Marketing Insights

by Firuz Juraev (Ph.D candidate)

Part 1: Course 1

Customer Segmentation

Segmentation

• Dividing the market into groups of potential customers (market segments), with distinct characteristics, behaviors, or needs.
• Each segment should clearly differ from the other
• People in each group should show a great deal of homogeneity in their behavior

Examples:

Coca Cola

• Coca Cola company created multiple brands for different market segments. If company sells only coca cola, in future they may loose many market segments to opponent companies.

200+ Coca Cola Brands

Benefits of Segmentation

Benefits to the Oranization

• Higher customer satisfaction
• Better product design
• Indentification of unfulfilled needs

Benefits to the Customer

• Personalizaed products and experiences
• Convenience and time saving
• Tailored products and services

Who is your customer?

Not knowing the asnwer will result in:

• Waste of marketing resources
• Failure in responding to market needs
• You can not be everything to everyone

Example: Iridium Failure

• Filed for bankruptcy in 1999, after the company had spent $5 billion. They produced a satellite phone that worked all over the world. The handsets were clunky, weighed about 1 lb. The handset cost $3,000 and talk time was as much as $5 per minute.

Characteristics of useful segmentation

• Identifiable - That is, we have to kind of understand and be able to identify who is who and who is in our segment.
• Substantial - the segment should be large enough to be cost effective and be profitable (ex: small rural towns are not substantial for Walmart but large enough for Dollar stores).
• Accessibile - So we need to have segments that we can access them because then we need to kind of distribute our products later to those segments and also use communication channels to to make them aware of the product and use our advertising strategies stable should be the other characteristic, meaning that each segment
• Stable - Segments should be stable over long enough period of time (for creating long term marketing strategies)
• Differntiable - Segments should be respond differently to marketing programs (segmenting customers by gender for pen selling is not good diffentiable becuase there is not big difference in usage of pen between women and men).
• Actionable - We want to have a segment that you can make an action on, meaning that we want to develop our marketing strategies and and products around that.

Major Segmentation Variables for Customer Markets

• Geographic - Country, region, city, urban/rural, different climates
• Demographics - Age, income, gender, generation, martial status, ethnicity, occupation, education
• Psychographics - Lifestyle, personality, activities, interests, values
• Behavioral - Usage rate, loyalty, product knowledge, involvement, purchase occasion, buying stage
• Benefits Sought - Convenience, values, safety

Examples:

• Geographic: McDonalds in India does not serve meats becuase it's country that in their culture (e.g., vegetarian burgers).
• Demographics:Rasor companies, they have reasons for men and women.
• Psychographics: Intangible customer characteristics (expensive and time consuming)
• Behavioral: like tobacco users, for example, in the tobacco industry, they use that like heavy smokers. They consume most of of the cigarettes and they try to segment their market and product advertising
• Benefits Sought: Laptop, we can have different benefits that we are looking after. So the benefits of these products are different.

Important Points

Which variable to use depends on

• Type of industry
• Type of product and market
• Availability of information
• Cost of sgmentation

• Usually a combination of these variables are used
• Remember the goal of segmentation!
• To conduct a proper segmentation you need data and research!

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Targeting

• Next logical step after segmentation
• Evaluating each segments attractiveness
• Selecting one or more to enter
• The goal is to select the segment with highest profit potential

Segment Size

• The number of customers in the segment **
• Total Spending Potential (SPI) **

Potential Growth

Ability and Cost of Reach

• How difficult and costly is to reach the people in that segment?

Competition and Customer Satisfaction

• How intense is the current competition (Supply)
• If it is an attractive segment, it might have already been targeted by competition
• Customer satisfaction with current offereings (Low satisfaction is opportunity)
• Niche marketing is a good strategy in hyper competitive markets

Barriers to Entry

• Heavy investment?
• Easy to enter?

Mass Markets & Niche Markets

Mass Markets

• Large Market
• General products (focus is on product rather than customer)
• Communicating with the largest possible group of audience
• TV commercial or a massive flyer printing campaign
• Heavy Cost

Niche Markets

• Smaller markets
• Requires far less money
• More focused and targeted
• Focus is on the customers and their specific needs
• E.g., pen for left handed people (mass marketing, pen for everyone)

Segmentation Needs DATA

Primary Data (Research)

• Descriptive Analysis (Observation, expert interviews, focus groups, etc)
• Surveys
• Cluster Analysis
• Conjoint Analysis
• etc

Secondary Data (Research)

• Professonal databases that are available: Census, GFK MRI, Esri Business Analyst Online, etc.

EXAMPLE:

• Data: Books Selling
• Base: Total Adults
• Details: Bought last 12 months

Target	Total Sample	Weighted	Vertical	Horizontal	Index
Total	247,024 K	110,322 K	100.00%	44.66%	100
Male	119,259 K	43,406 K	39.35%	36.40%	81 ⬇️
Female	127,765 K	66,916 K	60.65%	52.37%	117 ⬆️

• Vertical (male) = Weighted(male) / Weighted(total) * 100 = 43,406K / 110,322K * 100 = 39.35
• Horizontal (male) = Weighted(male) / TotalSample(male) * 100 = 43,406K / 119,259K = 36.40
• Index (male) = Horizontal(male) / Horizontal(total) * 100 = 81

Part 2: Course 2

• Instructor: Dana Mando

Omnichannel CXM strategy

1. Know your customer
2. Implement consistency across channels
3. Technology in Integration & utilization
4. Address your organization's structure
5. Build strong relationships with your customers

How to create a customer journey map (CJM) - 13 steps

1. Define a clear opjective for the map

You need to be very clear on what your overall goal for the map is. Is it to identify problematic areas in your customer experience? You know that something wrong is happening and you want to pinpoint exactly where that is. Maybe you're noticing a significant decline in profits and you want to get to the bottom of it to be able to fix it and address it. Or perhaps your goal for this map is to identify a new customer group that you suspect can be a huge opportunity for your business.

2. Gather the research

A key step in putting your map together is the research. Your research will give you the information you need to put your map together. Don't base your map on assumptions.

• Do quantative and qualitative data collection methods.

3. Create the buyer persona
4. List all the touch points

A touch point is basically any interaction that happens between a customer and a business. So touch points are basically points of interaction. So when a customer is on your website and talks to an employee through online chat, that's a touch point. When a customer reads a review about your company on Yelp dot com, that's also a touch point. It's basically any encounter the customer has with your business.

• When listing out your touch points, it's very important that you view them from the customer's perspective and not from your own business's perspective.

So, for example, online could be a channel, but online chat is the touch point. A company's channels can include things such as billboards, the company's website, social media platforms, their mobile app and etc. But touch points go way beyond just your channels.

• Touch points also include things that are beyond your organization's control, and it's often these touch points that are beyond your parameters that have the biggest impact and should not be overlooked.

• Ask yourself, how does the customer encounter or interact with the business and list out every single possible interaction from their perspective, not yours.

5. List your organization's channels

Examples of common channels include a store, a website, customer service call centers, social media platforms, billboards and direct mail.

6. List the customer's behavioral stages & goals

Example of Customer Behavioral Stages (+Goal at each stage)

• Stage 1: Research (Goal: To have awareness of everything available)
• Stage 2: Compare Options (Goal: Find the best fit)
• Stage 3: Make a decision (Goal: Commit to one option)
• Stage 4: Use product (Goal: monitor & review)

7. Identify pain points

You need to account for all the pain points your customer is facing.

Part 3: Course 4

• Instructor: Gustavo Escobar Henríquez

Two types of churn:

1. Customer churn rate
2. Revenue churn rate

Is your churn rate fault as a cusotmer success manager?

1. Atracting the wrong customer
2. Terrible onboarding process
3. Not paying attention to your customers (only paying attention to new customers)

There is a journey your customers go through

• You can understand role mapping

Focus on what matter must as a customer success manager

• Find the most important reasons for customer churn

• Customers will not cancel because of something they don't like
• Customers will cancel becuase they can't achieve their goal

According to Harvard business school it is 5 to 25 times more expensive to get new customers than retaining the existing ones

• Think of churn as an opportunity