Segmentation: The Key to Grow Community | Mary Abbazia | TEDxFergusonLibrary

Summary

The 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

00:00

🌍 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.

05:01

🐕 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.

10:04

🍵 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.

Keywords

💡Community

A community in the video is defined both geographically and more broadly as a group of people with common needs, attitudes, or behaviors. It is essential to the video's theme, as the speaker explains how successful organizations grow by recognizing and serving these communities. Examples include global communities that transcend physical borders.

💡Segmentation

Segmentation refers to the process of dividing a larger market or audience into smaller, more specific groups based on shared characteristics, attitudes, or behaviors. In the video, the speaker emphasizes that successful companies treat different customers differently, using segmentation to tailor their offers to specific groups. For example, companies might segment dog owners based on how they treat their pets.

💡Attitudes and behaviors

These refer to the psychological and behavioral traits that differentiate groups within a segmented audience. The video uses the example of dog owners who either view their dogs as family members or simply as pets. Understanding these attitudes and behaviors allows organizations to provide more relevant products and services.

💡Outside-in approach

The outside-in approach is a method where businesses focus on the customer's perspective, understanding their needs by observing their behaviors and listening to their feedback. The video explains that successful segmentation comes from this approach, as it helps businesses uncover rich insights about their customer base, allowing them to meet specific needs.

💡One size fits all

This concept refers to the mistake of trying to serve everyone with the same product or service, which often results in something that doesn't fully satisfy anyone. In the video, this is illustrated with the example of selling 'lukewarm tea' to people who either prefer hot or cold tea. The message is that segmentation helps avoid this pitfall by targeting specific groups.

💡Customer insights

Customer insights are the valuable findings businesses gain about their target audience's needs, preferences, and behaviors through observation and research. In the video, the speaker shares how businesses uncover these insights to create tailored products and services, such as the segmentation of dog owners or pregnant women in the medical device example.

💡Classification vs. segmentation

Classification involves sorting people or things into categories based on descriptive traits, while segmentation goes deeper into understanding their attitudes and behaviors. The video highlights this difference by contrasting the simple classification of dogs by size with the more meaningful segmentation of dog owners based on how they relate to their pets.

💡Promotion efforts

Promotion efforts refer to the marketing activities businesses use to focus on specific customer segments. In the video, this is demonstrated with the pregnancy test example, where promotional focus was placed on women who wanted to conceive, leading to significant business growth.

💡Nonprofit segmentation

The video discusses how even nonprofits can benefit from segmentation, particularly when they have limited resources. By focusing on segments that are more engaged with their mission, such as library donors or regular participants, they can better allocate their resources to foster deeper relationships with these groups.

💡Market growth

Market growth refers to the increase in a company's sales or influence by effectively meeting the needs of different customer segments. The video provides examples such as the Paxil antidepressant in Japan, where segmentation of patients helped the company grow the market and increase sales by $400 million while addressing social taboos around depression.

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]