Use Demographic Segmentation Tools Not Only For Marketing

Filed Under Creative Marketing, Ruminations, Consumer Behavior | Leave a Comment

People always fascinate me: different lifestyles, different backgrounds, different races and different behaviors. I never get tired of observing more and more about what drives them, what makes them engage in certain activities and what happens afterwards once “the pot gets stirred” skillfully by social trends or sometimes by actions of fellow-marketers.  Simultaneously, this entire process serves my own purpose as a consumer of the environment I want to be in. What I find myself doing is segmenting the “market” of a social event or a city to see what experiences I can have as a consumer of a social interaction. Perhaps, all of us do that. And yes, nothing beats the hands-on approach of going into the “field” and actually experiencing all the combinations in that or this zip code yourself.  But, as they say, being forearmed is half the victory.

So, while thinking about potential move to a bigger city like San Francisco, Chicago or New York (with all the benefits we already know), I find it useful to utilize PRIZM or other demographic segmentation tools to see the degree of how those cities can be attractive to me based on the social crowd.  And it might not be the news as we all have learned about the stereotypes, and some, are, granted valid in describing what to expect, I still believe it pays extra to dissect the population into more statistically accurate attributes. By doing this, you can predict the quality of your social life, professional success and other experiences based on the patterns discovered. As consumers, at least here in the states, we became very sophisticated and educated at what we want, like, dislike and how it should be served. Sometimes, this thought scares me when I feel like I have to look for niche-services already since I know what works well.  Sometimes, I wish I were as open as a child - when simpler choices were of existence.

Going back to the segmentation tools, as an example, I wanted to first validate the accuracy of experiences I had in Seattle and only then quick-check the potential Chicago can provide. I also wish that US. Census got more up-to-date and more detailed reports, as most of the information is based on 2000 reports - Hello?! It has been almost a decade and people moved, changed in proportion due to natural causes considerably since then.  Thank God, we have commercial software that can solve those problems and allow us see the light or to be precise the stripes on the map.  What if you do not have access to this information through those tools? Again, US Census or city-data.com site can provide you with rough but workable ideas on the demographics (alongside some extra ads).  Example, for Bellevue showcases graphs on gender distribution, age, income and housing situation and I must say it is very close to accurate even if the site uses 2000 census data and 2005 projections. 

But, what I found most exciting is the information on foreign-born residents (remember, one of the attributes of the social mix I was looking for?), it provides a neat chart as well! It describes the following distribution of nationalities (hence potential social interactions flavored by cultural attributes): 

  • Mexico (13%)
  • India (10%)
  • China, excluding Hong Kong and Taiwan (7%)
  • Vietnam (5%)
  • Korea (5%)
  • Russia (5%)
  • Ukraine (4%)

Information like that can provide me with insights on how diverse the locality is and will the mix be appealing to my social taste?

Digging deeper, there is always PRIZM, a tool that can share the details on lifestyle preferences.  According to the report on my zip code, the groups are: 44% New Beginnings, 22% Young Influentials, 21% Gray Power, 19% Home Sweet Home and 8 % Executive Suites.   If we take Young Influentials into consideration, the tools describes the segment as ” Midscale, Younger without Kids yuppies that reflect the fading glow of acquisitive yuppiedom.  Today, the segment is a common address for younger, middle-class singles and couples who are more preoccupied with balancing work and leisure pursuits. Having recently left college dorms, they now live in apartment complexes surrounded by ball fields, health clubs and casual-dining restaurants. ” It also goes into the details of: median income ($47,976), lifestyle traits (plays racquetball, drives mazda 3), demographics traits (suburban crowd, midscale income, age < 35, mostly renters without kids, college graduates, mix of ethnic groups). Very neat tool! You can definitely learn much about your audience! How about a Lifestage group? “Young, hip singles are the prime residents of Young Achievers, a lifestage group of twentysomethings who’ve recently settled in metro neighborhoods. Their incomes range from working-class to well-to-do, but most residents are still renting apartments in cities or close-in suburbs. These seven segments contain a high percentage of Asian singles, and there’s a decidedly progressive sensibility in their tastes as reflected in the group’s liberal politics, alternative music and lively nightlife. Mainstream Singles segments are twice as likely as the general population to include college students living in group quarters.”  Each segment shares this level of granularity. Now, knowing all that does make a difference while making a decision where to live, work and play!

Too much information? If all that is too overwhelming, you can always turn to wikipidea that will outlay lightly some of the basics!  

Online Lifestyles Are a Norm? Yes, They Are!

Filed Under Online Marketing, Digital Marketing, Consumer Behavior | Leave a Comment

December is always a special month for me as it is a time when all the checks and balances occur, when all the moments of the year are revisited in memory again - relived, pondered upon and signed off as lessons and discoveries. It is also a time for predictions, wish lists and anticipation! So with the respect to my passion for marketing, I am contemplating on the passing year with a reflection on online lifestyles or call it digital lifestyles that became a norm. Little by little, our activities move online: online shopping, online banking, online dating, online networking, online socializing!

According to the Stanford University study on Internet Usage Report, published in internet stats, “the longer people have been web users the more hours and the more activities they report engaging in. While self-selection may be playing a role with early adopters, the data strongly suggests a model of social change with not only a growing number of Internet users, but with web users doing more and more things on the internet in the future.” Though, I am not sure about the number of respondents and who they were, since according to the chart -if you have been online for 5 years, your average usage hours per week can be close to 9. Well, I totally can see myself spending 30 hours per week, excluding business hours, though I discovered internet in 2000 only (yes, I know it is late, but try to keep me from it now!)

Paid search is getting on the top hot list and though it is not a new way to reach our customers, it is the most profitable and on the target! Why not to love it? You pay for actions, purchases or performance. Besides it is so interwoven into everyday’s consumer behavior – no wonder it works! If I think about all the new things I want to buy, learn and get to know – what do I do? – I go online and search. And if before I was only paying attention to unsponsored results, now if it comes to the specialized services in the area– I prefer paid links. My rationale comes from the following – those folks might be mature and sophisticated enough to advertise online, thus the service /or business they are in – is taken seriously. What did people do before search engines? Yellow pages…did work well then with the phones. Now, we want to do everything online – as the majority of us is there 24/7.

Peer reviews, consumer reviews and any bad experiences – I look for those as well before I buy. This brings us to the second nominee on the list – social networks where people interact and recommend stuff. Social networking became so everyday-vital – almost like email. And even though for online and “everything internet” skeptics it =(being online 24/7) might seem too over the board or a sign of no life (remember, second life – no life cartoon?) – Online lifestyle is a norm. On the contrary, the majority of people on social networks are the most extraverted –social folks that stay in touch with far more people at a time than one could imagine long time ago before internet. It is also a great opportunity for the introverted to express more, to share more and to be surrounded with the personalized attention without the overbearing voice of extraverts! And thus, with the increase of time we spend in our networks, with the ease we express our wishes, share the knowledge - we bring our lives online and plant very obvious patterns of our daily consumption. What are the greatest opportunities are those for online advertisers! They can cater to us personally – with all the data that has been collected about our daily habitual interactions.

Rich media would be the third favorite of mine – acquiring hearts, eyeballs and attention span of millions of people. Sharing videos, audio files and such became so easy and fun. You can become a TV star, a radio star and an international celebrity thanks to all the rich media capabilities internet offers.

With that, I wish you all Happy Holidays (be that Christmas, New Year, Kwanzaa, Hanukkah or Eid-al-Adha) and more fulfilling online experiences in your digital lives!

Suggestions to Marketing Folks (Brand Managers) at T-Mobile Directly from My Customer Experience

Filed Under Ruminations, Consumer Behavior | 1 Comment

Today I faced with a reality of being a tiny customer for a giant company that does not care enough to get the feedback on how they can improve their service and make their customers love them more. It happens very rare when I blog about a user experience from my personal experiences, but I had to devote a post for that as not only my customer dignity was lost, but my professional advice was disregarded.

I truly believe that T-mobile marketing folks would appreciate some feedback from the actual customers coming to them directly, perhaps even in a form of a packaged idea. Or maybe not! The worst has happened already - as a loyal customer, today I felt duped and almost helpless. I was trying hard to deliver my feedback through the customer service rep and she kept on repeating that no one is going to care about my suggestions. I guess in the worlds of giant corporations a tiny customer‘s voice is just a nuisance. I have to use my blog for that as there is no other channel that exists that can provide that kind of a feedback for them. The rep confirmed that my feedback is useless and no one is going to check and she has no way to pass my suggestions through. I just have to deal with it! On the other hand, it made me think a lot about how much does a brand value matter to the fellow marketers at T-mobile in relation to one but still an eye opening experience from an average customer? Thus, the purpose of this post is not to bash the brand, but to try to deliver my feedback to the folks that can make a difference in the customer experience. Or not, as they can always disregard it. And lose me and lose a few more of the customers like me one by one.

So, I went back to the corporate site and I had a hard time finding a mission statement with the values! I guess, the assumption that the customer is right and important was my imaginary assumption. The company never made a promise to serve me well. That does not help.

I always did not pay much attention to the ads that show how big telecommunication companies treat their customers as opposing to the emerging internet-based providers. Heck, as a customer I was quite irrational while making a choice who is going to be my cellular carrier. I just liked Katherine Zeta-Jones and the coverage seemed to be national, so I chose T-mobile. Very typical irrational, but short-cut based decision. Now, having experienced the reality, I think twice who I should have chosen. Going back to the commercials, I never related till today to the jokes that are played on major carriers with multiple rules. In fact, I was ok to comply to those rules as I always felt I will be heard – till today! As an example, Vonage has a great piece of an ad that makes fun of the giant communications providers. It is pretty new and only available on TV. Other examples include the following videos.

Now, I am thinking about switching to Alltel, who cares about $200 cancelation fee when they never notify me on the overage and I might as well save the trouble?

My complete T-mobile user experience story
To depict the situation better, here is my actual description of the experience as a T-mobile loyal customer. The customer that was not cared for…
Yesterday, I renewed my contract with T-mobile and felt pretty happy to get a new phone and play with it. As a user I had positive feelings about the brand. Today, I could not understand why my phone was so silent till I realized that my service was suspended due to overages of $150. Ok. Could T-mobile notify me with a text message prior to my overage or even prior to suspending my service when I lost an ability to connect to my clients and lost $$? How do I know about the overage? I never check my minutes as a user! Do you ever check you minutes on the cell phone? I never do. In fact I care less. I have yet to meet someone who checks their minutes all the time. Yet, the customer service rep told me that it is my responsibility and they care less about it. Ok, I might have talked too much on the phone this month and the past month and I am ok to pay the overage and I am ok to switch to the more minutes plan. But, there is no way that the T-mobile can devise a program, can create an automated text messaging system to people when they go over their minutes! There is no way it can happen and there is no way to suggest this idea to the customer service to pass along to marketers! I felt as if I was speaking gibberish and the customer rep could not understand my suggestion and passion behind passing the idea how they can still keep my loyalty as a customer if they make those changes – create either email or a text message system that notifies me about the minutes and overage before I have to pay $200. I can pay that, money is not a problem these days – but it appears that T-mobile would rather charge me overages all the time and let me know explicitly that I have to check my minutes! I do not want to check my minutes. I have no time in my life to do that. Why not you as a brand and as a service provider – make it easy for me to be loyal to you? Why not you prevent a trouble of overpaying for me for cell phone usage and notify me about the overages with a text message? How costly is that? Cheaper than a commercial! Or even a customer service call! And I will keep being your customer longer than a contract! Now, I am seriously thinking of switching. I feel cheated. I do not care. I am not loyal any more because you felt that it is ok to keep me in the dark and ignoring my suggestions! Pursuing the lock-ip strategy is not a long term strategy that insures success. At some point, your customers and your competition will figure out how to get away from this bad relationship. Do you care as a brand? Or you don’t?

My suggestions to T-mobile marketing folks:
1. Listen to your customers – create a channel where they can share their suggestions before you lost them!
2. Make it easy for them to be loyal to you! Create an automated communication program (text message or email that notifies your customers about overages beforehand)! Or keep collecting the short-term profit of an overage and lose a lifetime value of steady income.
3. Make sure your customer service rep communicates the customer voice to you directly.

The Difference Beween Private and Public Decisions Consumers Make

Filed Under Ruminations, Consumer Behavior | 2 Comments

It always amazes me how people arrive at certain decisions, what makes them select an alternative in regards to the environment they were exposed to while being at the final stage of buying behavior. And it is not a novelty that private choices, thinking and actions are very different from the ones we do in public - meaning those choices are very visible and easily to be judged, evaluated by the other people who’s opinion we value or rely on. Thus, instead of plunging into the consumer behavior magazines to seek the answer to the question that was burning my head all week, I turned to psychology and sociology studies by Wharton scholars.

I had an assumption in my mind that regardless of the difference in the private state of mind and public image we portray - the two worlds invariably overlap or feed off each other, thus similarities occur - unless we have a case when both worlds almost never coincide, interact or see each other. I do not plan to get too into the psychoanalytical aspect of it, but in the psychology field - they call it a “split personality” syndrome, very rare occurrence, but quite possible - when the two worlds do not have a chance to integrate. Extrapolating on that definition, we can easily see why private and public choices could be totally opposite to each other. As an example, a consumer can appear to be predisposed to one type of behavior and share the reinforcing thinking that favors his private choice (let’s say of consuming some type of media that is prevalent in one environment he mostly resides in). At the same time, he/or she might take an opposite selection while being surrounded by other people where his/her the choice is quite visible.

How do we marketers - find the consistency in the behavior of the users we study? Obviously, we have to observe them from the both sides, in both worlds. What if we do not have that privilege? What to do next?

According to the research in the decision-making process by Mark Pauly (Wharton Business School), “Private behavior more closely follows expected utility models, while public decisions move in the opposite direction. “ Thus, when the choice is private – we pick what is best and most beneficial for us, when the choice is public – we tend to make choices that contradict the most expected utility choice (even if it might be indicative as a value for a group of folks that would benefit from it as well) or make decisions that do not make sense! Go figure! Pauly proves his point by illustrating the decisions consumers make in relation to health care products (insurance) – “People avoid deductibles publicly, but prefer to pay them privately. They want their insurance companies to pay for their preventative care even if it might be cost effective for them to pay for it themselves. “

Even though the example included health care products, I believe one can see the “light” for the topic in discussion for other services we provide and promote or decisions we make while building our lives. The key reasons for this divergence include:

1. Misperceptions of Value
2. Reputation
3. Benefits Distribution

As I see it, there is no other way around it but trying to get into the both worlds. Perhaps, ask our customers invite us into their worlds and see if we can decipher behavioristic patterns that are universal or similar for both worlds? Why do that you might ask yourself by reading this far? Well, to be truly successful in our field – understanding your users, clients, and customers – is the key. Understanding them and catering to their needs by adjusting our products and services in time– is the marketing nirvana we all try to reach. What does our scholar suggest in this case?

- Watch for public-private divergence. If we look at our own decisions, in any case that involves both public and private decisions – we should try to examine the question through both lenses. “For a public decision, especially when there are reputational issues at stake, consider if you would make the same decision in a private situation. Also, look at whether the decision really provides the highest expected utility.”

- Expect that people will not do as they say. This recommendation allows you to better predict and anticipate consumer behavior. People would say one thing in public, but be willing to accept a very different option in private. Understanding that allows you to tailor your communications based on the environment your user currently has chosen to interact with you. Will people actually follow their public positions in private decisions? Is there a way to allow your customers make the decision you advocate that still preserves their reputations? Explore the last question and you can be rather successful despite this truth of life!

- Look for redistributable mechanisms. If we devise our programs when the benefits are funded by the group and redistributed by the need of some members of the group to another – see how it can affect the decisions of your individual buyers and what efficiency you can gain in the process. Consumers are more prone to agree to participate in the shared benefits plans where redistribution process exists, as one man’s garbage can be another’s treasure while both of them pay for the “membership”. Look for those opportunities!

    Content Disclaimer

      Everything posted on this blog is a product of my own thoughts, ideas, reflections based on the professional interests. It is based on the public information, works of the colleagues and fellow researchers that are cited respectfully and my opinions as an industry professional.