Transcript Market Segmentation

Market Segmentation
Lifelong Learning 2007
Presented by Greg Marsello
We Must Segment the Market
…80/20 Principle
Why Segment the Market?
• You serve some, but not all,
demographic groups. There is no
average participant.
• Roughly 20% of your customers give
you 80% of your operating margin.
• To know who the 20% is.
• To focus resources on that 20% —
programs, staff, marketing.
• To make sure you serve your best
customers very well.
Problems Caused by NOT Identifying
Primary Market Segments
• Ineffective program selection
• Wasted promotion dollars
• Decrease in repeat rate
• Reduced operating margin
• Wasted staff time
Market Segmentation
• A process by which
you distinguish or
differentiate your
various audiences,
build a separate
demographic
profile, and then
deliver different
products, possibly
with different
promotions.
The ideal number of
market segments is 7
Chart 1: Organization Participants
High Dollars/
Activity
Low Dollars/
Activity
More Recent
Less Recent
25%
Highly active
25%
Higher dollar/
activity, but not
recent
25%
25%
Recent, but not Least active,
high dollar/
not recent, not
activity
high dollar/
activity
Chart 2: Net Income
High
Low
More Recent
Less Recent
80%
from most
active
25%
25%
-30%
from least
active
Chart 3:
Organization Resources
Time
Money
25% here.
This group is
underserved.
25% here.
Okay.
25% here.
Okay.
25% here.
Wasting time
and resources
here.
Chart 4:
Efficiency Strategy
Staff Time
Money
Finding Your Seven
Primary Market Segments
• Step 1: Get registration software
• Step 2: Run out your best 200
participants
• Step 3: Survey your best participants
• Step 4: Analyze your demographics
• Step 5: Get data for all participants
• Step 6: Now you know
Ideal Software System
Mailing List
Registration
Word Processing
Master Data File
Customer
Demographics
Room
Locations
Financial
Analysis
History
Brochures
Marketing
Analysis
Financial
Statements
Finding Your Seven
Primary Market Segments
• Step 1: Get registration software
• Step 2: Run out your best 200
participants
• Step 3: Survey your best participants
• Step 4: Analyze your demographics
• Step 5: Get data for all participants
• Step 6: Now you know
Know Your Participants & Allocate
Resources Accordingly
Recency
Finding Your Seven
Primary Market Segments
• Step 1: Get registration software
• Step 2: Run out your best 200
participants
• Step 3: Survey your best participants
• Step 4: Analyze your demographics
• Step 5: Get data for all participants
• Step 6: Now you know
Critical Customer Demographics
Community Courses/Events
• Geography*
• Age*
• Sex
• Formal Education
Critical Customer Demographics
Continuing Professional Education
• Geography
• Occupation*
• Job Title
• Age*
Critical Customer Demographics
Credit Courses
• Geography
• Age
• Sex
• Formal Education
• Race/Ethnicity
Finding Your Seven
Primary Market Segments
• Step 1: Get registration software
• Step 2: Run out your best 200
participants
• Step 3: Survey your best participants
• Step 4: Analyze your demographics
• Step 5: Get data for all participants
• Step 6: Now you know
Demographic Analysis Examples
Age
18-20
21-25
26-30
31-35
36-40
41-45
46-50
51-55
56-60
61-65
Example 1
20
20
20
20
20
20
20
20
20
20
Example 2
10
70
30
20
40
10
10
5
5
0
Example of Analyzing
Demographic Variables
CPE, Seminars, Conferences
& Other Work-Related Events
Example 1
Aerospace (3812-01)
2
Ambulance Services (4119-02)
4
Architects and Related (8712)
23
Attorneys (8111-03)
17
Bookkeeping Services (8721-02) 15
Bldg. Mat’l Suppliers (5211-26)
2
Carpet/Rug Cleaners (7217-04)
5
Consulting Companies (8742-01) 16
Example 2
16
9
12
9
6
8
5
11
Example 1
Computer Consult. (7379-05)
8
Convenience Stores (5411-03)
2
County Gov’ts (many)
1
Engineers (8711)
14
Hospitals (8062-02)
7
Insurance Adjusters (6411-02)
2
Landscape Contractors (0782-04) 1
Nail Salons (7931-02)
16
Printers (2752-02)
4
State Government (many)
12
Tractor Dealers (5083-04)
0
TOTAL
200
Example 2
20
9
14
10
11
12
9
8
6
16
9
200
LERN’s Market Segments
–
–
–
–
–
–
–
Associations
Churches
Community Colleges
Free Universities
Co-Op Extension
Museums & Gardens
Hospitals &
Healthcare
– Individuals
– Private Businesses
– Libraries
–
–
–
–
–
–
–
–
–
Military
Technical Institutions
Parks & Recreation
Public Schools
Universities
Private Colleges
Community Centers
YMCA, YWCA, YHA
Colleges & Schools
within Universities
LERN’s Market Segments
1. Universities
2. Community Colleges
3. Associations
– Associations were 1% of LERN
customers; decision made to grow
segment;
20,000 U.S. associations
4. Parks & Recreation
5. Public Schools
6. Colleges & Schools within Universities
– Broken out from university growth focus
7. Technical Institutions
– Broken out from community colleges to
give priority
Finding Your Seven
Primary Market Segments
• Step 1: Get registration software
• Step 2: Run out your best 200
participants
• Step 3: Survey your best participants
• Step 4: Analyze your demographics
• Step 5: Get data for all participants
• Step 6: Now you know
Ways to Collect Demographic Data
• Registration Form
• Phone Registration
• Mail Survey
• Confirmation Card/Letter
• First Meeting
• Contact
Finding Your Seven
Primary Market Segments
• Step 1: Get registration software
• Step 2: Run out your best 200
participants
• Step 3: Survey your best participants
• Step 4: Analyze your demographics
• Step 5: Get data for all participants
• Step 6: Now you know
7 Primary Market Segments
Segment Segment Segment Segment Segment Segment Segment
1
2
3
4
5
6
7
Division
D
Division
B
Division
F
Division
A
Division
C
Division
G
Division
E
Using Segmentation Data
• Identify which courses/events your top
segments take and do more of them.
• Promote more to your top seven
segments.
• Offer special deals to your top seven
segments.
• Survey them and survey them again.
• Find others that look like your best
customers.
• Tailor promotions.
• Build new desirable segments.
Let LERN Determine Your 7
Primary Market Segments
• LERN’s Segmenting Tool determines
primary market segments, carrier
routes, repeat rate, LifeTime Value, and
star customers, as well as allowing you
to generate mailing lists.
• For more information contact Greg
Marsello at [email protected].
Thank You!
[email protected]