another 1.3 million households without including bias?

Consistent base counts of 10% of households means the traditional methods data analysts use to benchmark and analyze segments are consistent.

Use actual data not data projections

Census data provides the most quantifiable data available in Canada

The root or anchor variables for a segmentation system should be based on actual data when available.

WiseGeo's segmentation system is based on Census data. Specific variables and weighting used in the algorithms were developed by WiseGeo data scientists. For data people, we use decision tree and random forest artificial intelligence methods.

Neighborhoods are not always homogenous

For privacy reasons, segmentation systems in Canada need to be based on geo-locations that do not include personally identifiable data. This means segments are based on a group of houses on the same street or neighborhood not individual households/people.

The issue to overcome when grouping households together is that all your neighbors should belong to the same segment. For example, in older neighborhoods it is common to have retirees living next door to young families - while the housing prices are similar the lifestyle characteristics of the neighbors are vastly different.

WiseGeo is unique as our segmentation system allows for multiple segments in a specific geography.

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Deeper dive capabilities

Each of WiseGeo's 10 high level, marketing segments consist of 5 equal-sized sub-segments. These sub-segments are designed to help identify and action against a very specific type of customers. We find this level of analysis best suited to companies with dynamic digital marketing campaigns (e.g. Facebook targeting and geo-location), companies focusing on new or emerging markets (e.g. Millennials, ethnic-based products/services, families), direct marketing initiatives (targeted Admail, flyers) and advanced customer level intelligence.

For example our "High Income Segment" includes 5 sub-segments. Each sub-segment represents approx. 250,000 households:

  • 1a CEOs - highest income households in Canada
  • 1b Worldly – speak non-official languages at home
  • 1c Retired executives - age 65+
  • 1d Young executives – families with young children
  • 1e Established executives – age 45-65

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by Brad Ross

Data Scientist

Follow @BradARoss or @WiseGEOcom on Twitter


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This article was written using insights from WiseGeo apps


Location Insights Demographic Profile Millennials Toronto Profiles Target Marketing Real Estate Neighborhoods


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most wealthy community in Canada profile


$225,646 median income
hint: Not in a big city

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most affluent neighborhood in Toronto


$215,698 median income
hint: Rosedale Golfing and Bridal Paths

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Community with the most millennials in Canada

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Contact us

WiseGeo Inc.

Mailing: 28 Emerald Cres., Etobicoke, ON, M8V2B4

Studio: 222 Islington Avenue, Toronto, ON

Contact: support@wisegeo.com or 647-402-1548