Successfully reported this slideshow.
We use your LinkedIn profile and activity data to personalize ads and to show you more relevant ads. You can change your ad preferences anytime.

Customer Segmentation

2,119 views

Published on

Learn how to conduct market research and create customer segments in order to better target your product and increase revenues. This deck includes how to define target markets, create buyer personas, and integrate these customer segments across the company. Slides from a Customer Cegmentation class taught at Intelligent.ly by Jill Cartwright.

Published in: Business
  • Be the first to comment

Customer Segmentation

  1. 1. CustomerSegmentation 101JILL CARTWRIGHTjill@gogagalife.com
  2. 2. Nothing makes you learn like getting strippedof your acorn cap
  3. 3. What customer segmentation isI dont know the key to success, but the key tofailure is trying to please everybody.- Bill CosbyCustomer segmentation isa means of identifying and prioritizing currentand future customersin a way that is actionable and relevant toyour business
  4. 4. B2CManufacturer of ergonomically safetravel products for parentsB2BProvider of digital publishing ofecommerce enabled catalogsProducts: diaper bags, dry bags,changing pads, etc.Services: Development anddeployment of catalogs, catalogapps for mobile, etc.Let’s meet our subjects:
  5. 5. What’s relevant
  6. 6. § Age§ Disposable income§ Activity level§ Price sensitivity§ Number of kids§ Marital status§ Sexual orientation§ Where they liveGo GaGaWhat’s relevant
  7. 7. § Age§ Disposable income§ Activity level§ Price sensitivity§ Number of kids§ Marital status§ Sexual orientation§ Where they liveGo GaGa§ Type of business§ Ecommerce enabled§ Size of marketingbudget§ Size of company§ Company goals§ Distribution channelsZmagsWhat’s relevant
  8. 8. Not only does it make you sound smart, butit can save your business.§Focuses the entire team on the same target§Gives you a touchstone for making decisions§Prioritizes where to invest your resources§Increases customer retention§Identifies new market opportunitiesWhy segmentation matters
  9. 9. There’s no bad time to be thinking about yourcustomers§Before launch§With 6-12 months of sales data§When expanding into new markets or segments§When decisions become tough because you’ve lostcommon vision§Every 12-18 months after roll outWhen to do it
  10. 10. Hint: do not go to the library and check out 7 books onmarketing research1| Gather data2| Analyze3| Create segments4| Validate5| Roll out6| ReassessIt’s not all about ExcelNow it’s all about ExcelWhat’s actionableTalking with your front lineThis is the fun partChecking accuracy and relevanceHow to do it
  11. 11. This will be determined by what’s relevant and available§Demographics§Needs§Values§Purchases§Personality§Decision MakingWho they areWhy they buyWhat’s important to themWhat they buy (vs. what they say)What shapes their interactionsHow they shop and buy§Alternatives§InterestsWhat their options areWhat brings them joyWhat types of data to leverage
  12. 12. Hint: you will have to talk to people, just try not to get arrestedInterviewsCrowdsourcingSite analyticsOrder infoCustomer svc.On the street, on the phone, but best donewhile fully clothedPolls and surveys are often done first but aremore effective laterTraffic sources, flow, hang time, return visitsto name a fewThe most valuable because based on action, notintentGreat for capturing qualitative info whilestrengthening customer loyaltyHow to get it
  13. 13. You’re simply looking for trends – correlation versus causality isirrelevant1| Dump everything into Excel – survey results, purchasedata, demographics, etc.2| Begin by picking two features – age and gender, forexample3| Then add another layer – items purchased, repurchaserate, etc.4| See if it’s meaningful – if not, go one step back up your treeWhat to do with it
  14. 14. Identifying new markets for Go GaGaGenderKids?How usetheir bag?ExamplesMale FemaleYes NoKids Self Work FunDiaperbagLaptopGym bagCommuteCourierPhotogr.YogaPicnicYes NoSelf Work FunDiaperbagLaptopGym bagCommuteCourierPhotogr.YogaPicnicKidsTime to try
  15. 15. Identifying new markets for Go GaGaGenderKids?How usetheir bag?ExamplesMale FemaleYes NoKids Self Work FunDiaperbagLaptopGym bagCommuteCourierPhotogr.YogaPicnicYes NoSelf Work FunDiaperbagLaptopGym bagCommuteCourierPhotogr.YogaPicnicKidsEnthusiasts§Photography§Wine/picnic§BirdersProfessionals§Couriers§PhotographersCommuting§Bike§Public transit3 new marketsemergedTime to try
  16. 16. Shaping Go GaGa’s product roadmapKids?1st timeparents?1st purch.2nd purch.Yes NoYes NoAccessory Diaper BagNo“Diaper” BagAcquisition§Accessories get our foot inthe door for the secondpurchase, which was typicallya diaper bagRetention§Customers who love our bagwill continue buyingproducts if the price isaccessibleAccessories playtwo importantrolesDiaper Bag Accessory AccessoryAnother example
  17. 17. You’ll reach a lot of dead ends in the pursuit of actionable correlations,just like Isle Nine didGenderAgeMarried?1st purch.Male Female30-45 60+Yes No Yes NoShirt Shirt Shirt Shirt30-45 60+No Yes NoKids Shirt Shirt ShirtYesHow worn? Leisure Work Leisure Leisure Leisure Leisure Leisure LeisureSegments notsufficientlydifferentiatedSegments were evenly distributed across age and weighed heavily towards thepurchase of men’s shirts to be worn for leisure.The takeaway: just sell men’s Hawaiian shirts to anyone who will buy them.Sometimes it doesn’t work
  18. 18. Zmags identifies a new service offeringBrand or retailerPublished catalogbeforeSell direct/onlineBrand RetailerYes NoYes No Yes NoYes NoNo Yes NoYesLet’s give B2B its due
  19. 19. Zmags identifies a new service offeringBrand or retailerPublished catalogbeforeSell direct/onlineBrand RetailerYes NoYes No Yes NoYes NoNo Yes NoYesExamples Incr.contentROITestecomDrivesalesTestecomIncr.contentROITestecomDrivesalesTestecomSimple ecommerce engine run virtually by Zmags that enablesretailers and brands not selling online to testNew servicepossibilityLet’s give B2B its due
  20. 20. Forming the segmentsAfter you’ve lost all perspective, five key questions can get you on theright track1| Are there meaningful differences between these groups?2| Can I identify people based on these characteristics?3| Can I market to them based on these characteristics?5| Can I offer different products or services to meet the needsof different segments?4| Can these segments peacefully coexist?
  21. 21. Building out the personasThese two factors will lead to impactful segmentsWhat’s relevant to yourbusinessWhat will help your team toconnect with them§Are they the decisionmaker ?§What alternatives dothey have to youroffering ?§How price sensitive arethey ?§What’s on their playlist ?§Where do they live ?§What’s their marital status ?§What brand of coffee do theydrink ?§Do they have kids ?
  22. 22. Go GaGa’s personasAgeGenderIncomeWhere live?Activity levelChristine Hannah Alan DavidKidsSexual orienta.Relationshipstatus37Female$250,000 (HH)Downtown ChicagoAttends yoga 3x aweek and jogsGirl, 3 mos.StraightMarried31Female$42,000Jamaica Plain, MATeaches 7 x aweek & bikes toworkNoLesbianSingle42Male$150,000 (HH)Suburb ofBethesda, MDJogs 3x a weekBoy, 2 yrs &expecting 2ndStraightMarried28Male$100,000BrooklynWorks out 6 daysa week in thegymNoGayIn long termrelationshipFirst time parent? Yes No No NoEducation Masters Ugrad w/certificationsUgrad degree w/grad classesMBA at night
  23. 23. Go GaGa’s PersonasHobbies/Areas ofinterestMusicResearch processPrice sensitivityPersonal styleHiking & architectureMadeline PeyrouxOnline first thenin storeLowRocks DKNYRock climbing &ceramicsKate BushWord of mouthMediumLives in AthletaPunk rock & NPRThe Ramones &StonesWants to see & feelitLowRoxy shirt & cargoshortsPop art & travelPassion PitVery thorough –mostly onlineMediumHipsterPersonalityOccupation VP at an adagencyUpbeat but easygoingYoga instr. &massage ther.Loves being a dadSr. Dir of FinanceIntense at work &playDevelopmentofficerUptight
  24. 24. Zmags personasAgeGenderPositionYears in rolePersonalityPeter BlakeDecision makerSentiment aboutjobCulture35MaleDir. of Marketing4High energy, highmaintenanceInfluencer but CMOdecidesWants a promotion butneeds a win to stand outCompetitive – running of thebulls at Pamplona42FemaleCMO6, 13 with the companyDemanding but protectsher teamYesConfident but underconstant pressure todeliverPressure cooker,struggles to prioritizeCompany challenge Incr. revenue from housebrandsBuild their direct channel forbetter marginsEmployer Nieman Marcus Baby Phat
  25. 25. Avoiding the pitfallsRun these filters before finalizing the segments1| Too many segments2| Too narrow a focus3| Divergent groups4| Not actionably different
  26. 26. Validating the segmentsDon’t get bogged down trying to be certain – test ‘em instead!Pull another datasampleTalk with yourfront linePlace smallbetsPull another data set and see if the trendsare consistentYour customer service and sales teamknows your current customers bestRun a targeted email test, experimentwith Google AdWords, try a promotion
  27. 27. Rolling it out to the teamNow it really gets fun§Play their playlist§Create a facebook page for them§Develop a mood board§Start a book club§Have a guest appearance§Keep them top of mind every day
  28. 28. What your segmentation should impactIt can (and should) touch every facet of the businessBrandingCustomer serviceHiringTagline, marketing messages, wordchoice, phone greeting, etc.Policies, hours of operations,methods of contactPersonality, diction, energy level,hobbiesProduct roadmap Future features, service/productofferings, pricingUser experience Site design, sales process, storelayout and more
  29. 29. Course TitleCourse TitleINSTRUCTOR NAME

×