Join Doug Ladd for an in-depth discussion in this video Developing profiles of your customers and targets, part of Marketing Foundations: Customer Segmentation.
- One of the things a really effective salesperson learns is if the prospect is going to say no, get her to do so quickly: it's all about efficiency. Being able to determine whether or not someone is the right target helps you allocate your time more wisely. We can apply the same concept to the world of marketing. If we can determine whether or not a potential customer is the right target for our message, what type of message would be most appealing or interesting to them, and what media are most likely to grab their attention, we can be more efficient at our marketing efforts.
Here's how I recommend you going about it: If you're working in a business where innovation, new products, or new services are key strategic drivers for the industry, you can start by mapping customer segments onto an adoption curve. For example, using Rogers' technology adoption curve, you can begin by gathering data on the pace at which other innovations have penetrated the market in your space or similar markets. You can often find these types of data from industry reports or business journals that cover your industry.
For example, here are some data from Pew Research Center on the adoption of social media usage by Internet users over time. By placing this onto the adoption curve, you can appreciate that after broadband usage had penetrated through the innovators and early adopters, in August of 2006, it took almost 3 more years to move through the early majority and get close to the 50% rate. Then things slowed down, and as of January 2014, broadband still hasn't made it all the way through the late majority.
Now the fun begins. Once you've got the beginnings of an adoption curve mapped out, You can do some investigative work about the people who sit in these different segments. Who are these people that are the customer innovators in your category? What demographic information can you uncover about them? Do you know their average age, income, education level? What about the early adopters? How are their demographic data different from the others' along the adoption curve? Take a look at these details about the adoption of different financial payment methods from research by the Consumer Payments Research Center: 52% of U.S. adults have used a bank website to pay a bill online, which means this type of service is about halfway through the adoption curve.
If you're in the banking business, you may be tasked with developing plans to get those 52% of adults to use online bill paying more frequently. Or getting the other 48% to do so more frequently. We'll focus on how to get your current consumers to use your service more often. Digging into the data a little deeper, you'll find 69% of people, aged 25 to 34 have used the bank website to pay a bill, While only 40% of people, aged 65 or over have done so.
Just 33% of people with incomes below $25,000 per year report doing so, while 69% of those with incomes greater than $100,000 have. So you could reasonably assume that a good target for the marketer responsible for growing the use of online bill paying would be targeting young account holders with high incomes. By combining demographic information with data on the adoption rates within your category of interest, you can then create written profiles of the average consumer within a segment.
This may help you develop an even cleaner picture of your target. As an example of you combine these two concepts, we'll take another look at the smartphone market: Nielsen's research on early adopters of technology found 63% of them are male, they have a mean age of 31, and an average annual household income well above the national median of $67,000. Plus, about half are married, and 57% have children younger than 18 at home.
With this type of customer profile, you can now begin to think about what message may be appealing to these early adopters. And you can look at media outlets that are more likely to catch the high-earning, young man with small children at home. The efficient salesperson has learned how to make the most of her time. So too a good marketer uses data about adoption trends and demographics to develop marketing programs. What customer profiles can you create to improve your targeting?
- Segmenting by location
- Segmenting by demographics
- Segmenting by usage or other behavior
- Why segmenting is important
- Creating and using customer personas