Friday, July 30, 2010

A Salad Shop Spoils a Segmentation Opportunity

Have We Met Before?
The quick-service sandwich and salad restaurant near my office launched two new salads several weeks ago. I have ordered both new salads via the restaurant's online ordering system several times since the salads debuted. So why did I receive an email just yesterday that introduced me to their new salads? I've already met them — many times — and I like them a lot. The store should know this since my online ordering account uses my email address as my username and stores all of my previous orders.

I know exactly how this happened: The marketing team at this restaurant decided that it would be a good idea to announce to their customers the arrival of their new salads. So, they whipped up a nice email, gathered all of their email addresses, and clicked "send." Nobody stopped for a minute and asked, "but what if someone regularly orders our new salads? Shouldn't we send that person a different email?"

This restaurant should have sent me an email thanking me for ordering the new salads, inviting me to submit a testimonial about the salads for their website, and given me some salad coupons to share with my friends.

Data-Driven Segmentation

If businesses are going to collect information about their customers — even the most basic information like their first and last names — they must use it to their advantage. There's simply no excuse for sending marketing communications that aren't personalized or targeted based on demographic data or purchase behavior. Consumers are bombarded by hundreds of marketing messages a day. They need to feel that your company understands them and has a relationship with them. One way to do this through marketing communications is to use the data that you have about each customer to segment them in a way that makes your message to each group highly relevant and lets customers know that you are paying attention to them.

Add This To Your To-Do List
If you're not customizing your marketing messages, start simply -- just use a personalized greeting. Include the name of your customer in your emails and letters. If you work in a restaurant and don't know the first names of your regular customers, it's time to learn them and greet them by name. If you are able to collect more information about your customers, use it wisely. Based on what you know about your customers, about what would they be interested in hearing from you? Can you group customers by their purchase behavior or demographic information? Would men like a different message than women? Test different messages and see if you can improve your response rate. With just a little effort, you'll be well on your way to an advanced segmentation strategy.

There's never a lack of ideas.

Tuesday, July 13, 2010

Groupon Leaps Into Local Customer Segmentation

This is my second post on Groupon's market segmentation strategy. Read the first one here.

One Giant Change
Groupon made a big change recently: Within each city it serves, the company is now using customer addresses to offer different "deals of the day" on its website and through its emails.

On July 13th, 2010, Groupon sent its Chicagoland customers one of four different emails that each contained a unique deal of the day (three of the emails appear on the right). The deals were for organizations located in Naperville, Long Grove, Gilman, and Chicago. The corresponding side deal of the day and newly-created "deals nearby" in each email comprised the three other deals. I received the offer for the establishment in Naperville because that's where I live. My co-workers received the other offers via email based on where they live.

The Importance of This Change
This marks a noticeable shift in the way Groupon has done business up to this point and it shows that as the company builds its customer database, it will continue to find ways to leverage customer data to provide its users with more relevant deals that will lead to a more profitable business model.

I predict that the company will soon begin offering customized deals based on user preferences and past purchases in addition to their location, as those metrics are the most valuable ones that their database holds. Groupon has a great future ahead of it because the company is leveraging cutting-edge technology and combining it with classic marketing segmentation and targeting strategies.

Add This To Your To-Do List

Let's keep an eye on Groupon in the upcoming months. I anticipate that we're witnessing the beginning of what will become a great case for using technology to form differentiated customer segments in order to simultaneously boost customer satisfaction and profits. Let me know if you notice any changes in your Groupon experience over the next few weeks and I'll post your stories here.

There's never a lack of ideas

Sunday, July 4, 2010

When Realtors Become Commodities

Who's Who?
Every realtor's advertisements and business cards look exactly the same. To make one, simply combine these elements:

  • A photo of a smiling realtor
  • A quote about caring about the home buyer or seller--something like, "putting you first" or "because I care"
  • The name of the brokerage firm
  • Contact information
Realtors earn the bulk of their new clients from referrals, so the business cards created with the elements listed above work just fine. All a referral needs to know is the realtor's contact information and what she looks like so that when they meet it will feel a little familiar.

Standing out in a Crowd

But why would a realtor use the same approach in her advertisements as she does in her business cards? A realtor's ad on a billboard, in a newspaper, and in the yellow pages is meant to attract customers that can't be reached by word of mouth via a referral.

If a realtor is going to stand out among the sea of similarity that comprises all realtor advertisements, she needs to specialize her service offerings and tailor her message accordingly. I've put together a few simple examples with corresponding ideas for advertisements. Enjoy them in all their cheesiness, but recognize them for what they are--targeted, distinct, and great attention-grabbers:
  1. Need a real estate miracle? If you've had your house on the market for more than six months, call me today. Working miracles on unsellable houses is my specialty. My success rate is simply divine.

  2. At your service. I only serve six real estate clients at a time so that I can give you the time and attention that you deserve. Call me anytime -- day or night -- and I'll be there for all of your real estate needs.

  3. Family circus. If you're looking to buy or sell your family's home, I'm here to help. I only work with families. I'll work around your family's soccer games, ballet recitals, and music lessons to make showing your house or viewing other properties as convenient as possible. I'll even come and help clean your house before a showing if you're busy with the kids!

  4. Focus on the product. Put more money in your pocket -- I have the cheapest real estate commission rate in the industry. Guaranteed. Why pay more?
Add This To Your To-Do List
Are you or your business becoming a commodity? Do your customers know what makes you different than your competitors? If they don't, then you're headed down a dangerous path of anonymity. But its not too late to stand out, get noticed, and be memorable. What makes your brand unique? It's such a basic question, but finding the right answer is often very challenging in commodity markets. Whether you're a car dealer on a street filled with other car dealers or a family restaurant surrounded by dozens of dining alternatives, you must promote the things that make you unique. If you don't, you'll risk being forgotten.

There's never a lack of ideas.