Market Segmentation Market Segmentation Lifelong Learning 2007 Presented by Greg Marsello
Dec 22, 2015
Market SegmentationMarket Segmentation
Lifelong Learning 2007
Presented by Greg Marsello
We Must Segment the MarketWe Must Segment the Market…80/20 Principle…80/20 Principle
Why Segment the Market?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 Problems Caused by NOT Identifying Primary Market SegmentsPrimary Market Segments
• Ineffective program selection• Wasted promotion dollars• Decrease in repeat rate• Reduced operating margin• Wasted staff time
Market SegmentationMarket 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 ParticipantsChart 1: Organization Participants
More Recent Less Recent
High Dollars/Activity
25%Highly active
25%Higher dollar/
activity, but notrecent
Low Dollars/Activity
25%Recent, but not
high dollar/activity
25%Least active,
not recent, nothigh dollar/
activity
Chart 2: Net IncomeChart 2: Net Income
More Recent Less Recent
High80%
from mostactive
25%
Low25% -30%
from leastactive
Chart 3: Chart 3: Organization ResourcesOrganization Resources
Time
25% here.This group isunderserved.
25% here.Okay.
Money
25% here.Okay.
25% here.Wasting timeand resources
here.
Chart 4: Chart 4: Efficiency StrategyEfficiency Strategy
Staff Time
Money
Finding Your SevenFinding Your SevenPrimary Market SegmentsPrimary 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 SystemIdeal Software System
Mailing List Word ProcessingRegistration
Brochures
Financial Statements
Marketing Analysis
Room Location
s
Financial Analysis
Master Data FileCustomer
Demographics History
Finding Your SevenFinding Your SevenPrimary Market SegmentsPrimary 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
Recency
Moneta
ry V
al u
e/A
ctiv
ity
Know Your Participants & Allocate Know Your Participants & Allocate Resources AccordinglyResources Accordingly
Finding Your SevenFinding Your SevenPrimary Market SegmentsPrimary 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 DemographicsCritical Customer Demographics
• Geography*• Age*• Sex• Formal Education
Community Courses/Events
Critical Customer DemographicsCritical Customer Demographics
• Geography• Occupation*• Job Title• Age*
Continuing Professional Education
Critical Customer DemographicsCritical Customer Demographics
• Geography• Age• Sex• Formal Education• Race/Ethnicity
Credit Courses
Finding Your SevenFinding Your SevenPrimary Market SegmentsPrimary 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 ExamplesDemographic Analysis Examples
Age Example 1 Example 218-20 20 1021-25 20 7026-30 20 3031-35 20 2036-40 20 4041-45 20 1046-50 20 1051-55 20 556-60 20 561-65 20 0
Example of Analyzing Example of Analyzing Demographic VariablesDemographic Variables
CPE, Seminars, Conferences & Other Work-Related Events
Example 1 Example 2Aerospace (3812-01) 2 16Ambulance Services (4119-02) 4 9Architects and Related (8712) 23 12Attorneys (8111-03) 17 9Bookkeeping Services (8721-02) 15 6Bldg. Mat’l Suppliers (5211-26) 2 8Carpet/Rug Cleaners (7217-04) 5 5Consulting Companies (8742-01) 16 11
Example 1 Example 2Computer Consult. (7379-05) 8 20Convenience Stores (5411-03) 2 9County Gov’ts (many) 1 14Engineers (8711) 14 10Hospitals (8062-02) 7 11Insurance Adjusters (6411-02) 2 12Landscape Contractors (0782-04) 1 9Nail Salons (7931-02) 16 8Printers (2752-02) 4 6State Government (many) 12 16Tractor Dealers (5083-04) 0 9TOTAL 200 200
LERN’s Market SegmentsLERN’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 SegmentsLERN’s Market Segments
1. Universities2. Community Colleges3. Associations
– Associations were 1% of LERN customers; decision made to grow segment; 20,000 U.S. associations
4. Parks & Recreation
5. Public Schools6. Colleges & Schools within Universities
– Broken out from university growth focus
7. Technical Institutions– Broken out from community colleges to
give priority
Finding Your SevenFinding Your SevenPrimary Market SegmentsPrimary 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 DataWays to Collect Demographic Data
• Registration Form• Phone Registration• Mail Survey• Confirmation Card/Letter• First Meeting• Contact
Finding Your SevenFinding Your SevenPrimary Market SegmentsPrimary 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 7 Primary Market Segments
Segment1
Segment2
Segment3
Segment4
Segment5
Segment6
Segment7
DivisionD
DivisionB
DivisionF
DivisionA
DivisionC
DivisionG
DivisionE
Using Segmentation DataUsing 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 Let LERN Determine Your 7 Primary Market SegmentsPrimary 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!Thank You!
[email protected]@lern.orgorg