What is... And is Not... Segmentation?

Transcription

1 What is... And is Not... Segmentation? American Zoo and Aquarium Association Annual Meeting Chicago, Illinois September 16, 2005 Mark Rudzinski Managing Director Aeffect, Inc. 520 Lake Cook Road, Suite 100 Deerfield, IL

2 Presentation Overview I. Working Definition of Segmentation II. Segmentation: A Brief History III. Why Should You Segment Your Audience? IV. Methods of Segmentation Page 2

3 Working Definition of Segmentation What is Segmentation? Segmentation... is a methodical, information-based approach to identifying key audience groups that share critical characteristics. is based on the idea that not all people are the same. They have different wants, needs and lifestyles and respond to different communications techniques. takes into account many factors that contribute to decisionmaking, including demographics, lifestyles, values, attitudes, behaviors, motivations and barriers. provides basis for categorizing your audience so that you can make the best decisions about how to serve them. Page 3

4 Overview of Segmentation What is Segmentation? Segment D Segment A Segment B Segment C Undifferentiated whole Differentiated insight Page 4

5 Segmentation: A Brief History History of Segmentation (or Back to the Future) Turn of the century (20th, that is): Nation of shopkeepers: one to one relationship with customers Service, knowledge critical to maintaining relationships 1920s s: Mass production, low cost/low margin: profitability = high volume Loss of personal relationship with customer, emergence of fragmented media (radio) introduces demographic segmentation 1960s s: Increasingly demanding consumer population, higher expectations regarding services and product customization ( niche marketing ) Increased computing power provides ready access to tools that allow more sophisticated value/lifestyle and database segmentation 1990s - present: Database segmentation and marketing, increasingly segmented communications (satellite TV, web) usher in new era of one to one relationships, this time driven by technology rather than people Page 5

6 Why Should You Segment Your Audience? Segmentation can help organizations make better use of limited funds to efficiently and more precisely target its offerings to the different segments that comprise its audience. One size does not fit all or even most Effectiveness demands specific focus and relevance to drive an audience s action and involvement Audience s frame of reference is more than just museums, zoos and aquariums: Other entertainment/leisure time pursuits are already very sophisticated in terms of building their communications and brand experience around the needs of specific market segments Drives higher set of expectations Page 6

7 Why Should You Segment Your Audience? It can inform decisions about... Developing Your Visitor/Audience Base targeted marketing message strategy member/donor growth Evolving Your Brand Experience programmatic development exhibit planning and execution visitor satisfaction mission achievement Page 7

8 How do you segment your audience? Zoos and aquariums already engage in many forms of segmentation: Most are prospective, in that the organization decides what makes visitors different and then measures or analyzes data by those characteristics Often based on convenient data and descriptions (e.g. visitors vs. non-visitors, locals vs. tourists, families vs. couples) Unlikely to provide depth of insight needed to guide strategic communications and program planning BUT: still represent an entry level opportunity to develop a more refined understanding of audience groupings Page 8

9 How do you segment your audience? Optimally, segmentation is built on the qualities and characteristics that your market determines to be important and differentiating: Organizations cannot determine these prospectively Must be based on consumers frame of reference regarding your offering and the values and attitudes they have toward you and the other competitors in that set Page 9

10 How do you segment your audience? Optimally, segmentation typically is built off of attitudinal and behavioral data Attitudes/Values attitudes toward your brand attitudes toward competitive brands benefits sought from utilization personal interests preferences purchase habits Behaviors usage patterns spending patterns membership/donor status Page 10

11 How do you segment your audience? Other commonly collected data (demographics, geography, share of mind) are typically used for profiling segments: Demographics age education gender presence of children ethnicity SES Geography urban/suburban/rural zip local/tourist Page 11

12 How do you segment your audience? Three questions for determining approach to segmentation: What are your organization s priorities for engaging in segmentation? How are you defining your target audience? What is your target s frame of reference regarding your offering? Page 12

13 How do you segment your audience? What are your organization s priorities for engaging in segmentation? Understanding what drives visitation? Understanding how to maximize revenue? Understanding prevalence of learning styles? Other? Organizational priority will help to determine prospective bases of segmentation to pursue Page 13

14 How do you segment your audience? How are you defining your target audience? Actual visitors? Prospective visitors? General population, i.e. the market? Other? Visitors are unlikely to be representative of the market Building segmentation on visitor data alone will likely result in a skewed sense of market attitudes toward your institution Your Visitors Segment D Segment C Segment A Segment B Your Market Segment D Segment C Segment A Segment B Page 14

15 How do you segment your audience? What is your target s frame of reference regarding your offering? Are you a destination requiring advance planning and financial commitment or are you more of an activity? Who are your competitors? What does the market consider as alternatives to a visit/encounter with your brand? This must be based on market insight, not visitor insight or internal conjecture. Page 15

16 How do you segment your audience? What are some of the widely used methodological approaches to segmenting a market? Qualitative segmentation Demographic/geodemographic Behavioral Attitudinal or psychographic Combination of approaches Page 16

17 Methods: Qualitative Segmentation Based on understanding of audience through insight gained from qualitative techniques--focus groups, in-depth interviews, dyads, triads, ethnography Requires primary data collection effort Low to moderate cost depending on use of outside services and audiences included in the study Page 17

18 Methods: Demographic and Geodemographic Based on understanding of audience through U.S. Census data or through syndicated marketing information applications such as Claritas PRISM. Census data: wide variety of information at county, MSA PRISM: Syndicated clustering system based on geography, age and SES Nearly all U.S. households can be clustered into one of 64 PRISM clusters, i.e. Blue Blood Estates, Kids and Cul-de-Sacs, Bohemian Mix Can apply cluster code to a data record if ZIP Code (ideally street address + ZIP Code) is available $75/1,000 records with $500 minimum order; additional data can be purchased by PRISM code level Page 18

19 Methods: Behavioral Gaining audience insight through analysis of behavior data gathered on visitors; also known as data mining: Substantial potential to extract rich insight on your visitors, from diverse sources such as: traditional visitor studies, revenue data; membership data; donor data Primarily utilizes existing data that your institution is collecting for other purposes; however, can marry this data to PRISM to append additional descriptive data and understand how different PRISM categories relate to your visitor experience Page 19

20 Methods: Attitudinal or Psychographic Gaining audience insight through measurement of various values, attitudes, knowledge and beliefs about your institution and its competitors Requires extensive primary data collection effort either among visitors, or optimally, among the general population; also requires access to resources that can do multivariate statistical analysis Requires fairly significant insight into target audience in order to ensure that the questions being asked will yield a relevant and actionable segmentation Page 20

21 Overview of Segmentation Summary of Approaches Qualitative Geodemographic Behavioral Psychographic Combined approach DEFINITION In-depth, non-quantitative insight multivariate Census data visitation, volume of use, etc. attitudes, values, etc. All of the above METHODS Focus groups, IDIs, dyads, triads, ethnography US Census PRISM, ACORN internal data visitor & market data visitor & market data BENEFITS Helps to understand the why? Rational, emotional benefits, values market description at household type level rich insight into visitor activity, but not attitudes or decision-making reveals visitor & non-visitor attitudes, perceptions, values, decision-making marries attitudes, behaviors & demos to yield actionable audience segments LIMITATIONS Not quantified, highly subjective, requires skilled interviewers expensive to acquire additional data, no museum category insight, not institution-specific requires sophisticated info. sys. to mine, analyze & model requires more sophisticated data collection, may not be actionable if based only on attitudes requires sophisticated data collection & analysis Page 21

22 For more information, please contact: Mark Rudzinski Managing Director Aeffect, Inc Page 22