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This is one of a series of posts about a real-life attitudinal audience segmentation project.  See other posts in this series.

One of the biggest challenges I find companies have with market research is how to make it actionable.  The fact is, you can have a lot of great data about your customers and prospects and what they want, but many organizations don’t really know how to use it in their day-to-day operations without completely turning their business upside down.

Actually, this is one of the main reasons I believe in marketers learning to do market research.  Without the insight of a marketer before, during and after the actual analysis, companies are often left with great information that no one — not they and not their often very capable research providers — can figure out how to use.

Any researcher will tell you that there are always options in terms of how much detail you seek in a research project — they call it the “level of granularity”.  In no case is this more evident than in audience segmentation work.  The fact is, the math doesn’t care — it can differentiate your audiences into 3 segments, or 30 — and, depending on how many respondents you have, even that many can offer statistically significant insights.

The problem is, there aren’t many organizations that can adapt their marketing and operations to 30 different segments.  At the same time, only looking at two or three probably doesn’t offer much in the way of insight that will actually make a difference in people’s purchase decisions.

The spectrum of “how far do we go with this” is wide indeed.  I have had clients who invested a great deal of time and money to gain incredible insights into the desires and motivations of their audiences — and then continued to run advertising creative that the research had proven was motivating to none of them.  Meanwhile, at the other end of the spectrum, organizations like Best Buy have spent millions of dollars to completely revamp store interiors and train their personnel to identify and cater to different segments.

In truth, most organizations should probably start somewhere in the middle — especially if it’s the first time they’ve really thought about dividing up their messaging to different audiences.  But there are many impactful changes that can be made that won’t require a raze and rebuild on your company:

1)  Email segmentation

The nice thing about an audience segmentation survey is that you will know virtually every respondent’s segment when you’re done.  Assuming you’ve asked for (and been granted) the approval to email them about your company, product or service (something you can incorporate into the segmentation survey design), you have a beautifully segmented email list just waiting for some targeted messaging.

Once you know what your segments are, it can be fairly straightforward to ask your incoming email registrants which one best fits them.  While this isn’t as sophisticated as running everybody through a full segmentation analysis, it’s a lot more practical.  And in my experience customers are happy to tell you which shoe fits if you let them know it will lead to more relevant messages and offers.

Segmenting your email messaging can be as simple as setting up a few different versions of your standard email communications, ensuring that all of them contain the universal “umbrella” messages that appeal to all segments and adding a space on your template for segment-specific information — a recent case study that will resonate with their segment in particular, or a special offer based on their interests and priorities.  You might also consider adding emails that are only sent to certain segments about news that will be relevant to them — a new product introduction, an article they might find interesting or company news that would resonate with them.  If you have customers who like spicy food and some who don’t, the fact that you won the state salsa competition is great for the former, but not something you’d necessarily want the latter to receive.

2)  Website content

My friend Jason Baer of Convince & Convert argues effectively in this post for the value of the two-click rule: ensure that your site visitors can find the content they want within two clicks.

Of course, this is tough to do if your website is set up under the assumption that all of your visitors are interested in everything about your organization and its products or services.  Inevitably customers looking for something that speaks to their needs is going to be buried in content that tries to speak to somebody else’s needs, too — especially if your site navigation has generic tabs such as “Products” and “FAQ’s”.

Imagine the power of having your spice-loving audience arrive at your website to find a tab named “Love It Hot?”.  What if your B-to-B prospect sees something called “Realtor Tools”?  One of my clients, a tourist destination, reorganized their site to provide a section for those visitors interested in relaxing spa weekends, vs. a section for those seeking outdoor activities (which features a large weather widget front and center).

And, of course, understanding how your customers use your products, and what need they fulfill, is a huge benefit when crafting copy that is optimized for search engines.  Inevitably clients discover new topics they can use to improve their search rankings in key areas and generate new visitors.

3)  Traditional Media

Like digital marketing, traditional marketing works better if it’s relevant.  Items such as brochures, advertisements, direct mail and other traditional media can benefit from the insights of segmentation in many of the same ways that digital media can.  In the case of SCU, they were preparing to redevelop new collateral pieces when they began the segmentation research project; its completion provided them with specific guidelines regarding the types of different audiences that needed information, the kind of information they would be looking for and the messages that would be most relevant and compelling to them.  The insight allowed them to eliminate some pieces they had planned, consolidate some efforts, and develop new recruiting tools to reach the groups they most wanted to reach.

4)  Social Media

Social media is particularly well-suited to helping people find information that matches their interests.  Ensuring that your key prospects can find you through social media requires that your SM content is relevant to them.  And the wonderful thing about SM is that you can set up multiple touchpoints so that each of your audiences can get the information they want, without having to sort through a bunch of information they don’t.  Segmentation shows you who your audiences are, what’s important to them and the kinds of questions they want answered about your product or service and your brand.  Who says you should only have one Twitter feed?  Or one Facebook Fan page?  There are successful companies out there doing amazing things with segmented social media profiles to help their audiences get just the information they want to hear.  Take one of my favorites, ThinkGeek:  Want to join in their super-geeky celebration of geek culture?  Follow their @thinkgeek Twitter feed for “Today In Geek History” and other entertaining tidbits.  Rather get their new product announcements and promotions?  Follow their @thinkgeekspam account.  Want both?  Perfect!  There couldn’t be a better roadmap than segmentation research for understanding where to reach out to each of your audience types and what kind of content to offer them.

5)  Customer Service

Customer service is one area that’s often overlooked when considering how your segmentation insights can help your company connect with your customers.  When a customer or prospect contacts your organization, you have one more opportunity to build your relationship with them — or break it.  If you add segment information to your customer database and can access it when a customer calls, terrific.  If you don’t have a caller’s segment information it can be a matter of a few short questions to quickly identify their likely segment and ensure that their concern, information request or other issue is handled as effectively as possible.

6)  Branding

The fact is, YOU don’t decide what your brand represents — the marketplace does.  Your brand identity is an amalgamation of customer opinions, prospect assessments, former customer complaints, competitor messages and your own marketing efforts.  Understanding how your customers and prospects see your product or service offering, against whom they measure you, and where they find your greatest strengths is terrific fodder for looking at your own branding efforts.  The simple fact is, you can’t MAKE your brand anything — you have to convince the market that you deliver on your promises in order to gain brand recognition for a particular feature or benefit.  Understanding how your key audiences feel about your brand can help you understand the kind of changes you need to make to your product or messaging to move that brand identity in the direction you want it to go.

I had a client whose segmentation research showed that their prospects believed they could buy comparable products at major big-box discounts stores.  This was particularly upsetting given that my client’s products were of a far superior quality and a great deal more expensive.  While his first instinct was to complain that people were idiots and discard the insight as ridiculous, he came to understand that, like it or not, the perception was out there among his key target groups.  He had three options:  1)  Abandon the audience completely, assuming that they were too “cheap” to buy his product; 2)  Significantly discount his product to reach the same price range as those competitive products; or 3)  Help the audience understand the significant (and real) difference between his products and those they were comparing it to.  Since the research clearly showed that the target audience wasn’t price-focused but quality-focused, he knew that there was an opportunity to make his case and convince them his product was worth the money.  They just didn’t have the information they needed to understand how his product was a better choice for them.  In the end, he was able to effectively message to and convert these prospects and drive new revenue without forfeiting his brand’s luxury positioning and price.

These are just a few of the options for making segmentation insights actionable in your organization.  In reality, well-executed and well-communicated segmentation data can touch all aspects of your organization and help build your relationships with your customers and prospects in every way you contact them.

Do you have questions about how to improve your customer relationships, about attitudinal segmentation or whether it might make sense for your company?  Let me know in the comments and I’ll do my best to answer them!

This is one of a series of posts about a real-life attitudinal audience segmentation project.  See other posts in this series.

Source: BusinessWeek

Now we get to the fun part.  They survey’s been fielded and the data’s in — now it’s time to get the stats involved and see what segments the data gives us.

This is the part where clients get nervous — especially when they’ve got previous research that has led them to believe they’ve got a handle on their segments.  Some have even suggested that we start with existing segment assumptions and use the data to gain more insight on them.

The problem is, that’s not segmentation — that’s profiling.  And they’re very different.

There are many approaches to looking at your target population.  You can use demographics to group people by gender, or age, or lifestage, or household income.  You can group them by the products they buy from you, or those they buy from someone else.

But attitudinal segmentation groups people on how they FEEL about things — which can have little or no correlation to any of those items.  Most of us don’t buy something PRIMARILY because of how much money we make, or where we live.  Many of us buy the same products as our neighbors or co-workers, although our demographics may be very different.

So if you start an attitudinal segmentation project by pre-establishing demographic or other bases for the segments, you’re missing the point.  If you do that then all the work that follows will provide you great insight into the groups you’ve established — but you may completely miss the underpinning reasons that people choose your product or category.

Some statistical approaches to segmentation have the same issue — they may require that you identify a “seed” in the data upon which to base the analysis.  Pick a different seed, get a different picture.

Factor analysis, on the other hand, takes all your data and allows respondents to sort of “clump” together based on the answers they’ve given you to attitudinal questions — “how important is this?” or “how interested are you in this?”.  There’s simply no external decision-making getting into the middle of the process and mucking it up.

So how does factor analysis work?

Well, first of all you determine which questions on the survey are going to form the basis of your analysis.  (In attitudinal segmentation, these will be the questions asking respondents’ opinions.)  All of the other questions, while not used for the factor analysis itself, will be used later to gain more insight into each of the segments once they’ve been established by the analysis.

Then you determine how many segments to shoot for.  This is based on a few considerations:

1)  Are you going to segment the entire respondent pool, or are you interested in determining the segments for predetermined groups (like customers vs. non-customers).  I’m a fan of the former — in part because of my issue with pre-segmenting, and also because segmenting everyone together ensures that you’ll identify any commonalities between the groups that you can later use to develop umbrella messaging and broad market strategies.

2)  How much data have you got?  There’s no point in having eight segments if they’re each too small to provide any statistical reliability.  I think it’s important to have confidence in this data for strategic planning, so if you have a small respondent pool to work with I prefer fewer, more reliable segments going with more segments that are less statistically viable.

3)  What are you going to do with the segments?  This becomes in part an issue of facing reality.  How sophisticated is the client — can they get their heads around the nuances between eight segments, or would they be better off with five segments that are more easily differentiated?  Are they really going to be able to follow through with marketing strategies and tactics for eight, or would defining their message for four audiences be a more achievable goal?  Again, my personal preference is to take the route of fewer segments with most clients, only because it’s their first time segmenting their marketing messaging and tactics in this way and I don’t want them to get overwhelmed — especially when they’re trying to communicate their audience segments to other departments within their organization and get everyone on the same page.  No matter which answer they choose, the segments won’t be wrong — but with more segments the differences between them become more granular.

For SCU the data revealed five clearly-defined, statistically significant segments from their current students, prospects and non-student respondents:

Segment 1:  Education-Focused. These respondents feel academic excellence is the most important aspect of choosing a school, and see elements like accreditation, faculty experience and graduation rate as key indicators of excellence.

Segment 2:  Location-Focused. This group is primarily looking for a good school that’s not far from home.  They are more likely to live near SCU and more likely to have friends and family that have attended the school.

Segment 3:  Experience-Focused. These respondents are primarily interested in experiencing traditional residential undergraduate college life.  They are more interested in issues like on-campus housing options and extracurricular programs, and actually prefer that a school NOT be close to their home.  Unlike the other segments, which included both undergrad and adult respondents, this segment was exclusively found among traditional undergraduate students and prospects.

Segment 4:  Career-Focused. This group wants a college that will help them advance in their chosen field.  A practical focus and career-skills development are more important to them than other groups, and they’re more like to be found among adult learners than among undergraduates.

Segment 5:  Faith-Focused. This segment is interesting in that it probably wouldn’t exist for a non-faith-based school.  These respondents are specifically interested in the ability of a school to support their practice of their faith, and a significant percentage of them list the growth of their relationship with Christ as a key reason for attending college.

Each respondent is assigned a number based on which segment they align with most closely.  (There’s always some gray area — some respondents will appear to straddle two main segments, in which case we will assign a primary and secondary segment to make future messaging decisions easier.)  Then, based on the respondents in each group, it’s a straightforward exercise to evaluate their responses to other items on the survey — demographics, purchase behavior, brand familiarity, etc. — and identify the additional elements which differentiate them from other groups, and those which all groups have in common.

Next: What We Can Do With All This Insight!

This is one of a series of posts about a real-life attitudinal audience segmentation project.  See other posts in this series.

Once the research plan detailing who you’re going to survey and what you need to ask them has been finalized, the next step is development of the survey itself.

Before I go further, let me stress how critical it is that you are careful in the design of your survey.  If you don’t know how to craft a survey, find someone who does.  Bad survey design doesn’t only irritate your respondents and fail to get you the information you need, but it can make you think you have good information when you don’t.  There are a lot of ways to introduce bias into your survey — even unintentionally — in what you ask, how you ask it, when you ask it and what options you give respondents for answering the questions you pose.

Your survey needs to be as short as possible to get what you want, as easy as possible for your respondents to understand and to fill out, and as well-organized as possible to make it easy for you to pull your data together afterwards.  And foremost of all, it needs to try to get the truth from your respondents, and not color their input with your own bias and expectations.

OK, enough of my “good survey/bad survey” soapbox.  Back to our project.

For the SCU initiative, the group had already agreed to include all relevant groups in one survey so that we could segment the entire data set together.  While this definitely has the benefit of allowing insight across all groups about relevant messaging and key motivations, it also means that they survey will be more complex than if a more homogeneous population is being questioned.

In this situation, we really had a matrix of groups based on three key considerations:

• Student Type: Traditional undergraduate, adult taking undergrad coursework, or adult taking graduate courses
• Status: Current student, prospective student who has applied, or simply “non-student”
• Location: On-campus student, online learner or student at one of the school’s offsite locations

Each of these characteristics brings a different set of available course options at the university, different degree opportunities, different housing options, and — most importantly — EXCLUDES OTHERS.  In order to avoid dragging respondents through a long list of questions or choices that don’t apply to them (which would frustrate people and drive down response rates), we had to map out a survey that would allow us to ask relevant questions based on some early response choices, and also to capture some data that would apply to everyone.

So how to lay out something so complex and ensure that you’re (a) minimizing the amount of time it will take a respondent to go through the survey, (b) keeping questions relevant and (c) not repeating yourself or creating multiple data fields with the same information from different respondents, that you’ll have to consolidate later?

For me, the answer is — MIND MAPPING SOFTWARE.

That’s right — those solutions designed to help you organize your thoughts can be incredibly valuable when trying to work through a complex survey flow, and have a number of other benefits that a simple document or online survey preview simply can’t provide.

Read more about how I use MindNode mind mapping software in this post.

Take a look at the complete map of the SCU survey:   SCU Survey Mind Map

Benefit 1:  Flexibility

My favorite thing about this approach is that mind maps are eminently flexible.  If you need to add a node, just do it — you don’t have to reformat the whole thing.  If you need to move something or connect it to another path, it’s a matter of a few clicks and drags.

Benefit 2:  More Than One Path

As you can see from the map, the SCU survey required a number of branches based on responses from each survey taker — and then required that those branches converge for other questions.  Mind-mapping software can do what an outline or online survey printout can’t — help you work through what branches need to diverge, and when, and where they need to go after that.

Benefit 3: Visual Flow

I’m a visual thinker.  So a mind map allows me to follow the flow of a respondent’s flow through the survey in a visual way — and if you’ve ever tried to follow skip logic in a word-processing outline, or figure it out from a printout of your survey in online services, you’ll know just what an amazing and rare gift this is for the survey designer.

Benefit 4: Clarity For The Client

Most of my clients don’t design surveys for a living, and a complex document full of skip logic instructions can be so daunting that it completely destroys any chance they have of ensuring that the survey makes sense and covers what they want to cover.  Often they know more about their audiences than I do, and having them weigh in on language, specific items for specific groups and other elements is critical.  This format also illuminates things we’ve missed and can add it.  Working out the kinks at this stage is incredibly helpful, because it takes far less time than working them out once a survey has been programmed online.  Especially when there’s a complex dance of respondent types, special questions, and different areas of inquiry this opportunity is a huge time-saver.

Benefit 5:  Clarity For Me

When it comes time to actually program the survey itself, I now have an approved flow to follow.  And ensuring that skip logic is set up properly is also easy, because it’s shown right on the map.  After the survey is programmed I go back to the map and add the question numbers to each node on the map so I can easily find the item on the survey if I need to tweak something.

Next:  Data, data, data!  How we look at what we’ve got.

This is one of a series of posts about a real-life attitudinal audience segmentation project.  See other posts in this series.

This project was undertaken for a small faith-based university in the midwest (I’ll call them “SCU” – Small Christian U – for the purposes of this discussion).  The university offers undergraduate, graduate, adult professional and online programs.  They have been working with Higher Ed Growth to develop targeted, relevant strategies for lead generation, and the strategic big brains at Monsoon Strategy came on board as well to conduct an audit of their existing marketing activity.  Both were helping SCU determine how they could better identify, reach and engage with their target audiences – and do it economically.

During stakeholder interviews at the university, it became apparent that there was a lot of internal debate about how best to message to prospective students – adults, undergrads, graduates and online learners.  There were differing opinions about what those messages should be, and where they should be communicated.  With such a diverse audience, it was key to understand which messages were most relevant to develop better marketing and avoid wasting advertising dollars.  The folks at Higher Ed Growth and Monsoon were familiar with my work and called me in to consult with the client.

I immediately liked that this client was actively implementing tools that could make the most out of segmentation.  Their website was fairly robust, but they expressed an interest in adapting content to specific segments to make it more useful to them.  They were preparing to develop a wide range of new collateral materials for potential students, and were in the process of implementing a new CRM system that would allow them to extend their current database to include all sorts of prospect-specific information — including audience segment, communication preferences, and areas of interest.  After just a few minutes on the phone with them I knew they were a terrific candidate for attitudinal audience segmentation.

A key issue was the scope of the research.  While the university was primarily interested in learning about their adult prospects (both at their offsite locations as well as in their online program), many of their potential communication channels would necessarily reach potential undergraduate students as well.  It seemed important to identify the needs of adult learners, but also to determine how they differed — or didn’t — from undergraduates.  And I was interested in finding out the characteristics of their current students. so that we could compare them to those of the students in their prospect database.

One of the most valuable aspects of segmentation research is that, in identifying how messaging needs to differ between segments, it also reveals which messages are powerful for ALL audiences.  This information is extremely valuable in crafting umbrella messages that the brand can use in any and all venues, media and materials and ensure that relevance remains intact.  In order to determine the best umbrella messaging for SCU as part of this project, it became clear that we would need to include adults, undergraduates, prospects and current students in the study.

Next:  Survey development — and how a very complicated survey was made easier with the help of some creative tools.

This is one of a series of posts about a real-life attitudinal audience segmentation project.  See other posts in this series.

I’m a marketing strategist.  I’ve spent the last 25 years (gack!) learning (and then helping other organizations learn) how to get the right message to the right people in order to get those people to do something — consider, visit, tell a friend, buy, or buy again.

I have always been frustrated when faced with the challenge of developing marketing strategy without data.  Despite my liberal arts education, number-crunching is near and dear to my heart, and I have seen many organizations try to develop effective marketing campaigns with nothing but their own suppositions to go on.

So I decided to incorporate fact-based decision-making into my marketing strategy whenever possible.  And today I conduct attitudinal audience segmentation research — gaining quantitative insights into why people (or companies) make the choices they do — solely to give organizations some hard data to go on.

Of course, one of the downsides of research is that it’s proprietary.  Unlike a website development project, where the general public can see the finished product, research is information that organizations typically like to keep to themselves.  And unfortunately, this typically means I can’t show off the kind of information this segmentation research provides.

However, thanks to a willing client and co-consultants, I can now take you through a real-life audience segmentation initiative, step by step — from objectives, to survey development, to analysis and results and client presentations.  I’ll be walking through the project in a series of blog posts over the next few weeks.  I hope you find it interesting, and please let me know if you have any questions I can answer as we go along.

I am amazed at how many companies have fallen into the habit of regularly insulting their customers.

If I pointed them out, I GUARANTEE that each and every one of them would strenuously object to this accusation, claiming (and, in all likelihood, truly believing) that each and every customer they have is of the utmost value to them and that they work very hard to ensure they’re doing the best to serve them every day.

And I’m sure they do.  But unfortunately, many companies torpedo their own efforts to connect with their customers by insulting them — every day, every week, every time they have contact.

Insult #1:  Treat your customers as if you understand them, when you don’t.

Trust me — if you’re sitting around the boardroom deciding who your customers are and what’s important to them, you’re wrong.  We who own and operate our own companies are even LESS likely than the average man-on-the-street to get this right, because we are so involved with our own product or service that we use language our customers won’t understand, see benefits they won’t see, and overlook shortcomings that will be glaring to anybody outside the company.  The fact is, some of your best customers are going to be people you’d never expect, with reasons for buying your product that you’d never imagine.

Insult #2: Treat your customers as if they’re all the same.

It cracks me up to hear companies talk about “their audience.”  Well, I do audience research, and I’ll tell you what — you DON’T HAVE ONE AUDIENCE.  You have many.  (In reality, you have as many as you have individual customers and prospects).  But even if you aggregate folks together based on WHY they buy what they do (called attitudinal audience segmentation), you still are going to be left with some very disparate groups — each of which buys what you sell, but for very different reasons.

Yet if you offer your customers and prospects ONE email message, ONE website experience, ONE promotion, you are treating them as if they all care about the same thing — and they don’t, I guarantee it.  And what’s more, they can spot a marketing message that’s off-target for them in the blink of an eye.  And before you know it, your email’s in the trash and they’re off to another site.  Worse, if your messaging isn’t relevant, some likely prospects won’t find you in the first place — because chances are the search terms you’re using for your SEO efforts don’t cover what they’re seeking.  (If your SEO is based on “aromatherapy candles” and they’re looking for “brown candles” you’re missing the boat.)

Insult #3:  Try to sell them something they won’t want — when you should know better.

Consumers (and businesses) can be pretty forgiving when they’re working with a new company that doesn’t know them yet.  They’ll answer questions about what they’re looking for, explain the problem they’re trying to solve, and share their hopes for how a company like yours might be just what they need.

But once a customer or prospect has spent some time developing a relationship with you — shopping in your stores or on your site, ordering from your catalog, commenting on your blog, engaging with you on Twitter — they expect you to remember them.

I have shopped with Williams-Sonoma for years.  I have ordered from their catalog, shopped online, bought in-store and even taken their cooking classes.  One day last year I received an email from them solely addressing the incredible nature of their new baby food cooking gadget.

Now, my kids are 9 and 14.  OK, so I guess I can’t expect Williams-Sonoma to know that (and would probably be kind of creeped out if they did).

But I have NEVER purchased a SINGLE BABY ITEM from them.  I don’t subscribe to any parenting magazines, get any baby catalogs, or have a membership card for Babies-R-Us  (all things they and other retailers can readily find out about any of us).

So not only did Williams-Sonoma fail to sell me a baby food cooker, they chipped away at what I had taken for granted was a mutually adoring relationship.  They must know me and love me, I’m a core multichannel customer.  Well, guess not.

Insult #4:  Sell yourself short.

I find customers to be very willing to offer up suggestions, criticisms, and any other information that will help their favorite brands and companies do a better job in meeting their needs.

Unfortunately many companies either don’t listen to customer feedback or, equally as bad, are afraid to ask in the first place.  It’s not unusual for me to hear from a prospective research client that they don’t want to ask for suggestions, because then people will get irritated when the company doesn’t follow every one.

Guess what?  YOU CAN LEARN SOMETHING FROM YOUR CUSTOMERS.  I guarantee that you’ll get a suggestion or two that can really make you better — but you have to start by recognizing that you’re not perfect now.

This is harder for some companies than for others.  Especially companies that have been doing things a certain way for a long time and are very successful find this a challenging realization.

In my experience, just asking your customers can go a long way to building a bridge between you and the people (or companies) who might consider buying what you have to sell.  And, if you actually share what you learned and what you’re doing to improve, it can dramatically reshape your customers’ perspective regarding the kind of company you really are.

Domino’s is making a big splash right now with their campaign that admits, loudly, that their customers think their pizza sucks.  It’s clear from the campaign that they’re not just changing their marketing, they’re changing EVERYTHING — their recipes, their operational focus, and their opinion about what’s really important to their customers.  And my guess is that they’ll gain huge points with customers and prospects just for admitting that they’re not all-knowing and all-seeing, but instead a company that WOKE UP when they bothered to ask some questions and got slammed.

Now certainly there will be customers who don’t get exactly what they want from you.  But guess what?  There will always be people out there for whom your company, product or service isn’t a good fit.  The better you can understand and communicate what you do well, and the type of buyer who is most likely to find that valuable, the more likely it is that those consumers won’t become sucked in by false promises and then get disappointed.

Results — Not Insults

Understanding your customers better will help you communicate in a more relevant way with them, help them find you more easily, and help them want to engage with you over the long term. (More on being relevant and making your business memorable in this slideshow.)

If you’re not doing this now, give it a try:

• Ask your customers what’s important to them.  Do it yourself, have a friend help or get a professional.  Ask online, in-store, in social media — wherever you engage with customers and prospects.  Let them respond anonymously and they’re more likely to tell you the truth.
• Think about ideas that might be valuable for each of your key audience groups.  Got folks who like how your product smells?  Scent your catalog or your business cards.  Got some who want to gift your product?  Add gift wrapping or incorporate a reminder service on your site, or do a post on how to tie the perfect bow.
• Try segmenting your email messaging.  If you know a business prospect is in a particular industry, offer up an example of your experience in that industry in particular — or pass along an interesting article that you think might interest them.
• If you’re not collecting data on your customer transactions, START NOW.  Anything you can capture — promotional codes used, products purchased, whether they get your newsletter — can be used to understand them better (even if you haven’t figured out how to do that yet).

How might you be insulting your customers without realizing it?  What could you do better?

USA TODAY has a fascinating article today about a new USA TODAY/Gallup Poll looking at the President’s approval rating and how he’s faring in public opinion.

AMAZING!  It’s attitudinal audience segmentation for the President of the United States!

I’ve conducted audience segmentation for big companies, small companies, business-to-business, business-to-consumer, government and even a faith-based university.  I’ve seen it offer incredible insight into why people — or companies — make the purchasing decisions they do.  But have to admit I never imagined I’d see it applied to the President.

Image credit

So the article, which profiles each of the four segments, never uses the term “audience segmentation”.  So how can we tell that’s what they’re doing?

Here’s the telling statement:  ”Analysis of polling data has sorted Americans into five groups of like-minded people in attitudes toward the President.”

This is the classic definition of attitudinal segmentation — literally, sorting people into groups based on their attitudes about something instead of by a specific purchase behavior.  Typically we’re finding out why business or consumers have made a particular decision to purchase, become a member, enroll, etc. — and for the President, that purchase decision is reflected in his approval rating (an indicator of voting behavior).

In addition, the article reveals that “Whether Americans believe Obama shares their values turns out to be a key factor in rating him.”  It’s not about whether you’re male or female, or how much money you make.  It’s about what’s important in a President COMBINED with whether you feel he shares your values.  Again, these are WHY questions, not WHAT questions.

So politics aside, I’m just tickled pink to see the type of work I do applied to such a fascinating topic.  I’m sure the Obama team will be using this information to determine how best to respond to each of these groups in a relevant way.  But in the end, if the choice largely being made on the basis of shared values, there may be groups that the President must prioritize over others in order to be successful — just like any other business.

Do you find these segments interesting?  Can you imagine what the segments might look like for your business?

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I had an interesting experience last week when a client pulled me aside to make me aware that the company’s CRM guru was loudly expressing his concern that this “warm and fuzzy” attitudinal approach to audience segmentation couldn’t hold a candle to good, old-fashioned database analytics.

This isn’t the first time it’s happened.  I often run into database managers – especially in e-commerce organizations – who feel that basing segmentation on an analysis of who buys what, when, and response to which offers is the right way to drive up sales and drive down cost per sale.  There’s even a fair amount of debate on this topic in the industry, with the database folks haranguing the attitudinal folks for primacy in the marketing effectiveness world.

Honestly, it’s something I’ve never understood.  From where I stand, everything you can add to your knowledge of a customer’s (or prospect’s) motivations, red flags, and lack of self-control when it comes to purchase is  a beautiful thing.  Why settle for limiting your understanding to just what they do, or just what they want?  Go ahead, it’s the 21st century — take both!

The fact is, the more insight you have, the better.  And if you’re lucky enough to capture sophisticated data on your customer’s purchase patterns, email response, customer service contact and promotional triggers, all the better.  That information, combined with an understanding of attitudinal drivers — WHY people buy what they do, and what’s key to them in making their purchase decisions — can result in a highly successful driver for marketing messaging, product development and promotional strategy.

And because it doesn’t require a previous purchase history with your company (or even your category), attitudinal segmentation can offer additional insight into identifying prospects — who, based on the intersection of attitudinal segmentation and existing customer statistics, can be fairly reliably pegged as to future revenue promise.

So let’s stop bickering about which is better.  The reality is that far too few companies are reliably capturing comprehensive customer data, and even fewer are analyzing it to improve their relationships with those customers.  And this is particularly true of smaller firms that could most use the additional sales such relationships can bring.  THAT’S the battle we should be fighting.

Is your company doing all it can with customer data?

I am currently finishing up an audience segmentation project for a large multi-channel retailer.  As usual, we’re trying to identify the key motivations for their various customer groups.

I was surprised to hear from my client contact that, when pursuing such a project was discussed in a team meeting, one of the team members was actually reduced to tears.

Why?

Because she was afraid the research findings would result in the abandonment of some current customers — people she credits, rightfully, with helping the brand grow to where it is today.  She was sure that we’d pick the segments that seemed promising, steer the brand ship in their direction and never look back at the poor souls treading water in our wake.

It’s true that segmentation work seeks to identify the key differences between groups that help us understand them more individually.  Candle buyers can be Fragrance Lovers, Decorators or Gifters — Chamber of Commerce members can be Socializers, Movers & Shakers or Sellers.

But another fascinating result of attitudinal segmentation is that you get to see what everyone AGREES ON.  It’s like one of those optical illusions where you can see either a white vase or two profiles facing each other, depending on how you look at it.  Segmentation shows you where groups differ, but also where they don’t.

All Together Now

And why is this information valuable?  Well, for one thing, it can give you clear direction as to your brand’s umbrella messaging — those things that everyone should hear, know and believe about the brand.  These messages are relevant to all segments, while segment-specific messages can be left to one-to-one communications like email and unique landing pages.

And the segmentation process can also help you recognize that, in most cases, there’s no customer segment you’d jettison.  Our job as marketers is to nurture every customer we can — while admitting that, with a limited prospecting budget, we need to focus on bringing in more of those likely to be our most productive customers.

I hope to reassure the entire client-side team on my current project that segmentation is as useful in recognizing the shared motivations of their customers as it is in pointing out their differences.  And perhaps offer a tissue.

Gail Goodman, writing for Entrepreneur, makes a great point about how audience segmentation can transform your email marketing, making it more relevant, impactful and effective.

Unfortunately, I have to take issue with her recommendations about segmenting your audience in the section titled “Selecting Your Segments”:

“To be effective, most businesses need only two or three segments, and it’s a simple process to begin. Start by deciding how you want to segment your list. What are the most important distinctions you make when deciding how to present your products or services to prospects? There are many questions you may ask yourself: What industry are they in? How big are their companies? What are their ages and genders? How old are their children? Where do they live? Form your questions based on the variables that matter most to your business.”

“I’m The Decider”

I see this approach all the time as companies seek to develop their marketing messages:  “Let’s sit in this room and decide what our customers want.”  Guess what?  YOU’LL BE WRONG.

The fact is that even if you have sophisticated data about what your customers buy from you, and even if you have demographic data about how much money they make or how old they are or how many kids they have, you can’t tell just by looking which of those elements (if any) are relevant in their purchase decision-making.  And the likelihood is that you DON’T have that sophisticated data in the first place, which means you’re sitting around a conference table with a very small sample of people who work for the same organization you do, trying to put yourself in the place of the customers you serve.

Bad idea.

Look From the Outside In

The truth is, it’s doubtful you and the other people you work with will EVER know all the various reasons people buy your stuff, instead of somebody else’s.  And it’s a sure bet that you won’t be able to intuitively figure out which of these reason are really significant in defining groups of people that you can craft marketing messages for.  In virtually every audience segmentation initiative I’ve worked on, the demographics of consumers have had almost no impact on the eventual audience segments revealed by the research.  The fact is, unless you’re selling feminine products or baby food, the motivation for purchase is likely to be based more on personal interests — “I like my food really spicy” or “I don’t care how a candle looks, I care about how it smells” — which are not going to be revealed by the age or income of the consumers in question.

Often, too, we tend to have blinders on about other key aspects of purchase motivation simply because we work for the company doing the marketing.  I worked with a great firm that made and sold luxury items.  When the research revealed that their customers identified Target and Walmart as places where they could find other “luxury” items like my client’s, the firm’s management was quick to argue that the customers were simply wrong — the products sold at those meg-retailers simply couldn’t be compared to the company’s high-end items.

In fact, it was company management that was wrong.  Because, like it or not, customers make up their OWN MINDS about our competitive set — and everything else about our brands, products and services.  We’re much better off understanding our customers’ motivations and perceptions, and crafting marketing messages that address them — for example, explaining why our products are better than what they can buy at WalMart — than we will ever be by ignoring them.

Learn What Really Matters

The best thing you can do for your marketing efforts — and for your business — is to learn what really drives purchase among your customers through audience segmentation research.  Find out WHY they buy what they do, and what they’re interested in.  If you can, find out for each and every customer you have.  The worst mistake we can make is to assume we know.  And the easiest thing to do is simply ask, and listen to the answers.