What is . . . And is Not . . . Segmentation?
American Zoo and Aquarium Association Annual Meeting
Chicago, Illinois
September 16, 2005
Mark Rudzinski
Managing Director
Aeffect, Inc.
520 Lake Cook Road, Suite 100
Deerfield, IL 60015
847-267-0169
© 2005 Aeffect, Inc
Presentation Overview
I. Working Definition of Segmentation
II. Segmentation: A Brief History
III. Why Should You Segment Your Audience?
IV. Methods of Segmentation
© 2005 Aeffect, Inc
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Working Definition of Segmentation
What is Segmentation?
Segmentation . . .
– is a methodical, information-based approach to identifying key
audience groups that share critical characteristics.
– is based on the idea that not all people are the same. They have
different wants, needs and lifestyles and respond to different
communications techniques.
– takes into account many factors that contribute to decisionmaking, including demographics, lifestyles, values, attitudes,
behaviors, motivations and barriers.
– provides basis for categorizing your audience so that you can
make the best decisions about how to serve them.
© 2005 Aeffect, Inc
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Overview of Segmentation
What is Segmentation?
Segment D Segment A
Segment B
Segment C
Undifferentiated whole
Differentiated insight
© 2005 Aeffect, Inc
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Segmentation: A Brief History
History of Segmentation (or Back to the Future)
• Turn of the century (20th, that is):
– Nation of shopkeepers: one to one relationship with customers
– Service, knowledge critical to maintaining relationships
• 1920s - 1950s:
– Mass production, low cost/low margin: profitability = high volume
– Loss of personal relationship with customer, emergence of fragmented
media (radio) introduces demographic segmentation
• 1960s - 1980s:
– Increasingly demanding consumer population, higher expectations
regarding services and product customization (“niche marketing”)
– Increased computing power provides ready access to tools that allow
more sophisticated value/lifestyle and database segmentation
• 1990s - present:
– Database segmentation and marketing, increasingly segmented
communications (satellite TV, web) usher in new era of one to one
relationships, this time driven by technology rather than people
© 2005 Aeffect, Inc
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Why Should You Segment Your Audience?
Segmentation can help organizations make better use of
limited funds to efficiently and more precisely target its
offerings to the different segments that comprise its
audience.
• One size does not fit all or even most
• Effectiveness demands specific focus and relevance to
drive an audience’s action and involvement
• Audience’s frame of reference is more than just museums,
zoos and aquariums:
– Other entertainment/leisure time pursuits are already very
sophisticated in terms of building their communications and brand
experience around the needs of specific market segments
– Drives higher set of expectations
© 2005 Aeffect, Inc
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Why Should You Segment Your Audience?
It can inform decisions about...
Developing Your Visitor/Audience Base
– targeted marketing
– message strategy
– member/donor growth
Evolving Your Brand Experience
– programmatic development
– exhibit planning and execution
– visitor satisfaction
– mission achievement
© 2005 Aeffect, Inc
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Methods of Segmentation
How do you segment your audience?
•
Zoos and aquariums already engage in many forms of
segmentation:
– Most are prospective, in that the organization decides what makes
visitors different and then measures or analyzes data by those
characteristics
– Often based on “convenient” data and descriptions (e.g. visitors vs.
non-visitors, locals vs. tourists, families vs. couples)
– Unlikely to provide depth of insight needed to guide strategic
communications and program planning
– BUT: still represent an entry level opportunity to develop a more
refined understanding of audience groupings
© 2005 Aeffect, Inc
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Methods of Segmentation
How do you segment your audience?
• Optimally, segmentation is built on the qualities and
characteristics that your market determines to be important
and differentiating:
– Organizations cannot determine these prospectively
– Must be based on consumers’ frame of reference regarding your
offering and the values and attitudes they have toward you and the
other competitors in that set
© 2005 Aeffect, Inc
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Methods of Segmentation
How do you segment your audience?
• Optimally, segmentation typically is built off of attitudinal
and behavioral data
Attitudes/Values
– attitudes toward your brand
– attitudes toward competitive brands
– benefits sought from utilization
– personal interests
– preferences
– purchase habits
Behaviors
– usage patterns
– spending patterns
– membership/donor status
© 2005 Aeffect, Inc
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Methods of Segmentation
How do you segment your audience?
• Other commonly collected data (demographics, geography,
share of mind) are typically used for profiling segments:
Demographics
– age
– education
– gender
– presence of children
– ethnicity
– SES
Geography
– urban/suburban/rural
– zip
– local/tourist
© 2005 Aeffect, Inc
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Methods of Segmentation
How do you segment your audience?
• Three questions for determining approach to segmentation:
– What are your organization’s priorities for engaging in
segmentation?
– How are you defining your target audience?
– What is your target’s frame of reference regarding your offering?
© 2005 Aeffect, Inc
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Methods of Segmentation
How do you segment your audience?
• What are your organization’s priorities for engaging in
segmentation?
– Understanding what drives visitation?
– Understanding how to maximize revenue?
– Understanding prevalence of learning styles?
– Other?
• Organizational priority will help to determine prospective
bases of segmentation to pursue
© 2005 Aeffect, Inc
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Methods of Segmentation
How do you segment your audience?
• How are you defining your target audience?
–
–
–
–
Actual visitors?
Prospective visitors?
General population , i.e. the market?
Other?
• Visitors are unlikely to be representative of the market
– Building segmentation on visitor data alone will likely result in a
skewed sense of market attitudes toward your institution
Segment D Segment A
Segment D
Your
Visitors
Segment C
Segment A
Your
Market
Segment B
Segment C
Segment B
© 2005 Aeffect, Inc
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Methods of Segmentation
How do you segment your audience?
• What is your target’s frame of reference regarding your
offering?
– Are you a destination requiring advance planning and financial
commitment or are you more of an activity?
– Who are your “competitors?”
– What does the market consider as alternatives to a visit/encounter
with your brand?
• This must be based on market insight, not visitor insight or
internal conjecture.
© 2005 Aeffect, Inc
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Methods of Segmentation
How do you segment your audience?
• What are some of the widely used methodological
approaches to segmenting a market?
– Qualitative segmentation
– Demographic/geodemographic
– Behavioral
– Attitudinal or psychographic
– Combination of approaches
© 2005 Aeffect, Inc
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Methods of Segmentation
Methods: Qualitative Segmentation
Based on understanding of audience through insight gained
from qualitative techniques--focus groups, in-depth
interviews, dyads, triads, ethnography
• Requires primary data collection effort
• Low to moderate cost depending on use of outside services
and audiences included in the study
© 2005 Aeffect, Inc
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Methods of Segmentation
Methods: Demographic and Geodemographic
Based on understanding of audience through U.S. Census
data or through syndicated marketing information
applications such as Claritas’ PRISM.
• Census data: wide variety of information at county, MSA
• PRISM:
– Syndicated clustering system based on geography, age and SES
– Nearly all U.S. households can be clustered into one of 64 PRISM
clusters, i.e. Blue Blood Estates, Kids and Cul-de-Sacs, Bohemian
Mix
– Can apply cluster code to a data record if ZIP Code (ideally street
address + ZIP Code) is available
– $75/1,000 records with $500 minimum order; additional data can
be purchased by PRISM code level
© 2005 Aeffect, Inc
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Methods of Segmentation
Methods: Behavioral
Gaining audience insight through analysis of behavior data
gathered on visitors; also known as data mining:
• Substantial potential to extract rich insight on your visitors,
from diverse sources such as: traditional visitor studies,
revenue data; membership data; donor data
• Primarily utilizes existing data that your institution is
collecting for other purposes; however, can marry this data
to PRISM to append additional descriptive data and
understand how different PRISM categories relate to your
visitor experience
© 2005 Aeffect, Inc
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Methods of Segmentation
Methods: Attitudinal or Psychographic
Gaining audience insight through measurement of various
values, attitudes, knowledge and beliefs about your
institution and its competitors
• Requires extensive primary data collection effort either
among visitors, or optimally, among the general population;
also requires access to resources that can do multivariate
statistical analysis
• Requires fairly significant insight into target audience in
order to ensure that the questions being asked will yield a
relevant and actionable segmentation
© 2005 Aeffect, Inc
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Overview of Segmentation
Summary of Approaches
Qualitative
DEFINITION In-depth, non-quantitative insight
METHODS
Focus groups, IDIs,
dyads, triads, ethnography
BENEFITS Helps to understand
the why? Rational,
emotional benefits, values
LIMITATIONS
Not quantified,
highly subjective,
requires skilled
interviewers
Geodemographic
Behavioral
Psychographic
Combined
approach
multivariate
Census data
visitation, volume
of use, etc.
attitudes, values, etc.
All of the
above
US Census
PRISM,
ACORN
internal data
visitor & market
data
visitor & market
data
market description
at household type
level
rich insight into
visitor activity, but
not attitudes or
decision-making
reveals visitor
& non-visitor attitudes,
perceptions, values,
decision-making
marries attitudes,
behaviors & demos
to yield actionable
audience segments
expensive to acquire
additional data,
no museum category
insight, not
institution-specific
requires
sophisticated
info. sys. to mine,
analyze & model
requires more
sophisticated data
collection, may not be
actionable if based
only on attitudes
requires
sophisticated
data collection
& analysis
© 2005 Aeffect, Inc
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For more information, please contact:
Mark Rudzinski
Managing Director
Aeffect, Inc.
847-374-3074
mrudzinski@aeffect.com
© 2005 Aeffect, Inc
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