Market Segmentation Lifelong Learning 2007 Presented by Greg Marsello

Market SegmentationMarket Segmentation

Lifelong Learning 2007

Presented by Greg Marsello

We Must Segment the MarketWe Must Segment the Market…80/20 Principle…80/20 Principle

Why Segment the Market?Why Segment the Market?

• You serve some, but not all, demographic groups. There is no average participant.

• Roughly 20% of your customers give you 80% of your operating margin.

• To know who the 20% is.• To focus resources on that 20% —

programs, staff, marketing.• To make sure you serve your best

customers very well.

Problems Caused by NOT Identifying Problems Caused by NOT Identifying Primary Market SegmentsPrimary Market Segments

• Ineffective program selection• Wasted promotion dollars• Decrease in repeat rate• Reduced operating margin• Wasted staff time

Market SegmentationMarket Segmentation

• A process by which you distinguish or differentiate your various audiences, build a separate demographic profile, and then deliver different products, possibly with different promotions.

The ideal number of market segments is 7

Chart 1: Organization ParticipantsChart 1: Organization Participants

More Recent Less Recent

High Dollars/Activity

25%Highly active

25%Higher dollar/

activity, but notrecent

Low Dollars/Activity

25%Recent, but not

high dollar/activity

25%Least active,

not recent, nothigh dollar/

activity

Chart 2: Net IncomeChart 2: Net Income

More Recent Less Recent

High80%

from mostactive

25%

Low25% -30%

from leastactive

Chart 3: Chart 3: Organization ResourcesOrganization Resources

Time

25% here.This group isunderserved.

25% here.Okay.

Money

25% here.Okay.

25% here.Wasting timeand resources

here.

Chart 4: Chart 4: Efficiency StrategyEfficiency Strategy

Staff Time

Money

Finding Your SevenFinding Your SevenPrimary Market SegmentsPrimary Market Segments

• Step 1: Get registration software• Step 2: Run out your best 200

participants• Step 3: Survey your best participants• Step 4: Analyze your demographics• Step 5: Get data for all participants• Step 6: Now you know

Ideal Software SystemIdeal Software System

Mailing List Word ProcessingRegistration

Brochures

Financial Statements

Marketing Analysis

Room Location

s

Financial Analysis

Master Data FileCustomer

Demographics History




Recency

Moneta

ry V

al u

e/A

ctiv

ity

Know Your Participants & Allocate Know Your Participants & Allocate Resources AccordinglyResources Accordingly




Critical Customer DemographicsCritical Customer Demographics

• Geography*• Age*• Sex• Formal Education

Community Courses/Events


• Geography• Occupation*• Job Title• Age*

Continuing Professional Education


• Geography• Age• Sex• Formal Education• Race/Ethnicity

Credit Courses




Demographic Analysis ExamplesDemographic Analysis Examples

Age Example 1 Example 218-20 20 1021-25 20 7026-30 20 3031-35 20 2036-40 20 4041-45 20 1046-50 20 1051-55 20 556-60 20 561-65 20 0

Example of Analyzing Example of Analyzing Demographic VariablesDemographic Variables

CPE, Seminars, Conferences & Other Work-Related Events

Example 1 Example 2Aerospace (3812-01) 2 16Ambulance Services (4119-02) 4 9Architects and Related (8712) 23 12Attorneys (8111-03) 17 9Bookkeeping Services (8721-02) 15 6Bldg. Mat’l Suppliers (5211-26) 2 8Carpet/Rug Cleaners (7217-04) 5 5Consulting Companies (8742-01) 16 11

Example 1 Example 2Computer Consult. (7379-05) 8 20Convenience Stores (5411-03) 2 9County Gov’ts (many) 1 14Engineers (8711) 14 10Hospitals (8062-02) 7 11Insurance Adjusters (6411-02) 2 12Landscape Contractors (0782-04) 1 9Nail Salons (7931-02) 16 8Printers (2752-02) 4 6State Government (many) 12 16Tractor Dealers (5083-04) 0 9TOTAL 200 200

LERN’s Market SegmentsLERN’s Market Segments

– Associations– Churches– Community Colleges– Free Universities– Co-Op Extension– Museums & Gardens– Hospitals &

Healthcare– Individuals– Private Businesses– Libraries

– Military– Technical Institutions– Parks & Recreation– Public Schools– Universities– Private Colleges– Community Centers– YMCA, YWCA, YHA– Colleges & Schools

within Universities

LERN’s Market SegmentsLERN’s Market Segments

1. Universities2. Community Colleges3. Associations

– Associations were 1% of LERN customers; decision made to grow segment; 20,000 U.S. associations

4. Parks & Recreation

5. Public Schools6. Colleges & Schools within Universities

– Broken out from university growth focus

7. Technical Institutions– Broken out from community colleges to

give priority




Ways to Collect Demographic DataWays to Collect Demographic Data

• Registration Form• Phone Registration• Mail Survey• Confirmation Card/Letter• First Meeting• Contact




7 Primary Market Segments 7 Primary Market Segments

Segment1

Segment2

Segment3

Segment4

Segment5

Segment6

Segment7

DivisionD

DivisionB

DivisionF

DivisionA

DivisionC

DivisionG

DivisionE

Using Segmentation DataUsing Segmentation Data

• Identify which courses/events your top segments take and do more of them.

• Promote more to your top seven segments.

• Offer special deals to your top seven segments.

• Survey them and survey them again.• Find others that look like your best

customers.• Tailor promotions.• Build new desirable segments.

Let LERN Determine Your 7 Let LERN Determine Your 7 Primary Market SegmentsPrimary Market Segments

• LERN’s Segmenting Tool determines primary market segments, carrier routes, repeat rate, LifeTime Value, and star customers, as well as allowing you to generate mailing lists.

• For more information contact Greg Marsello at [email protected].

Thank You!Thank You!

[email protected]@lern.orgorg

Documents

Market Segmentation Lifelong Learning 2007 Presented by Greg Marsello