Tag: mosaic segments

Customer segmentation is an essential component of the marketing manager’s toolkit. The best segmentation solutions provide insight and depth to the brand’s understanding of the customer and guidance to which prospects are most likely to contribute to brand growth. Knowing who these consumers are and what attracts them to a brand enables the marketer to personalize marketing content and persuade the consumer to purchase more effectively. However, even a segmentation developed by a high-quality vendor can be frequently as much a dilemma as a solution. Most often, the underlying data or the algorithm assigning the segments are property of the vendor and may contain data points that are specific to a small number of consumers surveyed, and not the full population. This inhibits the marketer’s ability to leverage segmentation insights to improve targeting efficiency and communication effectiveness. But when segments are mapped to a prospect database like ConsumerViewSM, consumers can be segmented correctly, and communicated with the right messaging that will increase return on investment. Experian Custom Analytics has experience in resolving this segmentation dilemma for clients in a variety of industry verticals. We have designed three distinct methods of mapping segments to a customer or prospect file, each a function of available data: Predictive Modeling Demographic Typing Tool Probabilistic Assignment We will discuss these methods in further detail. Predictive Modeling Predictive modeling is the most rigorous approach. It provides the highest level of confidence at all levels of analysis and campaign execution, from the household up to zip code, market and region. The modeling approach requires a customer file with PII and the custom segment assignment. The PII is then matched to ConsumerView and the custom segments are profiled, compared to each other as well as the US population. An exploratory data analysis reveals the variables most likely to drive segment assignment. Regression analysis tests the significance of these variables and the models are finalized. The final product is a set of mathematical equations or “algorithm”, essentially appending the client’s custom segmentation to ConsumerView. Demographic Typing Tool PII is often not available, but the client or their vendor third party can provide some demographic specifics for the survey participants. The Demographic Typing Tool method can be used to find the most likely Mosaic types. Matching the respondent demographics, such as age, gender, income level, home ownership, presence of children, and most critically the respondent’s zip code, a unique combination or geographic “pixel” is constructed. We might imagine a 25-year-old female residing in zip code 60673 as a very simple example. Her Geopixel in this case could be 25_F_60673. We apply the same pixel definition to ConsumerView, count the matches by Mosaic group or type, and assign the most likely match to the respondent. More data points equate to greater precision. More respondents can somewhat make up for sparse data, but ideally the client could provide both. Probabilistic Assignment In some cases, only descriptive demographics are available, and Probabilistic Assignment can be applied to map custom segments to Mosaic. We have had successful mapping engagements with as little data as a PowerPoint presentation.  If that presentation includes basic demographic distributions for the custom segments, as well as the proportional size of the segments, an equation can be developed that compares the probabilities of assignment to each segment.  Consider a simple 2 segment case with two variables available, age and gender.  Let’s further imagine half of 25-year olds in the client’s segmentation survey were assigned to Segment A and the other half to Segment B.  Our 25-year-old Schaumburg female in the previous paragraph would then have a 50/50 chance of falling into segment A.  But if we also know that 80% of females were assigned to segment B and that the second segment was also twice the size of the first, the probability of proper assignment to segment B becomes much higher.  Thus, the more differentiation across segments the better. Comparing the Methods In all cases, we work with the client for a qualitative as well as quantitative solution.  Segmentation is as much art as science so it logically follows that mapping to ConsumerView through modeling or to Mosaic groups and types must also include a qualitative element.  The mapping needs to make sense when described in words and presented in images.  More detailed data yields more precise results. With PII and segment assignment for each customer, Predictive modeling, using ConsumerView assets, offers the highest level of statistical confidence.  It can be applied to all marketing campaigns and channels.  With at least some geographic and demographic information at the respondent level, the Demographic Typing Tool can be employed with at least medium confidence and is best applied to geographic level campaigns at the zip code or market level.  More observations and more respondent data points will increase confidence at the household level.  Probabilistic Assignment is the method used when only group level demographics are available.  Confidence can range from relatively low to quite high but can still be a powerful tool for guiding market level campaigns.  Confidence increases with higher levels of segment differentiation, more data points, and more precise data distributions.   Conclusion Segmentation is a powerful marketing tool that enables the marketer to personalize marketing communication, increase marketing effectiveness and deliver an improved ROI.  However, for personas to be successful, the marketer must be able to map these segments correctly to current or future customers, so that it can identify which consumers these segments represent and apply the correct communication tactic.  Using one of these methods will ensure that maximum marketing value can be realized from these personas.  

Understanding how consumers move through life stages is important when trying to communicate effectively. As a marketer, you need to differentiate your messaging strategy from competitors with the goal of drawing prospective customers towards your product offering. Experian’s Mosaic® segmentation solution assigns consumers to 71 different types using geographic and demographic attributes based on the consumer’s current life stage. However, as consumer circumstances change, marketers need to predict what life stage consumers are likely evolving into so they can employ the appropriate marketing strategy for customers and prospects. Let us look at Dana as an example. Dana is a 32-year old, married female, college-educated, with two young children, on the verge of career promotion. She and her spouse have recently purchased their first home. As they settle in with their children, aged 2 and 4, they are looking into saving and investing for the future. Dana is ambitious to advance in her career and make more money so that she can save for a bigger home as her family needs more space. She is also planning for a bigger car and future college expenses for her children. Today, Dana falls within the Promising Families Mosaic group. However, over the next few years as she is charting her future, she gets older, her income increases, her children age, and her lifestyle evolves. Dana is more likely to transition to the Flourishing Families or Power Elite Mosaic group. If a marketer could predict the shifts that Dana is going to make in life, this knowledge could help to proactively target her earlier to build brand awareness and meet her changing needs before the competition. Knowing these changes provides marketers a huge advantage over the competition and enables more profitable growth through proactive targeting. Experian has developed ConsumerViewSM Trending data that enables marketers to see how consumers migrate over time. The purpose of this analysis is to: Understand changes in Consumer Segments data over time by assessing dominant segment groups prior to the current groups Evaluate stability of Mosaic segments over time Predict potential groups the Mosaics are likely to end up in the future Understanding the Evolution to Power Elite One of the most affluent Mosaic Groups is the Power Elite. They are the wealthiest households in the US, living in the most exclusive neighborhoods, and enjoying all that life has to offer. The study reveals that approximately 46% of the Power Elites evolved from other Mosaic groups, predominantly B-Flourishing Families and C-Booming with Confidence. Consumers more likely to become a Power Elite are affluent middle-aged families and couples, living active and prosperous lifestyles. These consumers have children in the household, enjoy family-oriented activities and have a high credit card usage. They also are more likely to invest for the future and are saving money for their children to attend college. We recommend strategically targeting segments that will potentially migrate to the Power Elite segment using digital media channels like email and Streaming TV. The recommended advertising messaging should emphasize product or service quality. Understanding the Migration of Promising Families and Young City Solos Promising Families are young couples with children in starter homes, living child-centered lifestyles. They are savvy researchers when making buying decisions. The study reveals that this group exhibits the most migration to other groups with more than 30% of them evolving to D-Suburban Style, B-Flourishing Families and A-Power Elite. Since Promising Families tend to migrate towards D-Suburban Style, B-Flourishing Families and A-Power Elite, marketers should consider promoting to this group using a messaging that emphasizes benefits, such as living in a bigger home with extra space for entertainment and raising children. Media channels that resonate with this group include digital display, mobile SMS and streaming TV. Young City Solos are younger and middle-aged singles living active and energetic lifestyles in metropolitan areas. They are organic, natural and savvy researchers who value quality when making buying decisions. More than 20% of the Young City Solos had evolved to A-Power Elite, K-Significant Singles, and E-Thriving Boomers. Young City Solos should be engaged via digital media and promote products or services that highlight quality experience. Since this group exhibits authentic buying styles, a marketing strategy can highlight the advantages of leasing as opposed to buying. Summary Since there is no “one-size-fits-all” in marketing, it is incumbent on marketers to understand the unique needs and characteristics of each consumer and devise a messaging and marketing strategy that meets those needs of the consumer segment. We recommend that marketers: 1. Know your target customers, and where they are in their life cycle. Marketers must know who their target customer is, and where they are in his or her life cycle to be effective. Knowing this helps them understand what the consumer’s needs are, how those needs are changing, and how those needs can best be met. 2. Proactively engage targeted consumer segments prior to the lifecycle transition. Proactive engagement builds brand awareness and creates new opportunities for marketing. Doing this before a consumer evolves in its lifecycle transition gets the consumer’s attention before a competitor, and may initiate the brand to a consumer about to experience a new need. 3. Communicate to the consumer through the right marketing channel. Younger, more up-and-coming Mosaic Groups such as Promising Families or Young City Solos are more receptive to digital channels like mobile/SMS, digital display or streaming TV, and less so to traditional marketing channels like direct mail or newspaper. By knowing who these target consumers are and how they get their information, marketing effectiveness will be improved.