Segmentation: The Key to Grow Community | Mary Abbazia | TEDxFergusonLibrary
Summary
TLDRThe speaker discusses the concept of community, emphasizing how businesses can grow by segmenting their audience based on attitudes and behaviors. Using examples from various industries, the video highlights how successful companies tailor their offerings to different customer groups, like pet owners or people seeking pregnancy tests. The speaker explains how segmentation helps businesses meet specific needs and avoid a 'one-size-fits-all' approach, using detailed real-world examples. Ultimately, the video encourages organizations, including nonprofits, to focus on key customer segments to foster growth and deeper engagement.
Takeaways
- 🌍 Community is not just geographic; it can also be defined by shared needs, attitudes, and behaviors.
- 🏢 Successful businesses grow by treating different customers differently, using segmentation.
- 👥 Segmentation involves identifying groups of people with shared behaviors or attitudes, which helps tailor products or services to meet their specific needs.
- 🐶 The relationship people have with their pets can be segmented into 'dog as child' versus 'dog as dog,' illustrating different attitudes and behaviors.
- ☕ Offering a single product to multiple groups with different preferences can lead to irrelevance, like serving 'lukewarm tea' to both hot and cold tea drinkers.
- 💡 A business example showed that by segmenting customers who want to be pregnant versus those who don't, a company successfully marketed the same pregnancy test with different branding and price points.
- 💊 Segmentation helped a pharmaceutical company in Japan reframe depression as a 'soul cold,' allowing them to market antidepressants in a culture where discussing depression was taboo.
- 📚 Nonprofits, like libraries, can also benefit from segmentation by focusing on groups that are already highly engaged, rather than spreading resources too thin across disinterested groups.
- 📈 Segmentation allows organizations to allocate resources more effectively by prioritizing certain customer groups over others, leading to growth.
- 🔍 The key to successful segmentation is observing customer behavior, identifying patterns, and tailoring efforts to foster specific segments that align with your goals.
Q & A
What is the broader definition of a community as discussed in the script?
-The broader definition of a community is a group of people with common needs, attitudes, and behaviors. This transcends geographical boundaries and can exist globally.
Why do successful companies treat different customers differently?
-Successful companies treat different customers differently through segmentation, which involves understanding the unique needs and behaviors of each customer group. This approach helps companies better serve and satisfy their customers.
How does segmentation help businesses avoid the 'one size fits all' trap?
-Segmentation helps businesses avoid the 'one size fits all' trap by tailoring their products and services to meet the specific needs of different customer groups. Without segmentation, businesses risk offering generic products that appeal to no one, like the example of lukewarm tea.
What are the two segments used to illustrate customer attitudes towards pets?
-The two segments are: 1) Customers who view their dogs as children or grandchildren, treating them with great care, buying them gifts, and taking them to the vet frequently. 2) Customers who view dogs as just dogs, providing basic care such as food and shelter but not treating them as family members.
How did segmentation help the medical device company grow their home pregnancy test kit business?
-The company identified two segments: women who wanted to be pregnant and women who did not want to be pregnant. They tailored their marketing and product packaging to each group, leading to significant business growth, even though the core product remained the same.
How did segmentation help address depression in Japan in the 1990s?
-Segmentation helped by reframing depression as 'soul cold' (core no Kazi), making it more acceptable to discuss and treat. By focusing on one specific segment of patients who were actively seeking help, the company was able to grow the market and make a positive impact on mental health.
What was the outcome of focusing on a single segment in the Japanese antidepressant market?
-By focusing on a single segment—patients who were seeking help but not receiving proper treatment—the company was able to grow their market significantly, generating over $400 million and saving lives.
How can segmentation be applied in non-profit organizations like libraries?
-In a library setting, segmentation can help allocate resources more effectively by focusing on different groups of patrons. For example, a library might focus 70% of its efforts on highly involved patrons and 30% on those who support the library financially, while not spending resources on those with no interest.
What is the danger of serving 'lukewarm tea' in business?
-The danger of serving 'lukewarm tea' is that by trying to appeal to everyone with a single offering, businesses end up appealing to no one. It's better to segment and create targeted products for different groups to remain relevant and competitive.
How does segmentation lead to community growth according to the speaker?
-Segmentation leads to community growth by allowing organizations to focus on the needs and behaviors of specific groups, fostering stronger relationships with those groups and, ultimately, helping the community or customer base expand in a meaningful way.
Outlines
🌍 Understanding Community and the Power of Segmentation
The speaker begins by discussing the concept of community, which can be both geographical and based on shared needs and behaviors. This broader definition allows for a global understanding of community. The key takeaway is that successful organizations recognize that different customers have different needs. This is called segmentation, which involves observing customer behaviors and addressing specific needs. When companies tailor their approach to individual segments, they gain loyalty by providing personalized services that meet customer expectations.
🐕 Segmenting with Pet Ownership as an Example
The speaker illustrates segmentation using pet owners as an example. Rather than just classifying dogs by size, it is more meaningful to observe owners' attitudes and behaviors toward their pets. For instance, some treat their dog as a family member, while others see it as just a pet. These differences in relationships drive different needs, from luxury pet products to basic care. By understanding and catering to these distinct segments, businesses like veterinarians or pet supply companies can better serve their customers.
🍵 Avoiding Lukewarm Solutions: The Risk of One-Size-Fits-All
This segment warns against the dangers of a one-size-fits-all approach. The example of selling 'lukewarm tea' to both hot and cold tea lovers demonstrates how failing to cater to specific preferences can result in irrelevance. The speaker emphasizes that businesses must avoid creating a middle-ground product that appeals to no one and instead focus on meeting the distinct needs of different customer groups.
👶 The Power of Segmenting with Pregnancy Test Kits
The speaker shares a success story of a medical device company that transformed its pregnancy test kit sales through segmentation. They identified two key customer segments: women who wanted to be pregnant and women who did not. By tailoring the product's packaging, pricing, and placement to each group, the company achieved significant business growth. Despite using the same core product, the segmentation strategy allowed them to meet the unique emotional needs of each customer group.
💊 Using Segmentation to Address Depression in Japan
The speaker recounts how a pharmaceutical company in Japan used segmentation to address depression, which was a taboo topic in the country. They focused on a middle group of people who were mildly affected and reframed depression as a common illness, like a cold. This allowed them to communicate the message more effectively and grow their market, demonstrating how segmentation can work in even complex, sensitive situations like mental health.
📚 Applying Segmentation in Nonprofits: The Library Example
The speaker concludes by applying segmentation to a nonprofit context, using a library as an example. They identify three key segments: highly involved users who engage deeply with the library, donors who believe in the library's mission, and those who are unaware or uninterested in the library. By focusing resources on the first two segments, the library can maximize its impact and avoid wasting efforts on the uninterested group. This example shows that segmentation can help any organization, even nonprofits, to grow and thrive.
Mindmap
Keywords
💡Community
💡Segmentation
💡Attitudes and behaviors
💡Outside-in approach
💡One size fits all
💡Customer insights
💡Classification vs. segmentation
💡Promotion efforts
💡Nonprofit segmentation
💡Market growth
Highlights
Community can be defined broadly as a group of people with common needs, attitudes, and behaviors, transcending geographic boundaries.
Successful companies grow by treating different customers differently through segmentation.
Segmentation is achieved by taking an outside-in approach, understanding customer needs through observation and conversation.
Customers appreciate when a company segments them and understands their specific needs.
Segmentation can be illustrated through the example of dog owners, showing different attitudes and behaviors towards their pets.
Two distinct segments identified for dog owners: 'Dog is my child' and 'Dog is a dog', each with different needs and behaviors.
For businesses, understanding these segments can lead to tailored offers and services.
The danger of a 'one size fits all' approach is compared to selling lukewarm tea, which is neither hot nor cold and thus unappealing.
A story about a medical device company that successfully segmented their market for a home pregnancy test kit.
The company identified two segments for pregnancy tests: women who wanted to be pregnant and those who didn't.
By focusing on the segment of women who wanted to be pregnant, the company grew their business significantly.
Segmentation can also be applied to complex situations like treating depression in a community.
In Japan, depression was reframed as 'core no Kazi' or 'your soul has a cold' to make it more approachable.
Segmentation helped grow the market for an antidepressant, Paxil, by focusing on a specific segment of the population.
Non-profit organizations can also benefit from segmentation to allocate resources effectively.
The Ferguson Library example illustrates how a non-profit might segment its community to focus efforts.
Encouragement to use segmentation to grow a community by identifying and fostering key segments.
Transcripts
[Music]
what if I was to tell you that you could
grow your community by not talking to
some people so let's first talk about
what community is right usually it's a
geographic area where people work and
live and while this is one definition
it's not the only definition right a
broader definition could be this it
could be a group of people with a common
set of needs attitudes behaviors right
when you think about it this way it
transcends cities countries its global
right it's like global community
now organizations know that they need to
foster communities but what they might
not know is that there's a key to
growing so Oh over the last twenty five
plus years that I've been working with
very different companies around the
world there is one thing that I've seen
the successful companies treat different
customers different they treat different
customers different and in business what
we call this is segmentation and they do
this by taking an outside-in approach
they talk to their customers they
observe their behaviors and they uncover
a very rich set of needs in fact they
find that there are groups of people
that have common needs but different
than another group right so customers
love it when you segment them I mean
think about it as us right wouldn't you
love it when a company just gets you and
they understand your needs they keep the
time and not only that but then they
satisfy your needs that's pretty great
right
so it really does make sense that any
organization can benefit by segmenting
but let's first see what segmentation
looks like we'll take dogs right who
here has a dog okay and for those of you
out there then okay a large dog a medium
dog okay and how about a small dog okay
so we have a couple okay this is very
interesting but its classification its
what based it's descriptive right it
doesn't really give us insights but now
if I was to ask those of you that have
dogs do you know your dog's birthday
okay if you do all right and do you buy
a present for your dog okay this is
segmentation this is attitudes and
behaviors that you have about your pet
right and so let's take a let's let's
use relationships with your pets as a
we're going to do two segments one is my
dog is my child or my grandchild right
come to mommy
the other one is dog is dog in the first
one let's look at this this dog is not
only part of the family it's part of the
cheering squad right look at the pins
and I never knew you could put pins on a
dog like that and the toys right and
this dog probably gets incredibly great
dog food and treats and it sleeps in a
very comfortable bed and maybe even with
the parents and it goes to the
veterinarian often right whenever
whenever there's a need for this right
let's look at the second segment now
this is the same sized dog it could even
be the same breed but the relationship
that the parent has with this animal is
different right and they still love the
dog but maybe the dog sleeps in the
backyard or in the barn and it gets just
a big bag of dog food and might go to
the vet only when it's out
solutely necessary so if you are a
veterinarian or a pet supply company
this type of segmentation might help you
it might help you focus and provide
different offers for these two different
groups so as far as I get this Mary I
know that segmentation sounds
interesting but you don't understand I
don't have time for that I don't have
I'm running a business right well there
is a trap and the trap is if you do a
one size fits all it's dangerous so let
me let me illustrate this alright so I'm
selling tea and you guys love hot tea
and you guys love cold tea but I just
want to come out with one tea right so I
take the average and what do I end up
coming out with lukewarm tea right who
wants to buy my lukewarm tea nobody
right I'm irrelevant so that's the
danger is is when you have one offer and
you're providing it to two very
different groups
you end up really providing nothing that
people are going to buy so is there a
chance in your community that you might
be serving up a little bit of lukewarm
tea so I want to tell you my most
favorite stories that brings all of this
together I was writing a book with my
business partner Tom's Batali and we
came across a gentleman and his name is
Bob gergan Bob gergan he worked for a
medical device company that sold big
equipment and what Bob said was he says
you know what through an acquisition we
ended up with this a home pregnancy test
kit and he said we didn't know what to
do with it so we went out we sold and it
was a miserable failure he said it just
didn't work so he said my small team
with not a lot of money not a lot of
time we came back we said okay it has to
be something about the customer now and
they started coming up with you know age
income religion those are all
classifications right
then they said ah it had to be something
about attitudes and behaviors about
being pregnant their desire right when
you think about it that way he said we
came up with two segments there are some
women that really really want to be
pregnant and there are some women that
really really don't want to be pregnant
right and so he said it was very simple
he said it was just two segments but it
was enough to give us insights and so by
doing that he said we took the ones that
wanted to be pregnant he said what we
did was we came up with a product called
conceived and it was pink and blue
package and it was of course next to the
baby the baby stuff right and it was
$9.99 for the people that didn't want to
be pregnant this was a very discrete
purchase right they didn't really want
anyone to know about this so that
product they named rapid view and it was
it was over by the condoms right and
that product sold for $6.99 so what pop
said was he says we pretty much ignored
the people that didn't want to be
pregnant
he said we sold it but we put all of our
promotional efforts into the people that
wanted to be pregnant and by doing that
he grew their business by four million
dollars in just three years it was it
was a very big success for their group
the ironic thing about this is that test
strip it was exactly the same so
everything that they did around it was
different but the core product was
exactly the same so this seems like it's
you know pretty simple with a product
but could segmentation help in a more
complex situation let's just say severe
disease in in a community like
depression can segmentation help in that
case and you know what it did in Japan
in the 90s they were suffering from
significant depression in fact there
were high suicide rates and when I was
there
there was netting around the tall
buildings and I asked I said what is
that and they said well that's jumper
netting so it was bad right and Prozac
was the the antidepressant that was
being sold around the world but it
wasn't sold in Japan and the reason is
is because depression was taboo you
couldn't talk about it and you can't
sell something that you can't talk about
right so one team it's a it was a small
team they were selling an antidepressant
called paxil and they said let's look at
what the market is right attitudes and
behaviors about depression and what they
found was there are three segments this
first segment this group was
significantly depressed right and they
were they were dangerous to themselves
and they were dangerous to society so
they were on a treatment the other end
of the spectrum this group they were
just mildly irritated but it wasn't
enough to really impact them they
weren't seeking any treatment this
middle group they were trying to to
somehow find help and if they went to
the doctor at all the doctor would say
well you know you really got to stop the
smoking and lay off the drink in a bit -
but they didn't have anything tangible
for them right so this taxol team
focused just on one part now remember
this is a whole community but they just
decided to focus on a portion this one
segment and what they said was this okay
if it's taboo to talk about depression
then we need to reframe that first and
that's what they did they said it's
really like getting a cold right and
it's called core core no Kazi
does your soul have a cold anyone can
get it but if you take care of it early
it'll be just fine and so by focusing on
this this patient and doctors that took
care of these types of patients they
were able to grow the market they were
able to generate over 400 million
dollars in just a couple of years and
the most important thing is they save
people's
so it really really did work I'm hoping
that what you're starting to see is the
power of segmentation right one final
question then is is how about in
situations where we're a nonprofit
doesn't really work there well since
we're at the Ferguson library I thought
it would be fun to to see if we could
actually do it with with this place
right so again it's when we're
segmenting these attitudes and behaviors
so what about attitudes and behaviors
about being involved with the library
okay so if we take an outside-in
approach
there's probably we're gonna say there's
three segments this first segment they
they want to enrich themselves they want
to enrich their family so they're highly
involved they are they're going to the
events they want to be a part of the
events they're figuring out the
makerspace they're checking out books
and movies still right and they are
donating but what they're donating is
probably a lot of their time and
hopefully some money right this second
group here they're they're probably not
utilizing the resources as much but they
believe that the library is critical to
a thriving city so they go to the novel
affair and they um hopefully write some
big checks right then there's this third
group if we were out on Bedford Street
and we said you know how do you feel
about being involved with the library
they may look at you and just go you
know where's the library yeah they just
they just have no interest they just
don't care so if the library we assume
have limited resources then they have to
figure out where they're gonna allocate
that so they may take that first group
the highly involved and they may spend
seventy percent with that group meaning
that they might continue to invest in
technology and events like this right
the second group now keep in mind that
they you know they love going to those
galas so you might take 30 percent of
your efforts and put that against really
cool fundraisers
and make sure to give them the
information back that says this is you
know what your money is actually
providing for the not only for the
library but for your our community and
remember we've done 70% 30% so that
leaves 0% for that last segment right
the not involved it would dilute our
efforts with these two if we spent any
money or time here so that's this an
example of what you know a non-profit
might do so if you're trying to grow
your community I encourage you to try to
segment keep it simple you talk to some
customers you observe their behavior and
then what happens is you see the
patterns and you'll possibly find that
there's one segment that makes a whole
lot of sense for you and you foster that
segment right I truly hope that you will
find that segmentation is a key to grow
in your community thank you
[Applause]
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