What is... And is Not... Segmentation? American Zoo and Aquarium Association Annual Meeting Chicago,...

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

American Zoo and Aquarium Association Annual MeetingChicago, IllinoisSeptember 16, 2005

Mark RudzinskiManaging DirectorAeffect, Inc.520 Lake Cook Road, Suite 100Deerfield, IL 60015847-267-0169

© 2005 Aeffect, Inc


Presentation Overview

I. Working Definition of Segmentation

II. Segmentation: A Brief History

III. Why Should You Segment Your Audience?

IV. Methods of Segmentation


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 decision-making, 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.


Overview of Segmentation

What is Segmentation?

Undifferentiated whole Differentiated insight


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 - 1950s:– Mass production, low cost/low margin: profitability = high volume– Loss of personal relationship with customer, emergence of fragmented

media (radio) introduces demographic segmentation• 1960s - 1980s:

– 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


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


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


Methods of Segmentation

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




• 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




• 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




• 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




• 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?




• 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



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

YourVisitors

YourMarket




• 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.




• What are some of the widely used methodological approaches to segmenting a market?

– Qualitative segmentation

– Demographic/geodemographic

– Behavioral

– Attitudinal or psychographic

– Combination of approaches



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



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



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



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


Overview of Segmentation

QualitativeGeo-

demographicBehavioral Psychographic

Combinedapproach

METHODS

BENEFITS

LIMITATIONS

DEFINITION In-depth, non-quanti-tative insight

multivariateCensus data

visitation, volume of use, etc.

attitudes, values, etc. All of theabove

Helps to understandthe why? Rational,

emotional benefits, values

Not quantified,highly subjective,requires skilled

interviewers

market descriptionat household type

level

expensive to acquireadditional data,

no museum category insight, not

institution-specific

US CensusPRISM,ACORN

Focus groups, IDIs,dyads, triads, ethno-

graphy

internal data visitor & marketdata

visitor & marketdata

rich insight intovisitor activity, but

not attitudes ordecision-making

requires sophisticated

info. sys. to mine, analyze & model

reveals visitor& non-visitor attitudes,

perceptions, values, decision-making

marries attitudes,behaviors & demosto yield actionableaudience segments

requires moresophisticated data

collection, may not beactionable if based

only on attitudes

requires sophisticated

data collection & analysis

Summary of Approaches


For more information, please contact:

Mark RudzinskiManaging DirectorAeffect, [email protected]

What is... And is Not... Segmentation? American Zoo and Aquarium Association Annual Meeting Chicago,...

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