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Attitudes Meet Behaviors
Driving Value through Segmentation
New competencies and addressability at scale extend the CCRM
framework to capture a great opportunity
Identity
Management
Addressability
Optimization
Audience
Management
Platforms
Utilization Targeting Personalization Organization Measurement Tech Stack
The CCRM Framework
The New Platform Marketer Competencies
Addressability at Scale
Media Planning Channel Planning
Targeting & Personalization
Enterprise segmentation, which includes value and lifecycle
dimensions, forms the foundation of CCF
What data,
systems, tools
and
technologies
will be
necessary?
How do we
organize and
what
capabilities
and business
processes
will be
necessary?
Infr
astr
uctu
re
Measurement & Attribution
Budget Allocation
Experience Delivery
Financial Management
Customer Strategy
Integrated targeting and customization across media and channels
are optimized at the segment and individual level
Measurement and attribution at the segment level then drives
macro-level media and channel budgeting allocation
This creates a complete optimized customer experience that drives
increased LTV, efficiencies and shareholder value
Segmentation
Value Planning O
rganiz
atio
n
2
New competencies and addressability at scale extend the CCRM
framework to capture a great opportunity
Identity
Management
Addressability
Optimization
Audience
Management
Platforms
Utilization Targeting Personalization Organization Measurement Tech Stack
The New Platform Marketer Competencies
Addressability at Scale
Media Planning Channel Planning
Targeting & Personalization
What data,
systems,
tools and
technologie
s will be
necessary?
How do we
organize and
what
capabilities
and business
processes
will be
necessary?
Infr
astr
uctu
re
Measurement & Attribution
Budget Allocation
Experience Delivery
Financial Management
Integrated targeting and customization across media and channels
are optimized at the segment and individual level
This creates a complete optimized customer experience that drives
increased LTV, efficiencies and shareholder value
Org
aniz
atio
n
Enterprise segmentation, which includes value and lifecycle
dimensions, forms the foundation of CCF
Customer Strategy
Measurement and attribution at the segment level then drives
macro-level media and channel budgeting allocation
Segmentation
Value Planning
The CCRM Framework
3
Introduction
4
What is
segmentation?
How to approach
segmentation
Segmentation and the
Platform Marketer
• History
• A modern definition
• Applicability to the
Platform Marketer
• Research, Analysis,
Profiling
• Strategy
• Linking to
Addressable Media
Case studies
What is
segmentation?
How to approach
segmentation
Segmentation and the
Platform Marketer
• History
• A modern definition
• Applicability to the
Platform Marketer
• Research, Analysis,
Profiling
• Strategy
• Linking to
Addressable Media
Case studies
Agenda
5
A Brief History
6
Segmentation Aggregating consumers into groups based on a personal characteristic.
Dividing a heterogeneous market into smaller homogeneous groups
A Brief History
No real
language to
describe
segmentation
Pre-1950’s 1950’s 1960’s 1990’s
• 19th century book
market: different
quality books with
same content sold at
different prices
• 1920‟s GM: “A car
for every purse and
purpose”
Product, pricing,
channel based
on social class,
religion, gender,
education
Audiences
aggregated
by content
Audiences
aggregated
by content
Audiences
aggregated
by content
Segmentation
productized, but
not predictive
Advances in
statistical
techniques but
concerns about
implementation
Data driven
segmentation
introduced
“Segmentation”
as a strategy to
inspire
differentiation
1980’s
Census and
psychographic
based
segmentations
packaged
Attitudes and
psychographics
tested with regards
to predicting
behavior
Segment based
choice models
more predictive
of aggregate
models
• Haley examines
factors other than
demographic,
based on the belief
that there are other
drivers o behavior
• Strong emphasis
on ability to predict
choice
• Heterogeneous
markets exist.
• Introduction of
market
segmentation as a
strategy = product
differentiation
• Segmentation and
CRM become
disconnected
• Behavioral and
value analysis gain
prominence
• Segmentation
loses its identity
Recognition that
different demand
curves exist for
different
individuals
7
Segmentation Defined
8
Segmentation Aggregating consumers into groups that will respond similarly to a specific
marketing mix in a specific set of circumstances
What is
segmentation?
How to approach
segmentation
Segmentation and the
Platform Marketer
• History
• A modern definition
• Applicability to the
Platform Marketer
• Research, Analysis,
Profiling
• Strategy
• Linking to
Addressable Media
Case studies
Agenda
9
Research
Linking
To influence brand choice, define segments
based on underlying brand decisioning
process (NOT just attitudes or behaviors)
To develop an enterprise-wide customer strategy,
draw rich insights into value, needs, behavior,
brand relationships, interests, psychographics,
media usage
To implement the customer strategy across the
enterprise, assign each individual consumer to a
segment
• Individuals in your customer base
• Non customers – identifiable and non identifiable
Keys to Success
10
Approach
Deeply understand
emotional drivers
tied to key brand
attributes
among the
battleground based on
interviews and robust
online survey
Assign each
individual in the
battleground to a
segment by linking
survey response to
data available on the
entire battleground
and developing an
analytical model to
assign segment
Bring segments to
life by portraying
each segment‟s
decisioning protocol,
brand relationship,
media usage, needs,
style, interests,
shopping behavior,
wallet size
Also depict actual
segment behavior
Primary Research Modeling and
Analysis Profiling
Develop the plan to
motivate purchase,
including marketing
mix considerations,
experience design
across touch points,
marketing program
strategy
Segment
Strategy
11
Motivational
(understand WHY my
consumers make
decisions to engage)
Attitudinal
(understand how my
consumers feel and
think )
Behavioral
(what are my
consumers doing)
Background Primary Research
12
Personal
Values
Personal
Benefit
Brand or
Product
Benefits
Brand or
Product
Attributes
How Segments Emerge –
Consumer Decision Maps
CDM is the basis for
segmentation
Segments created by
grouping individuals
with similar CDM
emphasis
13
Primary Research
Video (Cable, Satellite, Online) Example
Clear & vivid
experience
Opportunity to
Relax
One bill /
save with
bundles
Effective
product
education
Enjoyable
Entertainment
Offer
channels
important to
me
Local
Channels
Channel
variety
Affordable
Consistent
service
delivery
Established
Reputation
Respectful
Customer
Service
Variety
Good Value
Reliable Service
Trustworthy
Company
Friendly and
saves time
Order by
phone
English speaking
call
Effective &
Prompt
Service
I feel I am
working with
trusted partner Feel in Control
I feel smart &
informed
Learning about
the world
Relaxed stress-
free escape
Freedom to
Choose
Personal
satisfaction Enjoy the good
things of life
Make wise
choices
Brand
Benefits
Brand
Attributes
Personal
Benefit
Personal
Values
Consumer Decision Map
Primary Research
14
Business Travel Example
Consumer Decision Map
Primary Research
15
Brand
Benefits
Brand
Attributes
Personal
Benefit
Personal
Values
Assist w/ my needs
Peace of Mind
Take a Vacation
Family Love Achievement
Can do More
Confident
Productive
Personal
Values
Pool
Accrued Status
Good Amenities
Gym
Restaurant Lounge
Courtyard
Excellent Employees
Smile Member’s
Only Lounge Treat w/ Respect
Relaxed
Feel more at home
Self Esteem
Valued
Good Provider Adventure
Good Life
Business Center
+Health
Decompress
Peace of Mind
Save Time
Easier Choice
Pro-active
‘Know Me’
Less Worry/Stress
Comfort Focus
Exclusive, Cash Bar, Snacks, Concierge ,
More Business Travelers
Consistent Experience
Comfortable Room
Available Parking
Clean Facility
Stay Longer Save Money
Guaranteed Room
Upgrades
Gain Rewards
Special Moments/New Experiences
Recognition Nice Decor
16
Performance Score by Brand
Chain
# Decision Chain Description
Importance
Score Hilton Marriott Starwood Wyndham
1 Good Amenities -> Having a Balanced Life -> Feeling More at Home
-> I Can Relax 1.54 3.44 3.53 3.64 3.09
2 Good Amenities -> Easier Choice -> Saving Time & Trouble ->
More Productive -> Accomplishment 1.92 3.49 3.67 3.59 3.00
3 Consistent Positive Experience -> Less Worry/Trouble/Distractions -
> Being Productive -> Ability to Focus -> Peace of Mind 2.75 3.67 3.69 3.71 3.11
4 Having Status -> Special & Tailored Treatment -> Assist with my
Needs -> Feeling Valued & Remembered -> Self-Esteem 1.95 3.46 3.66 3.61 2.93
5 Accruing Rewards -> More Personal Vacations -> Special
Experiences with Loved Ones -> Good Provider& Family Love 3.41 3.37 3.75 3.66 3.00
6 Having Status -> Access to Special „Member‟s Only‟ Amenities ->
Being More Productive -> Accomplishment 1.49 3.42 3.65 3.49 3.07
Overall Performance Score by Brand
Hilton Marriott Starwood Wyndham
45.43 47.99 47.4 39.5
Primary Research
Hotel Score on Brand Decision Chains
17
Performance Score by Brand
Chain
# Decision Chain Description
Importance
Score Hilton Marriott Starwood Wyndham
1 Good Amenities -> Having a Balanced Life -> Feeling More at Home
-> I Can Relax 1.54 3.44 3.53 3.64 3.09
2 Good Amenities -> Easier Choice -> Saving Time & Trouble ->
More Productive -> Accomplishment 1.92 3.49 3.67 3.59 3.00
3 Consistent Positive Experience -> Less Worry/Trouble/Distractions -
> Being Productive -> Ability to Focus -> Peace of Mind 2.75 3.67 3.69 3.71 3.11
4 Having Status -> Special & Tailored Treatment -> Assist with my
Needs -> Feeling Valued & Remembered -> Self-Esteem 1.95 3.46 3.66 3.61 2.93
5 Accruing Rewards -> More Personal Vacations -> Special
Experiences with Loved Ones -> Good Provider& Family Love 3.41 3.37 3.75 3.66 3.00
6 Having Status -> Access to Special „Member‟s Only‟ Amenities ->
Being More Productive -> Accomplishment 1.49 3.42 3.65 3.49 3.07
Overall Performance Score by Brand
Hilton Marriott Starwood Wyndham
45.43 47.99 47.4 39.5
Primary Research
Hotel Score on Brand Decision Chains
Approach
Deeply understand
emotional drivers
tied to key brand
attributes
among the
battleground based on
interviews and robust
online survey
Assign each
individual in the
battleground to a
segment by linking
survey response to
data available on the
entire battleground
and developing an
analytical model to
assign segment
Bring segments to
life by portraying
each segment‟s
decisioning protocol,
brand relationship,
media usage, needs,
style, interests,
shopping behavior,
wallet size
Also depict actual
segment behavior
Primary Research Modeling and
Analysis Profiling
Develop the plan to
motivate purchase,
including marketing
mix considerations,
experience design
across touch points,
marketing program
strategy
Segment
Strategy
18
Dimensions Within Segments
• Loyalty tier
• Wallet share
• Tenure with competitors
• Geographic risk factors
• Geographic lifestyle summaries
• Geographic competitive data
• Drive markets
• Age
• Income
• Family status
• Education
• Product / service engagement
• Spend, payments
• Channel preference
• Thoughts
on
category
• Brand relationships
• Brand imagery
• Stated versus derived needs
• Lifestyle
• Image
• Profitability
• Survival
• Predicted future LTV
• Survey data on wallet
share by brand
• Usage
• Social media
• Programs / print vehicles / digital property
• Syndicated data
Data for Segmentation and Profiling
Modeling and
Analysis Profiling
Dimensions
Loyalty Geographics
Customer
Value
Media
Psychographics Demographics
Category
Attitudes Brand
Behaviors Customer
History
• Shopping/consideration
• Booking
• Usage
• Survey data on behaviors
– general and with
competitors
19
Making Segmentation Actionable
20
Linking to Customers and Prospects
Research
• Name
• Address
• Survey data
Prospect and
Customer Data • Each record assigned
to a segment
• Tied to syndicated
media data
• Tied to future
research
Audience
Data
Modeling and
Analysis Profiling
Making Segmentation Actionable
21
Linking to Addressable Media
Modeling and
Analysis Profiling
Addressable
Media
Anonymous online
visitors assigned to
segment
Anonymous
Data
• Cookies and 3rd
Party Data
• Online available
Research
• Name
• Address
• Survey data
Prospect and
Customer Data
• Each record assigned
to a segment
• Tied to syndicated
media data
• Tied to future research
Identifiable
Audience Data
• Name
• Address
Example: Predicting Segment
Using Online Data
Modeling and
Analysis Profiling
22
Strategic Tactical
• Based on MAVEN research
• Rich insight into attitudes
• Informs strategy
• Based on behavior
• Actionable; tied to database
• Informs tactics
Rich Actionable
Strategic
Planning Value
Proposition
Program
Planning
Addressable
Media
© 2013 Merkle Inc. All Rights Reserved. Confidential 19
Media Budget Allocation
100%
135% 135% 135% 135%
39,002
43,982
41,264
38,640
34000
36000
38000
40000
42000
44000
46000
90%
100%
110%
120%
130%
140%
150%
160%
Baseline Scenario 1 Scenario 2 Scenario 3 Scenario 4
To
tal P
oli
cie
s
% B
ud
get
to 2
011
Budget Comparison
Budget New Customers
Scenario Scenario Budget Brand
TV
Print Display Paid
Search
Online
Lead Gen
Baseline 2011 budget 100% 100% 100% 100% 100% 100%
Scenario 1 2012 budget 135% 151% 151% 109% 122% 136%
Scenario 2 2012 Maximize
Portfolio Value
135% 86% 26% 270% 236% 125%
Segment 1 215% 95% 18% 450% 280% 138%
Segment 2 154% 92% 20% 395% 210% 153%
Segment 3 136% 60% 40% 280% 315% 127%
Segment 4 88% 66% 25% 120% 180% 114%
Segment 5 75% 70% 24% 120% 115% 116%
Strategic Planning Value Proposition Program Planning Addressable Media
Media budget allocation by segment to maximize return based on Media Mix Optimization
© 2013 Merkle Inc. All Rights Reserved. Confidential 22
Market Understanding
Strategic Planning Value Proposition Program Planning Addressable Media
Segment strategy built around the segment value proposition; detailed media mix, product differentiators, brand attributes, low price vs. value, channel objectives
© 2013 Merkle Inc. All Rights Reserved. Confidential 27
Website Personalization
Strategic Planning Value Proposition Program Planning Addressable Media
Channel (website) personalization by predicting segment based on online characteristics
Segment 1
Segment 2
Segment 3
Segment 4
Segment 5
© 2013 Merkle Inc. All Rights Reserved. Confidential 28
Direct Marketing Testing
Seg Initial Recommendations
1
Position: Company has a great selection, you can find whatever you want!
Highly likely to reactivate naturally
Test Trigger Program with Shortened Inactive Window (e.g. 20-weeks) v. no
contact control
Test reactivation model v. no contact control
Test recognition based program
2
Position: Company has something for you!
Highly influenced to purchase items shown on air.
Test “Upcoming Shows” communications, highlight popular shows
Test Reactivation Model Depth of file to maximize ROI.
Communicate based on product affinities
3
Position: It‟s about convenience. Shop when you want!.
High penetration of Internet and Multi-Channel customers.
Test penetration into model with lower cost e-campaigns.
Test multi-touch campaigns
Test personalized URL‟s to get click through activity
Audience Segment Creative Cell Contact Notes
Top Model Segment 1 V1 1 Emailable: Multi Multi cell includes 2 emails + 1 DM
2 Emailable: EM 2 EM only
3 Emailable: Holdout No contact
4 DM Only 1 DM only
5 DM Holdout No contact
Segment 2 V2 6 Emailable: Multi Optional
7 Emailable: EM Optional
8 Emailable: Holdout Optional
9 DM Only
10 DM Holdout
V3 11 Emailable: Multi
12 Emailable: EM
13 DM Only
Strategic Planning Value Proposition Program Planning Addressable Media
Direct mail and email testing by segment
Benefits of the this Approach Modeling and
Analysis Profiling
23
Strategy
Deeply understand
emotional drivers
tied to key brand
attributes
among the
battleground based on
interviews and robust
online survey
Assign each
individual in the
battleground to a
segment by linking
survey response to
data available on the
entire battleground
and developing an
analytical model to
assign segment
Bring segments to
life by portraying
each segment‟s
decisioning protocol,
brand relationship,
media usage, needs,
style, interests,
shopping behavior,
wallet size
Also depict actual
segment behavior
Primary Research Modeling and
Analysis Profiling
Develop the plan to
motivate purchase,
including marketing
mix considerations,
experience design
across touch points,
marketing program
strategy
Segment
Strategy
24
Action Plan
Objective
Segmentation as the Foundation of Strategy
25
Illustrative: Segment Strategy
Product Price Channel Media
Caribbean, 7
Night cruises
Ahead of the
competition
Start with a low
price point to attract
Increased focus on
product attributes
and value
DTC, eCommerce
Drive to direct
relationship
between consumers
& brand
15% Direct mail
50% Email
15% TV/radio
20% Social media
Increase loyalty, transition to repeat customers, increase product exposure
Attract with a low price point as an entry to cruising, push for loyalty and
repeat cruising for future wallet share
Up and
Comers
Segment
Strategy
Segment Specific Journeys
Illustrative Customer Journey
26
Segment
Strategy
Cross channel, cross media differentiated
treatment BY SEGMENT. Examples:
Ratings and Reviews for segment A
vs.
Brand Ambassadors for segment B
Wal-Mart for segment A
vs.
AARP for segment B
Lifecycle stage
Touchpoints with different objectives,
strategy by segment.
Illustrative Customer Journey
27
Segment
Strategy
What is
segmentation?
How to approach
segmentation
Segmentation and the
Platform Marketer
• History
• A modern definition
• Applicability to the
Platform Marketer
• Research, Analysis,
Profiling
• Strategy
• Linking to
Addressable Media
Case studies
Agenda
28
Media Planning Tool
29
Outdoor
30
Segment B
Segment A
Direct Response TV
31
Segment A
Online Lead Generation
32
Segment B
Segment A
Website Experience
33
Call Center Experience
34
Segment A Segment B
Welcome Call and NPS
35
Measurement and Attribution
36
Enterprise Segmentation
37
Group and prioritize consumers into manageable “segments”- goal
is to influence brand choice
Enterprise wide unifying concept
Targetable across the customer and prospect universe
Basis for segment strategy development – media mix, offer,
product mix, distribution, message/creative
Organizing principle for addressable programs and input into
personalized programs
Merkle
Shirli Zelcer
Vice President, Merkle Analytics
443-542-4433
Leah van Zelm
Principal Consultant
720-836-2079
