segmentation, positioning and targeting


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segmentation, positioning and targeting

  2. 2. Topic of your course work Deadline for the topic is 27th of March.
  3. 3. Online Marketing Research Framework 1. Getting Customer Insights - know your user and what their pain points are and you can develop content and social media activities that speak to them. Tools – user personas, social technographics 2. Understand Why People Go Online - people go online for two simple reasons: to answer a question or get an update. 3. Keywords brainstorming 4. Keywords research - user persona helps guide what content needs to be created to earn this engagement. Also links and optimizing each page for search is critically important for climbing in the rankings. Tools: Google Keyword Tool, Google Trends,, Open Site Explorer, SEOmoz toolbar Doing our homework upfront helps ensure we don’t custom build an online brand experience that nobody will interact with.
  4. 4. Why start with customer need rather than jumping straight to keywords or content creation? Content Strategy You want to provide content and tools that are as relevant and useful as possible to your target audiences. Targeted Keyword Discovery Ideally you’ll want to do keyword research based on what the audience wants, not solely on what content the site already has (or plans to have sans audience targeting), which may be limited. You may find there are needs that your site is not meeting.
  5. 5. Why to think like a customer? Lots of risks online Customers more keen to criticize Understanding their needs Customers can voice their dislikes Marketing is evil
  7. 7. STP process Segmentation > targeting > positioning Market segmentation is the process in marketing of dividing a market into distinct subsets (segments) that behave in the same way or have similar needs. Because each segment is fairly homogeneous in their needs and attitudes, they are likely to respond similarly to a given marketing strategy The process of segmentation is distinct from targeting (choosing which segments to address) and positioning (designing an appropriate marketing mix for each segment). The overall intent is to identify groups of similar customers and potential customers; to prioritise the groups to address; to understand their behavior and to respond with appropriate marketing strategies that satisfy the different preferences of each chosen segment.
  8. 8. What will be you biggest marketing challenge this year? (segmentation is on the rise AGAIN)
  9. 9. Majority of the companies use the most basic segmentation methods (demographics for B2C and firmograpics for B2B) Frequency of occurrence of criteria used among respondents using segmentation
  10. 10. STP TECHNIQUES: 1. Customer profile characteristics (demographics) 2. Current and predicted value 3. Customer lifecycle groups. Since our knowledge of online marketing is so strong there are great opportunities for targeting through behavioral email marketing and website personalization. 4. RFM analysis 5. Customer multi-channel behavior (channel preference). Grouping customers according to channel preference.
  11. 11. (1) Demographics • Most traditional segmentation • For B2C e-retailers this will include age, sex and geography. For B2B companies, this will include size of company and the industry sector or application they operate in
  12. 12. (2) Current and predicted value Essence – quantifying customer value How can it be calculated? Useful way of thinking about customer value is three groups (identified by Peppers and Rogers): 1. 2. 3. Most-valuable customers (MVCs) Most-growable customers (MGCs) Below Zero Customers (BZCs). When considering loyalty-based segmentation, it’s useful to compare current against future/strategic value
  13. 13. Example: Otto
  14. 14. (3) Customer lifecycle groups Many companies are surprised to find that customers have a life cycle, similar to the more familiar product life cycle. Most marketing strategies address a single phase of the life cycle, such as the customer acquisition process, or after sale support. But customers require care and attention during every step. Why? the key to marketing has traditionally been to “cover all the bases”—in other words, to get in at all customer touch points. this can be a dangerous concept. think back to your last interaction with a company that “covered all the bases.” Was it an overwhelming experience, borderline annoying? this is quite possible, especially if that company tried to cover everything all at once.
  15. 15. Customer lifecycle with most relevant touch points
  16. 16. (4) RFM analysis RFM stands for • Recency - How recently did the customer purchase? • Frequency - How often do they purchase? • Monetary Value - How much do they spend?
  17. 17. tch?v=OYohJxp2l9k very simple explanation tch?v=n5lXj4sPGGc in-depth explanation
  18. 18. cons 1. method is descriptive only, and does not provide a mechanism to forecast behavior as a predictive model might 2. when used to target customers for promotion, it assumes that customers are likely to continue behaving in the same manner. That is, it does not take into account the impact of life stage or life cycle transitions on likelihood of response. 3. when used as the primary targeting method, it may lead to overmarketing to the most attractive RFM segments and to neglect of other segments that would be profitable if developed properly.
  19. 19. (5) Customer multi-channel behavior No matter how enthusiastic you are about online channels, some customers will prefer using online communications channels and many others will prefer traditional channels. Just one aspect of this is determining which customers prefer email and then upweighting email activity more for them, while reducing frequency and using more traditional communications for those who prefer these. A Channel: a customer contact point, a medium through which the firm and the customer interact (Neslin et al., 2006).
  20. 20. Consumer segmentation shows that the best customers for a retailer's brick-and-mortar stores may be very different from its best online shoppers. According to the bar chart displaying Nielsen PRIZM segments, Wal-Mart's most loyal fans are found in midscale and working-class exurban segments and the company should prospect for new customers in the dark blue areas in the map on the left. To expand the customer base for, however, the company should focus on younger, metro segments. And to increase the most loyal customers—who shop at both Wal-Mart and— the company should design cross-channel marketing and merchandising initiatives. Sources: Nielsen PRIZM, Mediamark Research & Intelligence
  21. 21. PERFORMANCE METRICS AND SEGMETATION FOR DIFFERENT ONLINE BUSINESS MODELS 1. 2. 3. 4. eCommerce and Retail sites Lead Generation sites Advertising and Media sites Customer Support sites
  22. 22. (1) eCommerce and Retail sites These sites optimize heavily around not only getting the visitor to place an order, but also to increase average order size through promotional cross sell techniques. Segmentation dimensions for such sites could include: – Performing an offsite product search within a search engine (knowing the keywords) – Onsite product search – Product page views – Cart additions/abandons/removals – Shopping cart process stage abandons – Check outs – Selecting varying shipping & handling rates – Response to order confirmation upsells – Entering promotional codes
  23. 23. EXAMPLE Segmenting visitors into “browsers” and ”vbuyers” based on past purchase history is another key segment for many online retailers. Allows to identify content preferred by the more valuable “buyers” segment and to place more attention to those pages and content while simplifying the navigation to these pages you effectively improve the overall customer experience.
  24. 24. (2) Lead Generation sites On sites where complex and prolonged sales take place offline, optimize the marketing mix around behaviors that eventually lead to he closed sale. Such behaviors along the way may include: – – – – – Viewing product demos or product-related webinars Viewing product pages Filling out lead/inquiry forms Downloading product information Holding a meeting with a company representative Demographic and firmographic (same as demographic but elements specific to companies), data may be appended to each visitor resulting in the further clarification and understanding of segments and profiles via third-party data appends. Through lead / inquiry forms or surveys, further psychographic, demographic and behavioral data may be appended such as company size, location, and purchase stage.
  25. 25. (3) Advertising and Media sites Goal - to acquire and direct new visitors to as many pages and pieces of content as possible in order to generate advertising views for paying customers. – Referring domains as well as search keywords and phrases to overall traffic volumes – New visitors viewing of individual pages and content – Conversion metrics that will lead to increased retention and loyalty, such as newsgroup sign-ups, alert features and chat – Campaigns that are successfully driving desired demographic or behavior profiles traffic to your site Advertisers to your site may also be interested in knowing how their ads are resonating with key demographic and psychographic segments. Example: How are their ads performing with females vs. male audiences?
  26. 26. (4) Customer Support sites Customer Support sites will likely key in on the visitors ability to find specific kinds of information. As the online marketer for a self-service or support site you may want to look at segments including: – “Information found” conversion rates by various visitor groups – Key words and phrases requested by new visitors – Time spent on top pages by new or returning visitors
  27. 27. The performance metrics listed in previous slides for the various business models are simply a place to start, you may need different metrics and many more depending on your specific needs. The key to any metric for any segment is to answer the question, “Is the information actionable?” If the indicator does not have the potential to drive action, it is probably not a good key performance indicator for your business.
  28. 28. Online Marketing Research Framework 1. Getting Customer Insights - know your user and what their pain points are and you can develop content and social media activities that speak to them. Tools – user personas, social technographics 2. Understand Why People Go Online - people go online for two simple reasons: to answer a question or get an update. 3. Keywords brainstorming 4. Keywords research - user persona helps guide what content needs to be created to earn this engagement. Also links and optimizing each page for search is critically important for climbing in the rankings. Tools: Google Keyword Tool, Google Trends,, Open Site Explorer, SEOmoz toolbar Doing our homework upfront helps ensure we don’t custom build an online brand experience that nobody will interact with.
  29. 29. How is it that some web sites just click, the moment you look at them? – What makes some people just love Grolsh beer, while others swear by Guinness? – Why do you like BMWs, while I like Teslas? – Why do I like one candidate, while you like another? This isn’t luck. Someone designed these brands or campaigns to appeal to certain personalities. And they started with personas.
  30. 30. Getting Customer Insights Know your user and what their pain points are and you can develop content and social media activities that speak to them. Two tools will review in-depth: – USER PERSONAS – SOCIAL TECHNOGRAPHICS
  31. 31. ASSUMPTION FROM THE PAST Traditionally marketing has looked at demographic and psychographic data as ways to identify and segment customers. “Female, upper-income, 25-34, African American, college-educated, who prefers high-end brands” was good enough for a long time. The thought being that by going narrower, the marketer gets a better return on their marketing dollars and does not pay to interrupt customers who would have no interest in buying.
  32. 32. CUSTOMER PERSONAS WHAT IS PERSONA? A persona is a group of visitors that visit a website, that share a common objective, purpose or background which make them distinct from another group of visitors. Used in design for years “day in a life of customer” demographic data + psychographic data emotions and empathy Allows to articulate consumer needs better
  33. 33. Why use personas? Forcing us to think like the customer many organisations start with the mind-set of “we have these products or services, they have these benefits and features, let’s find people who want to use them”. If you use personas, the customer always comes first Making keyword research more efficient working out which keywords are likely to be uses by the personas you develop gives us a starting point for keyword research that may be broader than just asking the question “what would I Google to find this site?” Improving customer journeys All websites have goals and personas will help you to work out how your visitors might want to get there, making your customer journeys efficient and smooth Making sure we use engaging imagery We’ve all experienced hours of trying to find a stock photo that will fit a website or, even worse, the CEO who says “I want a big picture of a smiling man pretending to shake hands with somebody”. Personas give you a starting point in that search, and a diplomatic way to put that CEO back in his box Giving us ideas for and helping us launch linkbait One of the most important steps in creating linkbait is to know what appeals to your target audience, and what they’re likely to share. Personas can help provide you with that knowledge and launch a successful viral campaign
  34. 34. The easiest way to understand personas is through some examples: CHARITY WEBSITE - some visitors will come to the site to look to volunteer; others will want to understand how to fundraise. You might also get some media folk who aren't interested in doing either and just want to write about the good work the charity does. E-COMMERCE WEBSITE E.G. HANDBAGS - here nearly everyone will come to the site to look at buying a handbag. But you'll get some men looking to buy for the lady in their life; some women looking to buy for themselves; some women looking to buy but not for themselves; and you may even get a curious group of men who are looking to buy another man a bag. B2B WEBSITE - regardless of the industry, whether it's finance, incentives or call centres, the different personas may reflect the different levels of seniority of visitor that come to your site, e.g. finance assistant, finance director, business owner...etc.
  35. 35. DIFFERENCE BETWEEN TARGET AUDIENCE AND MARKETING PERSONA A target audience identifies a broad category, such as “High School”. A marketing persona goes deeper by identifying more specific behaviors, such as habits, wants and needs of the of the individuals in the target audience.
  36. 36. Another example:
  37. 37. How to build customer personas?
  38. 38. Demographic data • Name • Position in an organisation (if you’re working on a B2B persona), or income level if B2C • Age • Marital Status • Number of children • Home owner or renting? • Education level • Do they hold the purse strings, or are they recommending to the person who does? • How engaged are they with social media, and which social networks do they use? • Other media they consume
  39. 39. Knowing these details will help you both to connect with each persona, and will provide insight into how they may think. For example, somebody who is 44, has two children and has a mortgage is a lot more likely to want financial stability and to save some of their income than a 22 year old who has just finished university and doesn’t have any financial commitments. This in turn will make their decision making process different from the 22 year old.
  40. 40. What are their pain points? Does your persona have a task they want to automate, a product they want to find more cheaply, a job function they want to outsource, information they can’t find anywhere else? What problems do they have that you can solve?
  41. 41. example
  42. 42. How can my set of products or services help to ease that pain? My product might benefit you in fifty different ways, but if you don’t really care about the first three in my list you are unlikely to engage with my website. If I can solve your pain in a few sentences, you will want to give me your credit card details, or subscribe to my RSS feed, or recommend me to your friends
  44. 44. The 3 Groups of Personas 1. Focal personas 2. ‘Eh’ or OK personas 3. Exclusionary personas Build for the focal personas, and to filter out the exclusionary personas. Present as neutral a face as possible to the rest.
  45. 45. IMPORTANT NOTE: personas are ever changing
  47. 47. Sample personas • _cm.pdf • arch/example-user-persona/
  48. 48. Social Technographics Studies done by Forrester Research Analyzing the online habits of U.S. adults Company developed various categories to help the marketer predict what they might expect for engagement Note: These consumers are still sliced in part by demographic data. As you might expect, participation can vary widely by age and a bit by gender.
  49. 49. Source: Forrester Global Social Technographics Update 2011
  50. 50. Creators sit at the top and at least once a month publish a blog or article online, maintain a Web page, or upload videos to YouTube, or upload audio/music, write articles or stories and post them. These are wired, techy people who feel the itch to create digital content to share with others. They use platforms like Blogger, WordPress, and Tumblr. Conversationalists, while not quite as engaged, update their status on a social networking site and post updates on Twitter. These are individuals who update Facebook, LinkedIn, or tweet. Critics post ratings/reviews of products or services, comment on someone else’s blog, contribute to online forums, and will add/edit articles in a wiki. These are the individuals we rely on so heavily when trying to ascertain whether a product or service is any good, in absence of a reliable word of mouth source. They’ll use Google Reviews, Yelp, TripAdvisor, or Foursquare. Collectors use RSS feeds, vote for websites online, add “tags” to web pages or photos. These individuals might curate content on Digg or StumbleUpon. They will tag friends on Facebook or Flickr. They use a service like Flipbook or Google Reader to consume site updates via RSS. Joiners maintain a profile on a social networking site and visit social networking sites. These are the casual participants that are on these networks and swing by from time to time. Spectators make up the bulk with roughly 3 out of 4 of online Americans and Europeans falling into this category. They read blogs, listen to podcasts, watch video from other users, read online forums, read customer ratings/reviews, and read tweets. They might check Facebook on a daily basis but they do not necessarily post content for others in their network to observe. Inactives have been shrinking since the study began. They do not participate in any of the above activities.
  51. 51. OTHER EXISTING STUDIES ON DIGITAL SEGMENTS 1. McKinsey study 2. Digital life study
  52. 52. McKinsey study (a bit outdated – study of 2001) 1. 2. 3. 4. Connectors: New users; more offline purchase Samplers: Light users Simplifiers: Efficiency seekers Routiners: Go online for information but not primarily interested in shopping 5. Surfers: Heavy users; spend lots of time online; Searching multiple domains 6. Bargainers: Online price comparison; Shop for the best buy 7. Funsters: Looking for information in entertainmentoriented domains
  53. 53. DIGITAL LIFE STUDY Based on conversations with over 72,000 people in 60 countries, Digital Life’s size, scale and detail make it the most comprehensive view of consumer attitudes and behaviour online, on a global and local level. Done on yearly basis. Intro: 6 digital lifestyles: INFLUENCERS, COMMUNICATORS, KNOWLEDGESEEKERS, NETWORKERS, ASPIRERS, FUCTIONALS
  55. 55. ASPIRERS
  56. 56. NETWORKERS
  60. 60. Short quiz
  61. 61. How you can relate your developed personas together with social technographics? Great tool from Forrester Research (free but available only for bigger countries and markets than Lithuania) You can find the tool here:
  62. 62. Key takeaway: By layering Social Technographics research on top of our user persona that already includes interviews, demographics, and psychographics, we can have confidence our social media efforts will resonate with our target market.
  63. 63. • • • • • Google AdWords account? Business? campaign goals and strategy Pre-Campaign Report Upload Pre-Campaign Reports and Credit AdWords Account. Once the student teams have uploaded their Pre-Campaign Reports, student teams request crediting within the dashboard. We will then verify and credit the associated AdWords account with US$250. • You may run your campaign over any three consecutive weeks from February 12, 2013 to June 14, 2013. WHEN YOU WILL RUN YOUR CAMPAIGN? • Post-Campaign Report/Impact Statement
  64. 64. Pre-campaign report Source: The Pre-Campaign Report has three components: • Client Overview (12 points) that describes your client business • Proposed AdWords Strategy (13 points) that helps your team craft and defend your draft AdWords Strategy • Communication and Readability (5 points)
  65. 65. Client Overview (12 points, about two pages) Client Profile (2 points): • Name, Location • Number of employees • Goods and services offered • Key online marketing personnel • Age of the company • URL • Website Age • Website Management • Social media such as Google+ • Company presence and sales via online and offline channels • Other relevant information Market Analysis (4 points) • Current and potential customers • Current and potential competitors • Overview of the industry (key characteristics, competitive/saturated/mature) • Projected and historical online spend for the industry • • Market position/specialties Unique selling points of the goods/services offered • Seasonality of their goods/services or seasonality that the company has identified • Other relevant market information Current Marketing (4 points) • Website uses, e.g. sales, customer service • Website strengths and weaknesses • Website visibility, such as Google PageRank, incoming links, a few keyword search results • If available, summary information from Google Analytics or other third party web tracking software • Other online advertising and offline promotion of the url • Conclusion on How the AdWords Campaign Aligns with the Client's Business (2 points)
  66. 66. Proposed AdWords Strategy (13 points, about two pages including sample AdWords ads and keywords) Based on an analysis of the client, its website and marketing, each team should craft an appropriate AdWords Strategy and metrics for their campaign. The proposed strategy should include: • Number of Ad Groups and the focus for each Ad Group • Keywords and negative keywords • Text for at least two AdWords versions for an ad group • Daily and weekly plans for spending their campaign budget • Network(s) for their AdWords ads • Target audience settings • Ad serving options • Keyword bidding • Geo-targeting • Goals for impressions, clicks, CPC and CTR • Proposed success metrics • Other relevant information
  67. 67. Post-Campaign Report (Judged on a total of 70 points) The Post-Campaign Report has five components: • Executive Summary (8 points) • Industry Component (28 points) • Learning Component (14 points) • Communication and Readability (10 points) • Relevant use of Tables, Figures and Charts (10 points) Your post-campaign report will most important document for grading of your project success (25% of your final grade)
  68. 68. Formatting Requirements All reports should use the following formatting: 12-point Times font, 2.54cm page margins, A4 paper, leftjustification, 1.5 line spacing. A4 paper is a standard paper size, in the 'Page Layout' section of most word processing programs. Reports that exceed the page limit or ignore the formatting guidelines will be disqualified. Do not include cover pages, title pages, or table of contents with your reports. Similarly, do not include information that shows your team members' names or institutional affiliation (e.g., college, university). Report Length and Language Options • Pre-Campaign Report can be a maximum of four pages • Post-Campaign Report can be a maximum eight pages
  69. 69. Personas exercise Sit down with a group of your team and/or clients and ask "who do we want to attract to our website?" Brainstorming will give you a few personas to start with, then as you develop those personas you will realize that what you thought was one target segment is in fact two or three, and start to develop new ones entirely. It is good to think about personas first because that means that all design, content, and strategy is user-centric.
  70. 70. Research: team + statistics TEAM: • Experts on this audience. • Anyone working with these personas on a daily basis: Salespeople, teachers, trainers, bosses, installers, tech support, etc.. • Writers who write documentation or marketing copy for these personas. STATISTICS: • Social media: What do folks on Facebook, in the blogging world, etc. say about this brand, type of product or service? Don’t take the first post as gospel – make sure you research. • Quantcast (free): What are the demographics of people visiting similar sites? • Keyword data from Adwords (free), Yahoo (free), KeywordDiscovery,WordTracker. The phrases people use are a great peek in their heads. • Current site statistics, if you have them. • Industry-wide site stats (Hitwise and NetRatings) if you can afford it. • Geographic segmentation: Prizm (free).
  71. 71. Who they are, every day: Demographics 1. 2. 3. Where do they live? What’s the climate like there? Typical stuff: Age group, children, married/single, salary, job, home ownership, ethnicity, education, nationality. 4. What group might they belong to? What’s their status within that group? Are they influencers? On the fringes? By ‘group’, I mean something like ‘cyclists’, ‘travelers’, ‘skiers’ or ‘people who like to cook’. 5. What’s their lifestyle? 6. Any special interests? Party affiliations, etc.? 7. Any accessibility issues? 8. Are they internet novices? Experts? 9. What kind of gadgets do they have? 10. What’s their reading level? 11. Would this user be comfortable using a chat program? E-mail? A web-based form? Or only on the phone?
  72. 72. What they want, all the time: Emotional 1. What’s their self-image? 2. Personality? 3. What are this person’s beliefs? This isn’t about religion, necessarily. 4. Where would they fit in a typical personality test? 5. What are their day-to-day goals? Survival? Fun? Family? Something else?
  73. 73. How they interact with you and your competitors: Relationship 1. Has this person used this kind of product/service before? 2. Do they know much about it? 3. When do they use this product or service, or otherwise take action? 4. What’s their role in this interaction? Decision maker? Researcher? Something else? 5. What’s the environment in which they’ll use this web page? At home? Surrounded by co-workers? Barking dogs?… 6. How do they feel about it? Is this a product the get excited about? Or is it a necessary evil?
  74. 74. What might make this interaction happen/not happen: The Pitch 1. What’s their goal in buying the product or service, or otherwise taking action? Think of the big and little picture here. 2. During this interaction, should they feel adventurous? Secure? Confident? Luxurious? Powerful? Independent? Peaceful? 3. What makes this interaction fun? Memborable? Maddening? 4. How important is confidentiality? 5. How much is trust an issue? 6. What frustrates them about this product or service? 7. What will make feel they’ve received value?
  75. 75. How they may affect your organization: Impact 1. What effect is this person likely to have on the business? Help? Hurt? Earn money? Cost money? A long-term customer? 2. How often will they come back and use this product, service or interaction? 3. Will you enjoy working with this person?
  76. 76. At the end of the exercise one page description of your business personas should be provided to me + picture and name of persona
  77. 77. Steps for doing competitive market research 1. 2. 3. 4. 5. We evaluate the product or services’ functional benefits and then ask ourselves “what else is out there”? Google around for various search terms and make a list of who comes up on the first page. The famous SWOT analysis method can be helpful for evaluating internal and external market opportunities. Competitive audit for the industry and identify the market leaders. Knowing these players, we can use our local university or public library databases and Google to research things like yearly revenue, sales growth, and possible distribution channels. If the company is publicly traded, SEC filings can be helpful depending on the granularity of the filing. Evaluate what our competitors’ brand experience is like. We would begin listening on Twitter and Google Alerts. Scouring Facebook for brand mentions and reviewing their fan pages for engagement and content. Scanning our competitors’ blogs for comments and how the company interacts and treats its users is another opportunity to learn. Evaluate the customer buying experience funnel. This would include everything from search results to their ecommerce or in-store experience. We would be looking for ways to enhance the experience from first point of contact all the way to checkout either online or in a store. Constantly asking ourselves, “Where can we make this better? More remarkable? More valuable in exchange for their time?” If it’s a product company we are marketing, we can read over the user reviews on sites like Amazon. These offer tremendous clues on what works and what doesn’t in the entire brand experience. If it’s a service based company check out Google Reviews or Yelp! for customer feedback.
  78. 78. Assignment If you haven’t done it already, the first step is to lay out your user persona in a printed format. You should have a picture, name, and all the other data front and center in a narrative format make sure you’ve cross-referenced it for social media engagement. Preparation for keyword brainstorming
  79. 79. After brainstorming • The “Affliction vs. Aspiration” whiteboard exercise helps us get creative around potential topics for content. This is the art part of our search marketing efforts. Now, we will apply some science using some free tools from Google for collecting real data. • At this point, our goal is to try and understand to the best of our ability the ways people will search for our product or service. • Tools: Google keywords, Google trends,
  80. 80. • Becky busy gridline • LlM 15:20
  81. 81. Research on first impressions • arch/how-to-do-brand-first-impressionsresearch-for-digital/