Modernizing consumer segmentation
Editor's note: This article is an automated speech-to-text transcription, edited lightly for clarity.
Purpose Brands used to have segmentation studies for each individual brand. Now, the organization has modernized by creating segmentations for all their brands.
Angelina Iturrian, senior director of consumer insights and analytics at Purpose Brands gave a presentation on four of the key takeaways from this process. Iturrian walked through the study Purpose Brands and Quester did in order to create the segmentation now used across the organization.
Session transcript
Joe Rydholm
Hello everybody and welcome to our session, “Modernizing consumer segmentation.”
I'm Quirks Editor, Joe Rydholm. Thanks for joining us today. We won't have any regular Q&A with the session, but feel free to use the chat tab to submit your comments if you'd like to interact with other attendees during the presentation.
Our session today is presented by Purpose Brands. Enjoy!
Angelina Iturrian
Hi. Thanks so much for choosing to spend your time with me talking about modernizing consumer segmentation today. My name is Angelina Iturrian. At the time of this work, I was the Senior Director for Consumer Insights and Analytics at Purpose Brands.
That is a group that sits in the marketing department. That is a team of consumer insights, individual researchers, as well as managing our feedback system, our CX and then also marketing analysts. So, a fun group of individuals who work across all of the brands that are at the company.
What I wanted to share with you today was some of the great learnings that we took away from trying to modernize our customer segmentation system. I've got four that I think are kind of the key learnings that are especially helpful, at least for us.
The first one shouldn't be a big shocker, but it's listening to the consumer.
When I say that, I mean really listening to the consumer. This time around we were really taking the time to hear what the consumer had to say and put things into the perspective of the consumer, if you will. So when we did the consumer segmentation, I was actually updating the segmentation system for self-esteem brands.
So, this was before we merged. We were self-esteem brands, and we had five different brands that you can see at the bottom, Anytime Fitness probably being the most well-known one, but mostly, as you can see, they're all health and wellness brands essentially. Then we merged with Orangetheory Fitness and that's how we became Purpose Brands.
At the time of wanting to modernize these segments, all the brands, self-esteem brands, were all using a different segmentation system completely independent of each other. And the segmentation systems were very much based on what is the work of that particular brand. So, it was a nutrition segment, it was a fitness segment.
In modernizing the segmentation system, I knew that we would want to create a system that would help unite our brands, and would also be available if we ever happen to acquire additional brands.
It is pretty cool to say that we can actually use the system for any new brands that might come on board. In order to do that, I think the most important part of this was really putting ourselves into the shoes of the consumer and seeing what our services or products are from the lens of a consumer. So, not shocking.
There isn't a part of the brain that's necessarily completely being taken up by just nutrition and from a consumer point of view, we really better understand how they think about our services and products if we understand it from a health and wellness point of view because health and wellness is a much bigger, more holistic way of thinking about it, which is how the consumer feels about it.
Some of this was based on understanding health and wellness from research that McKinsey had started publishing.
We did this after COVID, realizing that people were thinking about health and wellness in a very different way after COVID and McKinsey had already started work and had identified that health and wellness was really several different dimensions, but in the mind of the consumer it enveloped all of these different dimensions.
As you can see there, better fitness is certainly part of it, but it's also about appearance, sleep and mindfulness.
This was really powerful for us because it helped us really think about what we offer as being more of a health and wellness service or product rather than a fitness product or an exercise product or a nutrition product.
It also helped encompass all our brands under one system because we're all health and wellness brands, even some things seemingly not a health and wellness brand, not aligned, like waxing. Well, it turns out that appearance and beauty grooming are absolutely, to the consumer, an important part of their health and wellness journey.
So, then we really focused on identifying what would be the right framework so that we could get at this idea of a holistic health and wellness from that consumer point of view.
To understand at a truly visceral level who the consumer is, not only were we looking at their behaviors and their needs, we actually raised it all the way up to a jobs-to-be-done level.
So, why are consumers hiring and firing our products and services? What are those health and wellness needs that are aligned to that? So, understanding that jobs-to-be-done really helped elevate everything for our segmentation.
Then we even took it a step further and looked at the consumer from a full journey point of view. From beginning to end.
Another important takeaway from the work that we did was that we did in fact leverage AI, but we wanted to leverage it appropriately. I think this is a great conversation that everybody is having at conferences right now from market research, right?
I am going to tell you hands down, one of the most compelling things for me when I was trying to choose which vendor to work with on this segmentation is that one of the vendors came at me with a proposal that included 400 qualitative interviews upfront. And that was amazing to me.
I don't know about anybody else, but if you come from the client-side, you're always trying to find ways to get more for less, right? Because you are constantly being told to pull back budget. And it was super exciting thinking about the fact that we were elevating this segmentation system. We definitely felt like there was a lot that we didn't know. And to hear that we were going to have the opportunity for 400 in-depth interviews was very exciting and very compelling.
The way that the vendor we used, Quester, was able to do that is that they used AI moderation. It was certainly compelling for us to be able to leverage AI in this kind of a new way. But we did have some concerns, and I think it was helpful to see how AI is being leveraged where it's successful. And it turns out that one of the places that it's been most successful is actually in health and wellness.
So, not only do consumers feel more comfortable talking about something like health and wellness, which can be an incredibly intimate conversation, we also see that when an AI moderator has been specially prepared and trained to be empathetic, it can actually come across in a much more positive way than dealing with human beings, in fact.
I thought it was fascinating, right? When you look at patient results, trying to diagnose a problem with AI, AI that has been trained to be very empathetic and caring while they're asking about those symptoms definitely comes across in a very genuine way for a consumer compared to a poor doctor who's just trying to make everything work within that 15-minutes and trying to get as much information as they can as quickly as they could. So, that was very exciting to us that we would be able to leverage AI to interview and really prod and get very deep emotional heartfelt feedback to our questions since we were trying to learn so much.
Then on the flip side, you have 400 interviews. It was a lot. It was a lot of information, it was a lot to take in and then comes the linguistic analysis. And so talking about how you leverage AI and making sure that it's appropriate. On the flip side, the linguistic analysis actually was done by humans, and I think it's really interesting to see how that was compelling for us.
I do have an AI enabled linguistic algorithm from another vendor, and I actually imported all of the interview open feedback in trying to identify some of the jobs that we could identify from a mental health point of view.
When I put it through the AI, what I found was it gave me two different categories. It said fighting negative mental health and combating stressful lives. So, these are two jobs, just jobs that it identified within this mental health category, which we knew was an important category.
Quester, the vendor that we used for this research on the other hand, uses humans who literally go through, they not only go through all of them, they then categorize it and they do all of that in addition to also programming that AI moderator in the first place.
What was interesting is that the humans were able to identify, actually there are three different levels of jobs within that mental health category.
What we see here is that there are individuals who are trying to manage their reaction to external stressors versus individuals who are just trying to manage their internal mood. So, it was actually able to tease out two completely different groups from that one group in the AI.
Then there is that third group of individuals who are managing mental health issues.
One of the things that I think is so striking in this is that you see some of those things that came up in that second group, managing internal mood. These are certain points that we are seeing time and time again, AI struggles with identification. Ideas like boredom, AI really struggles with the idea of boredom. We know that it also struggles with the idea of joy. It really struggles with then also being able to explain it.
I think that's why AI failed to sort of find this unique group, incredibly important for us from a health and wellness point of view because those nuances are a completely different segment.
You certainly have the individuals who go to the gym because they are just trying to manage daily stressors and it helps them take their minds off things. Whereas you have individuals who definitely go to the gym and are very purposeful in using that gym to manage their mental health.
I thought that was such a great nuance that actually turns out to be incredibly relevant for what we do.
So, I was trying to just kind of think about AI and what does it mean to use it where it's more appropriate. And I think it really boils down to how much do we know and how much do we know we don't know.
If we don't know what we don't know, that's when I think we end up at that bottom corner. We don't know enough about the market or the industry, how much information do we know about health and wellness?
In this particular situation, we were still at the very beginning stage, so we needed more information.
Then the consumer, how much did we know about them? Really, we felt like we did have a lot of information from a fitness point of view and a little bit from the waxing point of view, but not really from that bigger holistic idea of health and wellness, which is how consumers think about it. So again, that's where we used a little bit of AI, but it really made sense to bring in that human element because as you're trying to develop ideas. It makes sense to tweak a product or a service with AI very easily if you already have a lot of data that really understands the market and understands the consumer.
Another important lesson for us that we took away from doing segmentation was KISS. Everybody knows this one, I changed it a little bit. We wanted to Keep It Simple and Shareable (KISS).
So, really it was about taking these segments and making them a living breathing thing that everybody in the company, from the frontline all the way up to the C-level, felt they could understand from a really simple and easy point of view. So that they could just pull it out and say, ‘Even my neighbor, I know it. They are definitely a Mind-Body Balancer.’
One of the ways we were able to do that is we created a one-pager.
After the segmentation was done, I worked with our creative team at Purpose Brands who are so incredibly helpful in setting up this one-pager and making it look slick and fun to share across the organization.
They actually helped come up with the names for each of the segments, something that really resonated around the job. So that it was very obvious right away. You knew what the priority job for this segment.
They also gave me a great face. They would be very relatable that reflected that segment.
So, our mind body balancers, they are absolutely individuals who tend to be much more likely to be of a minority ethnicity. They also skew a little bit younger and they're much more likely to be female. And so that was the image that we created to help represent this segment.
We also wanted to make sure that we had the outcome on here that's defined in the consumer language. So, “Help me find a holistic sense of wellbeing,” for the Mind-Body Balancers.
We then had quick facts.
All the demographics that you normally get with a segmentation, a simple synopsis and then the brand alignment. A Mind-Body Balancer is a secondary segment target for our brand Anytime Fitness. All of the brands had their targets on our one sheeter.
Then we had a fun icon that we could use for marketing integration. So anytime we do presentations and we talk about the Mind-Body Balancer, we could use these little icons.
I wanted to share with you proof about how shareable this one pager is.
This is a Zoom within a Zoom right now. I didn't realize I was going to be very meta today, but this was the VP of Digital Strategy. We were in a meeting and I was in the meeting with her and I was like, ‘Oh my gosh, there's the segmentation sitting up in her cubicle.’
So, I took a quick screenshot so that you could see that caught in the wild.
When I was in the office right after we had shared out this one-pager, I took in protein bars and I went around the entire building and put a protein bar into every single office where I saw the segmentation up in their office or sitting in there up on the wall in their cubicle. And I'm very happy to say I gave out almost a hundred protein bars.
That was across HR, our retail team, the customer service team on the phones, everybody all the way up to the C-level, even our CMO has it up in their office.
Then finally, it was really important at this go around that we didn't just think about the segments from a marketing point of view or just from a spend point of view. We needed really robust segments because as a shared service, there are so many capabilities across all of the different brands. So, being able to help digital strategy, being able to work with our creative team, all of that, I wanted to be a capability with these segments.
In order to do that, we did a next phase again of qualitative. It was qual, quant and then qualitative again. That third phase was now about really understanding who the segments were from a very visceral personal point of view.
We created personas for all of the segments, even the ones that we weren't targeting with a brand.
We did that through online diaries, which I'm sure most of you are very familiar with, but also another really interesting approach from Quester called Social Narratives. They have a listening team that actually helps create a more robust understanding of who each segment is from an online perspective.
Essentially what we did is you'll remember again that Mind-Body Balancer doing the diaries and the social listening at the same time; we were able to identify things like what their focus is, what's their mindset and then how we want to help them.
Then focus on the linguistic terminology. So, we could bring that back from that original place and start identifying like, ‘Okay, now we know you are definitely a Mind-Body Balancer. How do you talk about these different types of things?’
From there, they were able to also identify what the kinds of places online that Mind-Body Balancers go, and what are their outside interests?
So again, this is a consumer that is not thinking about their fitness and exercising every single day, all day. What are the other things that are going on in their life that are really relevant that we can tap into as a brand when we are targeting this particular segment?
Then really understanding what their challenges are because that's where our growth opportunities are.
From there, they were able to use their proprietary approach, which essentially is identifying who those Mind-Body Balancers are and then following them across the internet.
So, being able to see where they are, what their hashtags are, what are the specific types of ways that they talk about health and wellness using their language and really understanding who they are from that point of view online.
At the end of the day, this then gave us much more powerful insights and data across all of the different teams in the marketing department.
You can see here just some of the cross-capability applications that we were able to leverage that social listening for. So, working with digital strategy, the SEO team, the CRM team, our CRO team and even our social media content strategy, we know about what their challenges are.
So, here are the types of things that we can really lean into. Something as seemingly innocuous as what is the hero image for website content. Since we knew who our target segments were, we were able to start then leveraging that information to come up with images.
I would work with the creative team, we'd identify, ‘Yes, these are the types of images that should be most compelling.’ We test which ones come out on top and resonate most with our target segments because we could identify them beforehand in the screen in the survey research. Then as we test those images and we know they resonate best with segments, we then put those onto our website.
We also can do testing there as well. But just something, like I said, as seemingly simple as coming up with images, we see that, ‘Yes, these are images that resonate with our target segments, and that is leading to lift.’ We're actually seeing our site lead conversion go up.
CRM, same type of thing. We know these are the phrases that are very interesting to them. We can test and identify the images that should be in that newsletter, and that we know will resonate best with those segments.
What we see is our open rates go up, our click through rates go up and conversion definitely goes up. Because of this targeted messaging, we know that we are more spot on and that we have a better field to pull from.
This is also a great lesson that I like to put out to teams when you're thinking about your consumer segmentation, be thinking about how you're going to be able to show ROI on the other side of things and take credit for this great work. A lot of times with consumer insights, we forget to follow this stuff all the way up.
So, once it's in the hands of the digital strategy team, I think these metrics are also our metrics. This shows the power of using targeted segmentation and making the work that we do much more efficient and effective at the end of the day. So, take credit for these great stats because it really is this work that helps get you to that point.
On that note, I'm going to wrap it up, and I wanted to give everyone a last gift, a parting gift as we say goodbye. And that is that as we see more and more, as I've certainly, as I've been doing more and more research, it's hard to say what business or service is not a health and wellness service anymore. So, consumers certainly really do think about their health and wellness and how that's integrated across brands.
I definitely highly recommend that McKinsey article because it really does talk about how all brands should be thinking about health and wellness because consumers have come to expect it.
So, even if you're just a car manufacturer, consumers want to know how you're thinking about their health and wellness because there is a part of that involved with their transportation and why they choose the car they choose.
This is from our last most recent screener that we did and the work that we did with the segmentation. We were actually able to expand upon the McKinsey research, and we identified 10 different dimensions of health and wellness.
And so, you can see there really how health and wellness impacts everything in our lives. And you can see what people prioritize, what matters most to them. I think it's really interesting.
On that note, thank you again so much for spending your time on my presentation. I know that you're probably very busy as we all and so I do appreciate that. Please feel free to reach out and connect with me on LinkedIn. I love connecting. And to be quite honest, I am going to be part of layoffs that are occurring for Purpose Brands. So in a couple of weeks I will be looking for my new next big opportunity.
So definitely interested, if you have anything that comes your way, please feel free to share. I would love to connect.
If you're interested in the work that Quester does, this was our vendor partner for doing the segmentation. They're the ones who put up with my craziness and telling them, ‘I want you thinking about customer segmentation while you're in the shower.’ They really were such a great partner. And so if you're interested more in their work and that social listening component, certainly please reach out to Tim Hoskins, the president at Quester.
Thank you so much, and again, I really appreciate it.