By Christopher Skinner
Clayton Christensen makes an excellent point in his article Marketing Malpractice -- we need to first focus on the unfufilled needs that products solve before we decide who to target with marketing.
Christensen argues that marketing segmentation practices are broken; he says that instead of focusing on who the customer is or product features, we should be focused on promoting the real job the product or brand fulfills. He says that "marketers busy themselves with trying to understand the needs of representative customers [that have specific demographic and psychographic attributes] and then create products that address those needs." Instead, he suggest, marketers should understand the jobs that customers need to get done and then design products and messaging that will accomplish those jobs.
And these things (designing products to do a job and customer segmentation) shouldn't be mutually exclusive. In fact, they have a symbiotic relationship and if used together can drive not only brand equity but business growth.
Marketers begin by "going out into the world," as Christensen recommends, to understand the unfulfilled needs (or jobs) of the customer. In one example he cites, marketers observe the morning commuters dash in and out of a popular fast food chain. They analyze why people buy shakes— what job do the shakes fulfill? Obviously not the "healthy choice", they determine customers are looking for an early morning food to occupy them during a long boring commute and keep them full until mid morning.
Once marketers have identified the job, then (and not before then) segmentation will help them determine who is likely to have these needs — this will help them make better media and geo-targeting choices. They can avoid marketing in areas whether more healthy behaviors are prevalent, or where there are more retired folks (no commutes), for example. They can heavy up in areas where incomes are low to mid, focusing on people in suburban areas where convenience and price are valued above nutrition.
In sum, understanding the core problem a product solves and who is likely to have that problem can make for a profitable marketing (and business) strategy.
Posted June 10th, 2013 in Customer Segmentation,
By Sally Crawford
Apparently, Science and Marketing are getting to be really good friends, with CMO's "embracing science because it fuels business growth in a concrete way."
An example that resonated with me was H&R Block's use of data to segment target customers. Whereas they've had customer segmentation data for years, this was the first time they really made it actionable: by overlaying additional data they were able to connect their customer segmentation data to marketing initiatives. This was a game-changer for their growth strategy, according to CMO Robert Turtledove. The additional data overlay enabled them to prioritize their segments and the tactics used to reach them.
"H&R Block has identified eight different customer segments in the past two years," said Ellen O'Connor, account supervisor at WCJ. "This is the first year we're incorporating that segmentation data and using it to guide us in versioning our direct mail copy to include copy that's more relevant to each segment. It gives us a way to really go after our most profitable customers and aggressively retain the ones that have the most value potential."
This goes to show you how the integration of data sources, often data held by two or more different departments in the same company, can mean the difference between just plain information and understanding – or in this case customer profiles and actual customers.
By Christopher Skinner
If marketers really want to get in on a big secret, something that could make them look great and their companies or clients perform even better, they need look no further than the store buyers.
These are the people who have been studying sales and buying trends from Dallas to Detroit, sometimes for years; the buyer knows that Macy's sells one style of shirts more in Chicago, but men in Birmingham like another type altogether.
That's right, the buyer(s) might be all the insight you need to connect to the customer (well, almost.) Because the buyer knows how to buy for their given markets and regions, and if you know what's being bought, chances are you know who's buying.
And if you know who's buying then you've got your profitable customer segment, or segments.
In fact, at MakeBuzz we often start with the virtual buyer when we're designing marketing strategies. We look at what's selling to help define who we need to reach. If big screen TVs are, er, big in Fresno but that same store sells mostly mp3 player's in Tampa, we know we're looking at different customer segments. Segments that need more than a one-size-fits-all marketing plan.
In fact, everything about those two plans are different, from the predicted sales performance, budgets and acceptable cost-per-acquistion, to the media placements and search terms.
So next time you're sitting down to build a nationwide marketing strategy, ask yourself, what would the buyer do?