Using Customer Motivation and Values to Segment your Customers
If you want to drive relevant and engaging conversations with your targeted customers its extremely important to build a better understanding of who they are, what is common amongst them as well as what makes them unique or different. Most importantly it is critical to gain an understanding of specifically what about your brand, product or service that attracts them. Doing this is the practice of customer segmentation. Yet customer segmentation can be done in many different ways with varying degrees of success.
I have found thru my experience that doing customer segmentation based upon motivations, values and attitudes is the best method of helping CMOs and Brand Managers gets at the heart of why customers have an emotional connection to your brand.
The method I have used to get at these key motivations, values and attitudes is to leverage a unique combination of both qualitative and quantitative research leveraging a few different frameworks. One of the frameworks I utilize when doing this research is Bain & Company’s B2C Elements of Value Framework (diagram below). This framework is leveraged along with advanced clustering algorithms (e.g., k-means, etc.) to arrive at unique and differentiated customer segments. Reach out via Talk with Us button below to learn more.
The findings behind the Elements of Value Framework are that:
Companies that perform well on multiple elements of value tend to have more loyal customers than the rest.
Companies doing well on multiple elements of value have been found to grow revenue at a faster rate than their competitors.
Winning companies understand how they stack up against competitors having chosen methodologically which incremental elements of value to deliver over time.
These elements of value address four kinds of customer’s expectations, wants and needs:
Functional
Emotional
Life Changing
Social Impact
with higher levels of Value being delivered at the top of the pyramid than the bottom of the pyramid.
In customer segmentation research I recently performed for Toronto-based Canada Goose, a maker of high-end winter parkas, jackets, and accessories, we found several of the above elements of value at play across their customer base.
At the Functional Level their winter parkas simplified things for customers having to commute or go out on the town in cold climates reducing the need for layering and avoiding the hassle of putting on and/or taking off layers. Many valued their Canada Goose winter parka for both its warmth and attractiveness. In addition, when trying on a friends jacket or trying one on in the store, there was a sensory appeal to the jacket in how it fit, the weight of the jacket, the security one felt.
At the Emotional Level the design/aesthetic of the jackets are simple in design and function. This appealed to many customers from a fashion standpoint. In addition, the overall warmth of the jacket reduced anxiety whether they were braving a winter storm on their local commute, in the field serving clients, working outside in the elements for their job, or having fun snowmobiling in the back-country.
At the Life Changing Level we found that people were seeking affiliation and belonging. For many people, owning a Canada Goose jacket was one of their few luxury purchases. Many followed Goose People, ambassadors of the brand, everyday heroes, whose journeys, achievements and “can do” attitudes inspired them. Owning a Canada Goose jacket made them feel like they were a part of something bigger then themselves. For Canadian owners specifically there was a sense of pride in owning a Canada Goose jacket given the heritage of the brand.
At the Social Impact Level, many owners recognized Canada Goose for their commitment and support to Polar Bears International whom lead the fight to identify polar bears as being endangered species and continues to drive efforts to protect them along with their arctic environment. As well, they celebrated Canada Goose for its support to the Inuktitut people in Canada’s North by donating high-tech fabric to the local community to sew and make their own clothing.
Elements of Value can differ by Customer Segment
We also found that different elements of value were more important or less important to different customer segments. In addition, their motivations for being outdoors in the winter cold varied. Here are a few simple examples of what we found:
For the more fashion and style oriented segment, the simple, functional design/aesthetic of the parkas enabled them to wear it across many occasions. In addition, when buying for their family, seeing their kids wrapped in a Canada Goose winter parka, reduced their anxietywhile spending time in the bitter cold whether skating on a frozen lake or taking a winter hike. Their motivation for spending being outdoors in the winter cold was to spend time with family and/or find peace, quite, and solitude.
For the winter outdoor adventurer, they felt a sense of reduced risk while out in the back country whether hunting for game with their son or daughter or snowmobiling with their friends. Their motivation for being outdoors in the winter cold centered around seeking excitement and adventure while braving the elements.
For the trend-conscious youth segment, it was the badge value associated with wearing a Canada Goose jacket. People recognized it when worn on the street from a distance given its iconic patch. For them, it represented one of their few luxury purchases. Their motivation for being outdoors in the winter cold was mostly spending more time with their friends hanging out on the town, not being limited by the bitter cold.
Each of the different segments (five in total) we analyzed and defined had their own unique set of motivations and values that formed the essence of who they were as a segment and what their common bond was with Canada Goose and its products.
In Closing
If you are trying to figure out the specific values that are at the heart of why different customer segments value your brand, remain loyal to your brand, I highly recommend taking this approach. Your marketing efforts will become more focused and tailored to the different segments you are trying to reach. Hope you enjoyed the article!