Category Archives: Segmentation

Rethinking Assumptions

Left-Brain-vs.-Right-Brain1I recently had the opportunity to visit with a couple data marketing gurus: Sean Callahan, Senior Manager of Content at LinkedIn, and Eric Schnabel, Director of Facebook’s North America Creative Shop. They were here for Ole Miss for Data Day.

It’s fascinating to hear how their companies – and many others – are using data to segment, target and build relationships with customers. The idea of segmentation and targeting is nothing new of course, but the amount of information available and the sophisticated ways of using it has changed the landscape of marketing.

And it makes me think.

I’ve always believed there are really two sides of the marketing profession. There’s the “creative” side, which involves right-brain things like imagination, emotion and intuition. Creatives are passionate people who write, design, position brands, think outside the box….their work is colorful, poetic, subjective. Think of Don Draper on Mad Men: Find emotional appeals, trust your gut, pitch ideas, the hell with research.

Then there’s the “analytical” side, which focuses on left-brain things like information, facts, logic. Left-brainers are driven by data and numbers; they seek patterns, correlations and explanations. Their work is rational, objective. Research drives everything. Think of Sergeant Joe Friday on Dragnet: “Just the facts ma’am.” (To those under 50:  Dragnet is an old TV show.)

I’m oversimplifying it, but I truly believe the profession has long consisted of people who focus on either the creative or the analytical. You’re either a dreamer or a data geek. Either or. One or the other.

That’s the world I’ve grown up in. I tell my students to know what side of their brain dominates as they ponder careers.

But the landscape is changing. When I hear people like Sean and Eric talk about how creative teams dive into data, or how data professionals think creatively, it makes me realize my assumption about “sides” of the profession is antiquated. As an example, Eric mentioned that some Facebook campaigns now have more than a thousand different versions of one ad, because there are a thousand ways to segment an audience. Success means that everyone involved needs to understand both creative and data.

Technology makes it easier too. I remember when people working on creative had to go to data analysts and request information, but desktop tools now put many of the queries and tables just a click away for anyone.

I think people themselves will always tilt one direction or the other — creative or analytical — simply because of how our brains are wired. But the idea that someone only needs to deal with one side is wrong.  Successful marketers today must think in terms of both.


Leave a comment

Filed under Segmentation, Strategy

Marketing to Women

Bic now makes “Pens for Her.”  Lady pens.  I don’t know much about the product, but marketing is all about discovering and meeting needs, so I assume they’ve done their research.  People are already making snarky comments (check out the 5 star reviews on Amazon) but that’s to be expected I guess.

But it reminds me of another product especially for women that debuted (and died out) years ago.  It was the Dodge “Le Femme” automobile.  That’s right, a car built and marketed just for women in the mid 1950s.  Check out the pictures below.  The car was available only in a pinkish color, had a floral interior, and came with a matching raincoat, umbrella, purse, lipstick case and a few other very feminine accessories.  Men ran the car companies at the time, so this is about what you’d expect when they designed a car just for women.

The Le Femme didn’t catch on and was discontinued after only a year or two.  If you see one today it’d be worth a fortune, so hang on to those Bic Pens, who knows what will happen.

Leave a comment

Filed under Customers, Segmentation

Age Segmentation: Life isn’t Linear Anymore

A few weeks ago, a good friend wanted to brainstorm with me.  She runs a marketing firm here in Des Moines and while we could view each other as competitors – and I suppose we are, in a way – we more often look for ways to collaborate.  We can either be friends, or enemies, and we much prefer the former.

She was working with a financial services client that wanted to do a better job of targeting “seniors.”  I put that word in quotes because that’s their vague directive; I personally try to steer clear of it because it has such a broad meaning.  “Senior” can mean anything from over 60, to over 65, to someone who is retired, to someone who is elderly and such.  Technically, “senior” could encompass both a first-wave baby boomer and a 90-year old World War II veteran – and each would have widely different needs, behaviors and attitudes.

Age-based segmentation (e.g., if you’re 60 you get this, if you’re 75 you get that) is actually pretty rudimentary because it assumes everyone at a certain age has similar needs.  But life isn’t linear anymore.  I’m in my forties, and some friends my age are becoming grandparents, but some are also becoming parents for the first time.  Some are celebrating 25th anniversaries, yet some are first-time newlyweds and others are newlyweds for the 2nd or 3rd time.  Some are looking ahead to winding down their careers, some are just revving theirs up.  A few are back in college, while some have college age-kids (and some actually attend college with their children).  To assume that everyone at the same age shares a similar lifestyle and has similar needs is a big mistake.

The better approach, I think, is behavior-based segmentation.  How do people spend their lives, what’s their family situation, their interests, what do they do in their spare time and – especially with financial services segmentation – what are their goals, aspirations and net worth?

It turns out this financial services firm wanted a “club” type marketing effort to people that are fairly affluent – they just assumed this would be seniors.  However our recommendation was to forget about targeting a specific age group and focus on other attributes.  There are likely plenty of 40-somethings who are well to do, and plenty of 70-somethings just scraping by.

To focus on age instead of real needs would miss this point entirely, resulting in a less effective marketing effort.

Leave a comment

Filed under Segmentation, Strategy

Financial Services Segmentation

We’re at that point in the marketing class I teach at Drake University where we discus segmentation.  How can marketers identify and reach those people who are most likely to buy their product or service?  And how can they group customers with similar wants and needs?

The textbook of course mentions all the conventional segmentation methods such as grouping customers by demographics (men have different needs than women), geography (people in Minnesota buy different snowblowers than people in Oklahoma), lifestyle (hobbies, interests); product usage (frequent flyers versus seldom travelers), and product features (some people want the Honda Accord V6, and some want the 4-cylinder model).

But I’ve found that while these approaches generally hold true across various industries, there are additional segmentation techniques when it comes to slicing and dicing the financial services market.  For example, while a home buyer in California may indeed desire a different mortgage product than someone in Nebraska (perhaps due to the higher home price and such), there may be even more effective ways for companies to group customers.  Things such as:

Profitability. It’s hard for a consumer product company like Proctor & Gamble to know exactly who is buying their toothpaste (except on an aggregate level).  But financial services companies not only know exactly who the customer is, they know a lot about him or her.  Of course this data must be used with great caution (and subject to various privacy rules), but it’s pretty easy to determine customer profitability on an individual level.  Looking at the street value of the asset is only part of the picture; consider behaviors like how and when the customer makes their payment, how they interact with the company, the number of other products owned, the likelihood of buying additional products, and more.

Tech prowess. Customers who have PIN numbers, frequently access their accounts on-line, are a Facebook fan, follow tweets and the like often have different wants than other customer groups.  Segmenting customers by their receptivity to technology can prove beneficial (as can the additional opportunities to communicate).

Financial sophistication. Often you can tell a lot about a customer by what financial products and services they buy.   (I’m not talking about how people in Florida would buy hurricane insurance when someone in Iowa would not – that’s a bug duh.).  But by digging deeper, and looking beyond the immediate purchase, you may gain other useful insights.  The customer who buys, say, a credit life insurance policy – or who pays only the minimum balance due, or who retains a product that has an above market interest rate – may have a much different level of financial sophistication than those who do not.  Although you need to be careful when making generalizations, such information can be very advantageous when determining what other ways the customer can be served.

Segmentation can be a very powerful marketing tool (even though I’ve noted in previous blog posts that the mass market is still alive and well, too).  These examples are just a few of the ways it can be approached for financial services companies.  Because these firms, especially, have an edge of many other industries because of the robust customer information that’s available.

Leave a comment

Filed under Customers, Market Research, Segmentation