Talkin’ Bout My Generation Segmentation
Not my song. Not my generation. I’m one removed from the rock and roll of the self-centered “me” generation. I grew up way back in the day when MTV actually showed videos and I don’t recall seeing anything much from The Who. The point is I know the song, but I can’t identify with it, it doesn’t resonate with me. There’s no need for me to live in someone else’s past. Use that song in a commercial and I probably tune it out. Grab a song from the 80’s that I like and I might take notice. Pull something else into the ad like people my age, activities I like, an environment I can relate to, maybe a well know actor or line from an 80’s movie that Boomers and Millennials won’t get, make it entertaining, and I’ll pay attention.
It’s a fairly basic concept; simply show your target market using your product, and they’ll take notice because they can project themselves into the circumstance. But to really resonate your marketing needs to do more than just create a mental picture or association; it needs to communicate a level of understanding so that your target market says “yea…they get me”. So how do you do that? Your best guess? Trial and error? To barrow a word from a much much older generation, that’s “tomfoolery”. (I don’t think I resonated with anyone with that word choice). But to my point, research is how you get there, in particular segmentation research.
As marketers we love segmentation. Several years ago, I don’t know when, sociologists started segmented society into generational cohorts and named them. It’s still largely a work in progress. Prior to writing this post I researched multiple sources to find a solid definition of the start and stop years for each generation and learned that not only are the names different, but that nearly every credible source disagrees on the established dates for every generation after the Baby Boomers.
While useful, generational segmentation is only a start. The “one-size-fits-all” characterization doesn’t really work for a sizable percentage of each generation. Some even say generations should be defined by attitudes rather than years since attitudes change over time and people from older generations sometimes adopt the characteristics of younger generations and vice-versa.
There is a need to go well beyond generational segmentation in order to truly create a marketing campaign that resonates. This is where surveys, focus groups (in person or online), MROCs and other marketing research methodologies come into play. Once the research has been done we can move away from general assumptions and into data that more accurately defines who your customers are. If the data is quantifiable we can even preform cluster analysis and develop detailed profiles of each customer segment.
Understanding generational differences is an important element of marketing. Multiple books have been written on how to effectively market to the attitudes of each generation. And while there is a lot of value in knowing these differences, there is far more value in knowing and understanding your customers, your potential customers, and how to speak their language. Good segmentation research accomplishes this.
First, in case you’re not familiar with what an MROC is, it stands for Marketing Research Online Community. The format and interaction is somewhat similar to that of Facebook. A little like a focus group and a little like a survey panel, the platform provides for interaction and sharing between a moderator and participants. The moderator asks questions or assigns tasks and the participants respond. The insights gained from this research tool are rich and powerful. Below are six reasons why this is the case.
Deeper Insights. Like a focus group an MROC provides an opportunity for the moderator to ask follow-up questions and for participants to comment on what others in the group have said. It is from this type of interaction that the deepest insights are often obtained and unanticipated discoveries come about. The ability for participants to share pictures, video, and interact with other media in an MROC adds to the level of insight that goes beyond what most other research methodologies offer.
Eagerness to Share. Take a moment to think back a few years, maybe a lot of years, like way back to when you were in kindergarten. One of the first lessons you reluctantly learned was sharing. Fast forward a few decades and sharing has become a necessary part of life. We share a lot, sometimes still reluctantly, but we do it. However, when it comes to sharing our opinions we are eager to do so, especially online. We like this type of sharing. In fact we seek out opportunities to let people know exactly what we think, what we saw at the store, if we like what they shared with us or not, and to post cool photos of our pets, children, or our most recent vacation. If the participants are genuinely interested in the subject at hand, they will be more than eager to share their opinion and become actively involved in the study. The result is better responses, jam-packed insights, and possibly a lower incentive required to get people to participate.
More Realistic Insights. I love focus groups, I’ve moderated many myself and firmly believe in their value. However, focus groups aren’t always reflective of reality. With a focus group we throw together a group of strangers who have never met and then ask them to make snap judgments about a product or service they likely have never seen before. The situation is unnatural. I’d like to think that everything focus group participants say is what they truly believe, but I know that that isn’t always the case. With an MROC participants are given time to think. Sometimes feedback from quick first impressions is preferred, but in life, unless you are buying a package of gum at the checkout stand, more often than not we take time to think about our decisions. MROCs allow participants the ability to think at their own pace before giving responses.
Greater Anonymity = True Opinions. I recently completed an MROC where only about twenty percent of the participants chose to upload their profile picture. The use of your real name is typically optional. The ability to hide behind the anonymity of the internet is one of the reasons people readily share their true opinions online. For example, the music video by sixteen year old high school student Rebecca Black titled “Friday” has gathered over 57 million views on YouTube. From that statistic it would be easy to assume that most everyone likes her video, but take a closer look and you will see an 80% thumbs down. With lyrics like “Tomorrow is Saturday and Sunday comes afterwards” it’s not hard to see why. Personally, the video is not my cup of tea, but kudos to her for being bold enough to try. The song is catchy and like it or not you will sing it in your head after watching it. I’m going to guess that if Rebecca Black was to personally ask people if they liked her video, most everyone would politely reply that they did, even strangers, because of the social pressure that the situation creates to be polite. However on YouTube it’s a different story. The internet allows us to be anonymous. The social pressure to conform is mostly negated and consequently people more easily express their true opinions then in focus groups.
Committed Participants = Better Insights. The number of people who participate in an MROC can vary in size from a dozen to upwards of 1000 or more, but in my opinion MROCs that are on the smaller end of the spectrum provide deeper insights. When someone is part of a small group that is asked for their opinion they feel like an insider, they feel influential, they think more carefully about their responses because they feel that their opinion counts more than if they were part of a large group or survey.
Backroom Interaction. If you have ever observed a focus group you know that participants sometimes make a comment that you want explored further. Sometimes the moderator follows up on these comments, but not always. Of course with surveys there is no chance for follow up. Because an MROC takes place over several days, weeks, or even months, there is ample time for the client to review responses and ask the moderator to probe further or open a new discussion on any fresh insights.
I need to preface this entry with the caveat that it is about 80% back story and 20% marketing research. Usually I like it to be the other way around. That being said, enjoy getting to know a slice of my life called “running”.
I am one of the most healthy, yet at the same time, unhealthy people you will meet. I exercise six days a week, jogging or bike riding three of those days and lifting weights the other three. I follow my morning exercise routine up by drinking a V8 and eating some sort of whole grain cereal or oatmeal topped with flax seed, chia seed, or some other healthy supplement. I chase that down with a GNC Ultra Mega Greens Men’s vitamin.
I then head to work where by about 10:00 I am ready for lunch. To keep my hunger at bay for a couple of hours I eat, not a banana, apple, or celery stick, but typically candy and/or chips (more often ‘and’ than ‘or’). In fact I have an entire drawer in my desk dedicated to unhealthy food. Occasionally you will find almonds or fruit leathers in there, but it’s mostly salty, sweet, full of high fructose corn syrup and red 40. I’m sucking on a lemon drop containing the delicious ingredient “yellow 5” right now as I wright this. In my snack drawer you might even find Gushers if you’re lucky. Yes Gushers, those chewy fruit snack pouches that are marketed to elementary age kids as a school lunch snack are possibly my favorite.
In order to compensate for my sweet tooth and avoid putting on extra pounds I have
recently increased the distance that I typically run. I used to only run two or three miles each day that I ran, occasionally stretching it to four, but lately I have stepped it up just a bit to three to five miles. I did run a marathon once and made a solemn promise to myself during the race that I would never do it again. That was at age 35. Other than that I’m not really a long distance runner. I’m now age 43 and steadily slowing down each year. I know this because I’m a marketing research nerd. I track and analyze everything, and for the past thirteen and a half years I have kept track of how long it takes me to run a two-mile loop in my neighborhood once each week. I haven’t just written down my times, but I have kept multiple graphs in a spreadsheet to analyze my progress, or lack thereof. Below is the rout I run.
The result is the sad but expected proof that I am in fact getting older each year and as a result slowing down. My thirteen and a half year experiment is a near perfect demonstration of the effects aging has on our physical capacity. There is no question that I was faster and in better shape at age 30 than age 43. My fastest time thus far this year is not as fast as my slowest time thirteen years ago.
However, my experiment is done. In July we moved to a new house. It’s a bigger nicer home in a great neighborhood, but I miss my old jogging routs. Even if I was to find and run a new two-mile loop, the distance would likely be off by just a bit and the elevation changes wouldn’t be the same. The comparison may be close, but the external variables would be different. It wouldn’t be a valid comparison. For any tracker to be valid all variables must be held constant. As clearly demonstrated from my experiment, and seen in the graph, even the time of year can play a big influence. I am always in my best shape in the summer and my worst shape in the winter.
One of the mistakes marketing researchers often make is not controlling for these variables, taking them into account in the analysis, or acknowledging them. It may not always be possible to control everything, but at the very least any external variable should be acknowledged and accounted for.
This video https://www.youtube.com/watch?v=Z3AtVgiYKd8 shows three men walk straight up to 15 hungry lions and steal part of their kill. It completely puts to shame all videos of people swimming with sharks, making the shark swimmers look like wimps by comparison.
When I first saw this video I gave the men who did this a 10 for bravery and a 10 for stupidity. Then I thought about it a bit and wondered if my rating was unjustifiably high, not for bravery, that one sticks, but for stupidity. These men didn’t do this on a dare, they didn’t do it out of desperation, they didn’t do it just to find out if it would work. Impressing a local girl may have been a factor, but regardless, they knew exactly what they were doing and how to do it. They understood perfectly the risk and the reward. With everything at stake they planned their move carefully and then executed it with strategic precision.
Strategic Insight is the term we use to describe the knowledge a company has that allows it to make good tactical decisions. Decisions that ultimately result in increased market share, greater profitability, and eventually enough money to take the entire company on an African safari to watch people like Rakitha intimidate lions in person.
Companies that lack Strategic Insight are content to push onward at a comfortable pace feasting on beans and rice instead of a nice juicy wildebeest stolen from a pride of hungry lions.
So how does one acquire Strategic Insight? It isn’t something that comes without effort. The kind of Strategic Insight that enables companies to leap ahead of their competition isn’t achieved in an hour long brain storming session with department heads. The type of Strategic Insight that has the potential to vault your company to the next level is best discovered by seeking it from those outside your organization.
Have you ever tried to read a sticker on a glass window or bottle from the inside looking out? It’s difficult and takes a while. Take a piece of paper sitting next to you right now and hold it up to a light with the blank side facing you and the printed side facing the light. Start reading, you can do it, your mind is smart enough to figure it out, but it’s a slow process, you probably had to flip the paper over a couple of times because you weren’t exactly sure what a word was.
Most organizations are unqualified to develop true Strategic Insights internally because they are too close to their own products and services to see what their customers see. They have been involved too long and are in too deep. In essence they are inside the bottle or building looking out at the back side of the label. Their customers are on the outside looking in. Each are looking at the same thing from a different perspective. Their customers know exactly what the label or piece of paper says because it’s facing them. The company thinks it knows what it says because, after all, they created it. But they don’t have the same perspective their customers do.
Marketing Research is what enables companies to see their products and services as their customers do. The result is better understanding and the outcome is Strategic Insights.
One final example. The world of sports is full of teams seeking Strategic Insight on their completion. One of the first things most professional teams do in order to get ready for an upcoming game is to view videos of their opponent. They study their competition carefully and strategically analyze their opponent’s weaknesses and strengths in order to learn how to defeat them. Unfortunately in business not all companies follow the mindset of a professional sports team. Instead they rely on their internal efforts alone. They can come up with ideas that might work, but without leveraging the insights that come from studying their competition they will only come up with ideas, untested ideas. Ideas can be good, ideas can be bad. Strategic Insights are more than ideas, strategic Insights are knowledge, the kind of knowledge that can only come from the outside in, the kind of knowledge that can only come from marketing research.
Contrary to the spelling of its name, the Ratufa isn’t a “rat”, it’s a squirrel, a “very large tree squirrel”, according to the ultimate authority on squirrels, Wikipedia. There are four species of the genus Ratufa living in Southeast Asia…and that’s about as exciting as it gets. If you want to see a Ratufa, also known as an Oriental Giant Squirrel, in action, follow this link to a YouTube video of one eating a cookie. (The logic of how this “exciting” video has over 16,000 views escapes me).
In the Branding World, Ratufa is something different. Each letter, R.A.T.U.F.A., stands for one of six fundamental components that I believe are critical to a solid branding strategy: Relationship, Anchor Belief, Trust, Unique Selling Position, Focus, and Authority.
Relationship. Branding is about relationships. The relationship you have with your target audience. Just like in real life, relationships take time and patience. And just like in real life, this relationship must be worked on….constantly. Regular communication with your target audience lets them know how much they are valued. This connection is critical in order for them to feel comfortable and have trust in your brand, but also in order for you to understand them, their likes and dislikes, preferences, satisfaction, etc.
Anchor Belief. This is your brand’s “big idea”. The center of you brands universe. Everything revolves around, focuses on, and refers back to your brand’s anchor belief.
Gatorade is one of the more well-known brands in the world. When I mentioned it you instantly associated it with sports, likely football, track, or basketball, along with images of highly skilled and determined athletes drinking colorful Gatorade and the lightning bolt on the side of the bottle. But you have probably never heard of Gatorade’s anchor belief/big idea; “The will to win in a bottle”. Now that you know it, it’s clear how everything the brand does revolves around that single idea. It’s not a very catchy tag line, so it never flashes across the screen at the end of a commercial, but its message is communicated perfectly to the target audience. Once your target audience connects with your anchor belief, it becomes much easier to get them to buy whatever it is you are selling.
Trust. The marketing world has literally shot itself in the foot on trust. The myriad of unsubstantiated claims makes it simply impossible to believe what any company says about its brand. That is until they have earned your trust. Trust is about being authentic and real. Social media has made brands more transparent than ever. Try and pull a fast one and your toast. Try to hide your brands flaws and they will be found. Want to be seen as more authentic? Don’t try to be something you aren’t, don’t be afraid to admit a weakness, genuinely support a cause your target audience believes in, and most important, deliver on your promises. Nobody‘s perfect. No brand is perfect. No one expects perfection. Everyone appreciates honesty and authenticity. Sync your brands values with the values of your target audience and you will build trust.
Unique Selling Position. There is perhaps no better measure of a brand’s strength than its Unique Selling Position (USP). Closely related to an Anchor Belief, your brands USP is what sets it apart from the competition. It is a claim that is yours alone. No other brand can offer it. It is your Anchor Belief put into action. Your USP communicates to your target audience the primary benefit of choosing your product or service over that of the competition. It positions you in such a way that your target audience sees you as both different and better than the competition.
Focus. Focusing your brand’s message gives it clarity and strength. It also means not going after absolutely everyone who might possibly use your product or service. When you go after everyone, you weaken your connection and relationship with your core target audience (your best customers). They feel ignored. People respond when the message your brand sends resonates with them. Exercising a measure of restraint by not trying to be everything to everyone creates focus. If you need to have two or three different USP’s than maybe you need two or three different brands.
Focus also creates consistency. Consistency builds confidence. Everything about your company right down to the color of the tile on the floor of the janitor’s closet must be a consistent reflection of your brand. When everything is consistent, your brand, and everyone in your company, is focused on its anchor belief.
Authority. Authority is about proof. Repeat customers may not need proof but attracting new ones requires it. Authority is earned. Often slowly. But bit-by-bit it builds through customer recommendations, likes, posts, awards, etc. Once established as an authority, everything a brand does is instantly credible. People pay attention and sales happen.
Brands develop over time, like taking care of a vegetable garden. Brand development is more a process of working hard at nurturing and cultivating a healthy environment for your brand to grow than trying to force quick results. Sure there’s much more to branding than the six core components discussed here, but get these six right, and your brand will develop into something extraordinary.
Every so often I’ll come across an article, blog post, or book that resonates my own thoughts or viewpoint on a subject almost perfectly. This was the case with “Brand Against the Machine” by John Morgan.
For me, the book simply put into words much of what I already believed about branding, and did it in a way that made perfect sense. John takes perhaps the most discussed marketing topic on the planet and delivers a refreshing perspective.
As I was reading I found myself highlighting sentence after sentence and paragraph after paragraph. Probably enough for a 365 page “Brand Against the Machine” quote of the day calendar. Below are two-dozen of my favorite “bite-sized” quotes. Some are a little out of context, but as long as you keep branding as the subject in mind, you should be okay. Oh yea, and I highly recommend purchasing the book. Even if one of your self-proclaimed titles on LinkedIn is “Branding Guru”, you will learn something. Maybe even that being a “self-proclaimed” guru of anything is lame and worthless unless you can actually back it up with reality and proof. Enjoy.
- Your goal is to position your brand in the mind of the consumer as one of, if not the, top authority in your industry, to be seen as a valued resource rather than another service provider.
- At some point your competition will match you. The only element they cannot match is your brand. There are a lot of business that make shoes. There is only one Nike.
- Branding is what makes me drive past a Kmart while going to Target. They sell the same stuff, for the most part. But I have a different perception of each of them. My trust level is different for each of them.
- Keep in mind that you don’t need to be found everywhere, as traditional branding would suggest. You just want to be found everywhere within you niche, everywhere your audience is hanging out.
- When you’re trying to get your message in front of everyone, you end up causing your target market to feel ignored. They want to know you’re speaking directly to them.
- When your message is focused and directed toward a certain group of people, those people respond. They respond because they realize it’s for them. That’s the kind of attention you want.
- Proof is what makes you an authority. Information is like a new form of currency. The more information you share, the more you’ll be positioned and viewed as an authority. Bringing new ideas to the table and people acting on those ideas: that’s proof.
- Something magical happens when your audience finds your content to be genuinely helpful: They trust you. They value your message and thoughts. Now they will buy form you and be excited to do so.
- Your brand’s anchor belief is your brand’s philosophy or viewpoint. It’s a big idea that is the focus of all of your products, services, marketing, presentations, and any other element of your business. Its premise becomes the backbone of your brand.
- You must be completely focused on your anchor belief. It helps define your brand and gives prospects clarity about you. This is why it’s absolutely critical to ensure your philosophy and message is a part of all you do, whether that be a marketing campaign, video, blog post, product, webinar, or presentation.
- It’s easier to get someone to buy into your philosophy and anchor belief than it is to buy a product. Once they’ve bought into your philosophy, it is super easy to sell your product.
- What’s your story? Your target audience is asking that question. How well you tell your story matters. Your creation story of how you got to be where you are now, both in life and the creation of your business. People love to know how something came about and how it got started.
- If the only people who would really miss your business if it went under are either related to you or your closest friends, you may have a “boring” problem. Don’t misunderstand me. It’s not that you can’t be a dentist or sell shoes or do something that others do. It’s that you can’t do those things in the same way as your competitors and hope to have a brand that people feel like they need to feel complete. Identify what makes you different.
- Taking care of people when there isn’t a problem and when it’s not expected is a sure fire way to generate positive word of mouth. Helping people who are in a jam will do amazing things for your brand.
- If you want your brand to be a huge success, developing a strong relationship with your target audience is a must. Have patience. Let the relationship mature. Frequent communication with your target audience lets them know that you value the relationship. It allows you to get to know them. How can you serve and provide value to your customer if you don’t even know them?
- Anyone can copy what you do, but few can copy how you do it.
- Often a great USP (unique selling point) says what you do that others are afraid to do.
- Most business fail to maximize on their brand touch points. A touch point is simply any form of contact someone has with your brand. It can be an e-mail, conversation with an employee, direct mail piece, commercial, or blog post. Understand that every touch point counts, no matter if it’s big or small.
- When your audience sees that you share the same values as they do, you begin to build a level of trust with them.
- Nothing creates a stronger bond than an “us versus them” mentality. You want to create a feeling that they are part of a larger “us.” Position your brand and its fans as being against “them.”
- If you want someone to be a fan of yours, start by being a fan of theirs. Treat your brand advocates like rock stars—because they are.
- Consistency builds confidence with consumers. It shows you are a brand people can rely on. A brand that if they put their trust into, you won’t let them down.
- Every element of your business supports your brand or tears it apart. Employees are no exception to that. They represent your brand on and off the clock.
- The number one thing you don’t want is for people to be indifferent about your brand.
This is just something worth sharing. While I think their signature graph about the Wealth & Health of Nations is the coolest, it’s fun to mess around with and select other variables as well. What amazing progress mankind has made over the past 200 years. GapMinder.
Once upon a time people believed that there was no such thing as a free lunch. Still true, perhaps, if you’re someone like me who over analyzes everything. But back in 1975 when Nobel-prize winning economist Milton Friedman popularized the phrase with a book by the same title, the world was very tangible, tangible is expensive. Today the world is digital, digital is cheap, and as a result free is everywhere. How much are you paying to use LinkedIn? How many apps on your phone didn’t cost you a dime? Do you Skype? Do you use Dropbox, flickr or Hulu?
Sometimes a freemium marketing strategy works, sometimes it doesn’t. I’m a big fan of freemiums, but to work they need a properly executed strategy or you will end up cannibalizing your existing product, cheapening its value, or even destroying your brand. Here are ten keys to making your freemium pay.
1- First consider: Does it make sense to even offer a freemium? For many businesses it doesn’t. They simply don’t have a product that lends itself to the strategy or they have a target market that would be turned off by it. However, think carefully before dismissing this strategy. Even if you have a high ticket product there may be some element that you may wish to consider giving away for free.
2- Go digital. Your freemium doesn’t have to be digital, but the most successful ones are. Digital is cheap. If you can’t offer anything digital consider giving away a service.
3- No strings attached. The quickest way to kill your freemium is to be deceptive. Most people are smart enough to spot something bogus or something that requires them to jump through too many hoops. Your potential customers are going to leave as soon as they realize that your freemium comes at a price, even though it may not be a monetary one.
4- Your freemium must have “stand alone value”. In fact, the value should be so enticing that the vast majority of your users will likely never migrate to a paid product. Of course having them stay at the free level isn’t the objective, but this is a numbers game. The more freeloaders you have the more you will ultimately have at the paid level.
5- Have an easy next level product. Getting people to jump to the next level is the whole point of offering a freemium. However, if the next level is your core product and your core product isn’t a cheap $2 app, but something a little on the expensive side, consider a low-end offer that costs a little, but is less expensive than your core product. Your customers may need to realize ROI if they are going to move to the next level. This low-end offer should also under promise but over deliver. This isn’t going to be a big money maker, but rather a way of advertising to the best and most targeted market of eligible buyers you’ll find.
6- Don’t forget to offer a premium. There is almost always a small sliver of customers that want absolutely everything you can offer them and they are willing to pay for it. If you don’t have a platinum/deluxe level, you’re losing money.
7- Realize that a freemium is a marketing expense. Just like buying a radio ad that only a small percentage of listeners will pay attention to and an even a smaller percentage will take action on, a freemium is advertising and needs to be viewed from that perspective. You wouldn’t expect to run an ad on a radio station with 20,000 people listening and have 10,000 of them buy your product, so don’t expect a freemium to have that kind of conversion ratio either.
8- Have a strong next level offer. Your freemium needs to be strong, but your paid offer needs to be stronger. If there is no reason to jump to the next level why would anybody do it? Users need to see the value in paying for something more. Furthermore, make sure the differences between free and paid are clearly discernible. This is something that should be understood upfront and not delivered as an unpleasant surprise later.
9- Think carefully before monetizing. You have to make money off of those freeloaders somehow right? But is the purpose of your freemium to advertise or to get people to the next level? Monetizing may make sense; especially if your offer is digital, just make sure it doesn’t undercut the value of your freemium.
10- Close the gap with research. There will always be a gap that exists between those that get a free lunch and those that pay for more. With a freemium the percentage of people who end up paying will be small, typically less than 5%. But there’s a way to up that percentage and close the gap, it’s called research. This may be last on my list, but it’s the first thing you should do. Research answers questions such as: What features are going to entice your customers to the next level? What can and can’t you leave out of your freemium and still make it work? What pricing structure should you adopt for your paid levels? How do users of your paid service and free service differ? And how can you find more users who are like the ones who pay and less like the ones who don’t? Carefully designed questions to a focus group or survey of your target market will help you find the answers.