Join Doug Ladd for an in-depth discussion in this video Where to find data for geographic and demographic segementation, part of Marketing Foundations: Customer Segmentation.
- Finding the information to segment your customers or targets by geography, demographics, or cultural variables may be just a few key strokes away. Let's go through each of these areas separately. Geographic data can be found in several areas. If you have some type of customer database, anything from a CRM module as part of an ERP system for your company, all the way down to a simple spreadsheet where you have a list of customers, you have enough to start. If you aren't certain of where to look for a customer list, try looking in your invoice files.
They may show where your company has been sending bills for payment by customers. Another good source can be your shipping records. If you've been sending products to customers, you've got great data on where they are located. Since we all have a zip code associated with our names, starting your search at that level of granularity is appropriate for most businesses. There are many companies that specialize in direct mail and other forms of advertising that may be able to help you get even more specific down to the neighborhood or street level, if that's necessary for your needs, and the return is worth the investment.
You can also use phone number area codes as a way to develop geographic segments for your business. The caution with this method is that many people now use their mobile numbers as their primary phones, and the trend is for people to keep their number, even if they move. So just because you see some of your customers have a (212) area code doesn't necessarily mean they live in New York City. If you don't have data of your own to use, you should reach out to some of the direct mail and telemarketing firms you can find via LinkedIn or a simple internet search.
They can help you target down to the geographic level you want. These firms can help you get demographic information as well, but much of the information you need to develop profiles of your targets is available at census.gov. Let's say you've come up with a fantastic retail idea that's going to be the next rage taking yoga to a new level. And you have the luxury of being able to pick any city in America to open your first couple of gyms. Your research indicates that women tend to be the first movers when it comes to new exercise regimens.
Luckily for you, the US Census Bureau reports data on sex ratios by State and county. A lower number means there are more women than men. Ok, so you do your research, and you see that in 2010, Pembroke Pines, Florida, just outside of Fort Lauderdale, had the lowest sex ratio in the U.S. In a city of about 160,000 people, there were 85,000 plus women, and the average age in Pembroke Pines is 41, a little higher than the State average of 37, but within your target range.
This is just one way to use the data from the census to help you. Outside of the United States, you can gather similar data from cia.gov and worldbank.org. Another way to generate new demographic data is through surveys of your customers. The great thing about customer surveys is that they cost you next to nothing if you get creative. If you have a webiste or Facebook page, you can reach out to your customers, and ask them to engage with your brand. Once they have agreed to do so, you can ask them to voluntarily share some of their demographic information with you.
Or you can use discounts, promotions, and other ideas to get them to share some of the data that's important for you to know. I would be willing to bet that you've provided demographic information to at least one company with which you've done business. And you may not have realized it at the time. Have you ever filled out and mailed in a warranty or product registration card? These cards sometimes ask consumers to provide more than just your contact information. They may include questions such as your income level, highest degree of education, the number of children in your home, and cars in your driveway.
If you're company uses a survey tool such as this, you may have some fascinating demographic data already in your files to use. One word of caution here though, some States have very strict limitations on the use of warranty or product registration cards to gather information that's not necessary for management of the warranty. As a general rule, I would suggest if you're going to ask your customers for demographic information, you should make it clear that it's voluntary, and it's not a requirement. Gathering information to help with cultural segmentation usually requires more work, but it can be worth the effort.
The key here is to talk with your customers. While it's possible to create some hypotheses based on census data or a spreadsheet analysis of your revenues, I have found the most insightful results come from interviewing your customers to look for commonalities. So go do some digging. What can you learn or infer about your customers or future targets by pouring through the wealth of information already available within your company, and from online data sources?
- Segmenting by location
- Segmenting by demographics
- Segmenting by usage or other behavior
- Why segmenting is important
- Creating and using customer personas