Smart online segmentation through search behavior

While search is the number one activity that most people do online, not many realize that searchers reveal more than they conceal! Thanks to the power of big data it is indeed possible to use search behavior to indulge in some informed and powerful segmentation. Let us take a couple of instances.

1) You work with a company that is launching a fitness tracking watch

• You would definitely be interested in people who are looking for fitness-related information. So the usual keyword suspects would include terms like "Gym", "Fitness Center", "Healthy Living", "Exercise recommendations", "Healthy Eating", "Fitness Tracker", "Fitness Tracking" etc.
• Additionally, you would be even more interested to know which of these searchers went on to visit the website of health related companies and organizations.
• Further insights could be gained if you could filter down to searchers who actually looked at competing brands/products from your competitors
• A glance at Analytics data would give you a precise fix on the age group, gender skew, attitudes, opinions and interests.
• Combing all of these would provide you with a laser-like focus on exactly the right audience. No reach wastage, no unnecessary spends!
• It would also inform you about the precise price-point that will attract these searchers.

2) You work in the travel vertical, booking custom vacations for customers

• You would be interested in searches around terms like "Best Vacation Option", "Best place to visit in October", "Vacation for two to <Destination>", "Best family vacation in <budget>", etc.
• You would be even more interested in finding out which of these searchers went on to check travel aggregator sites, individual operator sites or even airline and package tour websites.
• Specific information on people who looked at online shopping sites for travel-related purchases could give you an alert that they are seriously planning things.
• Further insights could be gained if you could filter down by searchers who visited your closest competitors for similar services
• Again, analytics data would give you age, gender, attitude, opinion, interest specific information.
• You could even look for specific inputs on people who browsed through ratings on sites like tripadvisor and kayak.
• These channels could also give you a wealth of social media information helping you pin-point the right prospects.
• All of this information would help you collate a list of active searchers who are inclined towards the product/service that you are specifically selling!

All of this is possible even with free tools available online. Even more specific information like where people came from, how long they spent, which specific parts of your site and where they went on-wards can be gained by deploying the free and simple Google Analytics on your blog or website. Getting analytics on your website should therefore be your number one priority. After all, here is an opportunity to see the power of segmentation work for you. Up, close and personal!

Digital Segmentation Experiment

The next time you are out shopping for home goods, groceries and daily consumables, try out this little experiment. In fact, you can do this even if you only ever shop online without having to physically get to a store. The experiment has to do with the way people purchase and it may reveal things about you that you probably never noticed before. Ready? Let us begin.

Price

Is price the primary criterion for all your shopping endeavors? I mean, is that the dimension you start with when looking for things to buy? Don't jump the gun just yet. Even if price is the fundamental criterion, there are several aspects of it. For instance:

• Are you on the look-out for the lowest possible price?
• Are you sometimes (with a specific set of products) willing to pay more for perceived quality?
• Would you consider buying products that are currently on a discounted price as opposed to their regular retail price?
• Would you consider buying items closer to their expiry date if they are discounted?
• Do you stop by the bargain discount counter or tab at all? Or frequently?

Quality

Similarly, is quality your chief criterion? If so, what are the parameters of your quality-centric shopping?

• Would you consider paying more for quality?
• Is higher price your most reliable indicator of higher quality?
• Would you pay more for organic products?
• Would you be willing to pay more for 'green' products?
• Does quality apply across all your purchases? Or is it limited to specific product types? For instance food items, skin care etc.

Brand

Brands exist for a reason. They seemingly offer consumers choice. But brands may mean different things to different people. Even the same brands! How do brands figure in your shopping criteria?

• Is there a specific brand you are fond of? 
• Do you have brand preferences across products lines?
• In your mind, do you have a hierarchy of preferred brands? Options if your first choice isn't available?
• On what basis did you develop this brand hierarchy?
• What factors influenced the brands in your consideration set?

Your answers to these questions will tell you a lot about the kind of consumer you are. Remember there are no right or wrong answers. To each one their own style! All we are trying to do here is to find out what kind of a value/price/brand shopper you are. More importantly, doe your preferred store or online destinations allow you to shop based on these criteria? Is it an over guidance or a tad more covert? Think about it!

Segmenting the Digital Shopper | Thoughts and Observations

Is there a fundamental difference between shoppers online and offline? Marketers have constantly been grappling with this question. It is no so much the matter of need or infrastructure but more on the lines of ability and willingness. Using segmentation to understand them will help us answer this perennial question.

Let us try to take a look at consumers and their behavior on online channels. This only includes those consumers who have made use of some digital channel at some point in their purchase journey. Whether it is Research-Online-Purchase-Offline or otherwise. A while ago, a leading media agency (associated with a big network) came up with six distinct segments for these consumers. 

The segments include:

• Basic Digital Consumers
• Retail Scouts
• Brand Scouts
• Digitally Driven Consumers
• Calculated Shoppers and
• External Shoppers

The details pertaining to each of these segments are as follows:

Basic Digital Consumers: these are not savvy digital users. While they may have a basic level of comfort with online research and shopping, the are not as prominent on mobile or social channels. However, in terms of overall likelihood of buying offline, they are the second highest segment.

Retail Scouts: These consumers exhibit a market preference for a particular retailer over brands. This is not to say that they are brand averse, rather that they look at their preferred retail outlet to inform their shopping. They have a decent presence on mobile and are likely to use it more at home than elsewhere. They are comfortable buying online but don't show a marked preference for that or offline.

Brand Scouts: These consumers are very similar to the Retail Scouts except for the fact that they have a favorite brand as opposed to a retail outlet. The majority of them begin their shopping research with a particular brand in mind. They may however be motivated to buy other brands.

Digitally Driven Segment: These consumers use every digital channel to inform and conduct their online shopping. They use social and mobile more than any other segment, value convenience above all else and they do everything in their power to avoid physically going to a store. While they have a healthy user base at present, they are only likely to grow in numbers and importance as a segment.

Calculated Shoppers: These are the "wait and watch" consumers. They know that they want to make a purchase but are trying to narrow down the consideration set to pick one clear brand. There is no urgency in their shopping pattern. They prefer to take their time to get the best deal.

External Shoppers: These are the window shoppers of the online world. These are non-mobile shoppers. They typically make use of fixed web channels to conduct their research and try to find compelling reasons to buy and to buy a specific brand at the same time. They too take their time to make a purchase.

So, various clearly-defined segments do exist in the online shopping sphere after all! The important thing to understand is that the purchase journey or paths taken to purchase differ for all these consumers. While price may be a core concern, it is the nature and length of the journey undertaken that becomes the dominant factor. Price and promotions are relegated to secondary positions.

The other thing to remember is that like all journeys, these paths to purchase will also change over time. The increasing shift to mobile devices will fundamentally change the way consumers look at and experience online shopping. Demographics alone will be of little aid in helping us track these journeys. Marketers therefore need to keep a keen eye on intent - the triggers that influence each of these segments - in order to devise a strategy to cater to these segments. That and continuous refinement over time to co-relate to changing behaviors.

Digital Segmentation in the Automobile Industry

Answer this quickly! What do the following Automobile brands have in common?

Porsche, Audi, Bentley, Lamborghini, Bugatti, Skoda, Seat, Scania, Man and Ducati

For those who don't know (and frankly, neither did I before I researched this post!) these are all automobile brands owned by Volkswagen! 

While that bit of information is startling enough, a closer look reveals another facet. Many of these brands compete against one another, especially in the Luxury segment. What this means is that consumers, irrespective of the brand preference, are actually putting their money into Volkswagen's pockets. In most cases, they don't even realize they are doing so. Call it underhand marketing or brand segregation at another level, it clearly works for Volkswagen.

This brings us to the topic of today's post. How exactly does segmentation work in the Automobile Industry? In previous posts we have already examined in detail why demographics are not the ideal way to segment. However, does the automobile industry have a specific type of segmentation that works? They answer may surprise you. For there are not one, but three non-demographic ways to segment for this industry vertical.

1. Value-based segmentation

Value means different things to different people. Hence, this method of segmentation can be further sub-divided into three distinct categories.

a) Those who buy cars for their economy (fuel or otherwise)

These people are looking for the cheapest car that will serve their needs. Brands aren't that important to them. They prefer to go with the brand or dealer who offers them the biggest savings or discounts. They are particularly concerned with fuel economy. After price, that is their chief concern.

b) Those who buy the best car they can afford

While a bit more brand conscious, these people are looking for the best car they can afford. They typically have a budget in mind and use a checklist to find a car that checks the most boxes. Build quality, durability, reliability, fuel efficiency, service availability, cost of parts are all factors they look at. Price is a primary concern but not the only one.

c) Those who buy the car that enhances their status

This category of people may not readily admit their desire, but status or the prestige value of the car is an important factor in their consideration. Their version of status may not realistically represent the luxury market - rather, it is an upgrade to the next level of car that they desire. Owners of hatchbacks moving to sedans and sedan owners upgrading to an SUV are examples that represent this category.

2. Aesthetics-based segmentation

Again a complicated segment simply because aesthetics (or the lack of it) differ greatly among individuals. For some buyers an expensive car is a showy automobile that has a lot of chrome and ornamentation while for others it is a much more subtle, bling-less appeal. The key to understanding this segment is identifying cues from other aspects of their life. What does status represent to them? How do they define class? How good or contemporary is their understanding of style? What trends in fashion and lifestyle appeal to them? The answers may not be readily available or forthcoming. So the best way is to use cross-category information to identify their sense of aesthetics.

3. Evolution-of-choice segmentation

This is an important segment in the automobile industry. These are people who bought a particular brand. The reason could be one of many - the discount was great, the deal was attractive, the version that year had great styling etc. Post this, they fall into a wide spectrum. On the one hand there are hardcore loyalists of a particular brand. They have only ever owned one make of car and will continue to do so. Possibly moving up the value chain with other brands across categories from the same manufacturer. On the other extreme of this spectrum are the brand flirts - those who buy whichever make of car catches their fancy at that particular point in time. They can be easily persuaded to buy another make. In between these two extremes lie the susceptible consumers. They have a particular brand preference to a greater or lesser degree. However they can be persuaded to consider another make - if the motivation or rationale is strong enough.

Depending on the kind of segmentation approach chosen, a digital strategy could be put together to identify the best approach. When catering to the Value buyers, product features that confirm their needs can be highlighted. When catering to the aesthetics seekers, content marketing with a lifestyle or fashion slant could prove effective. When playing to the evolution-of-choice consumers, influencers and endorsements from trusted category experts could swing things in one's favor. 

What is important however to start segmenting. If an automobile marketer chooses not to do so, they run the risk of using the wrong way to market to the wrong audience. And that is never a good way to build a brand in any sector!

Digital Marketing Segmentation for the Education Industry

When it comes to education and higher education in particular, it is tempting to view the student community as a homogeneous mass. The traditional approach has been that all students are the same and that the same motivation – acquiring a good education – motivates them. However, increasingly, this is not the case.

What is more important is to understand why students are interested in education. What do they expect to get out of it? What purpose drives their efforts? When marketers explore mindsets to define the right approach, it makes for more relevant targeting and positioning. This is diametrically opposite to the old technique of listing out all the features and benefits that an institution offers prospective students. This may or may not be relevant to all kinds of students.

Coming to the kinds of students, as mentioned earlier, they are no longer a homogeneous mass. This is where a dated, yet still relevant report by the Parthenon Group (currently a part of Ernst & Young LLC) throws some light on segmentation in the higher education sector.

Titled “The Differentiated University”, this report separates students into six distinct and defined segments based on their motivations and mindsets rather than just demographics. These segments include:

• Aspiring academics
• Coming of age
• Career starters
• Career accelerators
• Industry switchers and
• Academic wanderers

The details of the various segments, as defined in the report are as follows:

Aspiring Academics - 24%

The Aspiring Academics are the segment most similar to the picture of the “traditional student” that most colleges are so aggressively seeking to serve. They are 18-to-24-year-olds with impressive academic profiles, and often come from wealthier families. They are academically driven with plans to go to graduate school, so the availability of a specific major and the presence of top-notch research faculty are valued by this group. While this segment is the largest of the segments found in the survey, it remains only a quarter of the market.

Coming of Age - 11%

A second, smaller group of traditional-aged students, the Coming of Age segment, is not yet sure what they want to focus on when they “grow up,” but have the luxury of taking the time to figure it out. These students are less academically driven than Young Academics and place little value on research opportunities, research faculty, or graduate school offerings. For them, college is about broad academic offerings, an active social culture, and trying a variety of activities without knowing exactly where it will lead.

Career Starters - 18%

These Career Starters are extremely job oriented and use college to advance their specific career prospects. These students are focused on life after college, and are looking for a college that enables them to reach their ideal career position in the shortest amount of time. Career Starters are one of the more price-sensitive segments and value job placement rate and career placement services in making their college selection.

Career Accelerator - 21%

Typically older, Career Accelerators are going to college with the aim of advancing their career at their company or within their current industry. These are primarily working adults with some prior college experience and are likely to be most interested in institutions that award credit for their previous academic experience, as well as their job experience. These students value non-traditional delivery methods, particularly online courses. Career counseling and career placement services are strongly desired by this group.

Industry Switchers - 18%

While in many ways similar to Career Accelerators, Industry Switchers have a different motivation for going back to school to earn their bachelor’s degree. Often in more precarious financial positions or unemployed, this segment is looking to start a career in a completely different field. Industry Switchers place a high value on an institution’s link to labor markets and its ability to put them in touch with relevant employers and prepare them for their career transition.

Academic Wanderers - 8%

Students attending college later in life, Academic Wanderers don’t know exactly what they want out of college, but believe that obtaining a college credential will open doors for them. They are more likely to be unemployed and potentially have lower incomes. Academic Wanderers are the most “at risk” of the student segments. They are the least satisfied with their college experience, do not place high importance on their academic performance, and are the least likely to believe they will complete their degree.

These segments have been created with a specific focus on undergraduate students. However, the way they are defined leaves a lot of scope for usage across all kinds of student communities. This approach allows college and university leaders to develop more sophisticated strategies for reaching the next generation of students with offerings and operating models to most effectively and efficiently serve them.

Fundamentally, all students are interested in the same thing – an education. But digging a bit deeper can help marketers understand the specific reasons why. The real motivations are what help one determine what students expect to get out of the educational institution can go a long way in helping marketers build brand relevance.

The Differentiated University complete report can be accessed here.

Digital Marketing Segmentation | Defining Personas

One of the tools that present-day marketers use to help with segmentation is what is known as ‘Personas’. Market segments are based on broad commonalities of a particular audience. These may include demographic data, psychographic data and behavioral data among a host of other things. From a strategic standpoint, they are really useful in identifying which part of the overall audience is worth going after.

In order to determine the how, we need to develop suitable personas. Personas are highly-specific representations of the actual individuals who make up a particular marketing segment. Think of them as a representative individual who is ‘personified’ – giving marketers the ability to predict behavior, usage and reactions.

Although segments are strategic in nature and personas are more tactical, they both share one goal – helping you understand your customers so you can market to them better! When your segments are well researched and clearly defined, they will result in the creation of better personas.

The origin of personas

Personas originated in the field of programming and user experience design. The practitioners of these fields needed a way to better understand how typical users of the products they designed would understand and work with them to resolve actual problems. Otherwise, the product/experience design team was likely to get carried away with ‘cool’ ideas that did nothing to add value to the lives of the intended users. All form and no functionality would result in an interesting but largely-unused product!

Visualizing the ideal persona

Whatever data you choose to include in your persona, remember to visualize how that persona would look. It is helpful to include some personal information about the persona as that humanizes it rather than making it a statistics-filled demographic drone.

For example: Think of your audience as “Fresh Graduate in his first full-time job with an active social life who gyms thrice-a-week” rather than “18 to 24 year old male who has just started working”. While both attribute statements are likely to define the target audience, the former is more personal and offers you a way to connect with the audience. The latter just spews facts at you.

Another example: Thinking of your persona in terms of “Middle-aged family man with two teenaged kids and home-maker wife who is paying for a housing loan and a car loan but is keen on a foreign vacation for the family”, will provide more insights into financial product selection motivations rather than “Salaried male 34 to 45, seeking personal loan”. You get the picture!

No matter how you choose to go about defining your audience persona, remember one thing. Personas exist in the minds of the marketer – not the minds of the audience themselves. Every member of the audience would like to view themselves as unique individuals with a custom set of circumstances and motives. So try to be a tad objective with persona definition rather than making it painfully specific. After all, the objective behind creating personas is to enable you to reach out to a reasonably similar audience with reasonably similar motivations!

Digital Marketing Segmentation | Audience Attributes

When it comes to segmentation – whatever be your audience – attributes are a key way of gaining a better understanding your target. Attributes are nothing but quantifiable characteristics and provide a way for marketers to understand the needs and motivations behind audience behavior.

Attributes can broadly be classified under the following buckets:

Personal attributes – What people are

These are attributes that tell us what people really are. They mostly pertain to demographic data like age, gender, household income, marital status etc. A secondary level of attributes may indicate life-stages as well. Things like graduation, wedding day, birth of child etc can indicate the current shift in personal attributes and may have repercussions on choice of product/services.

Behavioral attributes – What people do

Behavioral attributes are mostly observed. What media does the target audience consume most? What kinds of products do they typically buy? What online sources of information are consulted? What kind of content is most consumed on social media channels? This gives us very usable information on where they are and what they do while they are there. Marketers can use this information to create compelling content to cater to audience requirements.

Attitudinal attributes – What people think

Attitudinal attributes comes in two distinct types. Some are explicit when people clearly know what they think and feel about a topic. However, human being being what they are, some others are rather implicit. People may often not realize what they feel about a particular topic till they are confronted with a specific situation. In such cases, the attitudinal attributes have to be inferred from available data.

Once these different attributes have been gathered and analyzed, they can be applied to segments. When customer segments are mapped to needs/values clustering, insights will begin to emerge. This helps marketers identify things like the right price point, the ideal segment to target, the most compelling message, the most valuable customer, the trigger for behavioral change, the way to pitch product information etc. This informs the creative process which leads to better conversions and hence sales.