Using Customer Segmentation to Guide an E-service’s Differentiated Marketing and Product Development Strategy

An online service that provides subscription-based family history research to consumers was interested in profiling its core subscriber base and prospective customers in the U.S., Australia, Canada, and the U.K. The purpose was to develop a tailored marketing strategy and support product development activities. A common issue faced by e-services companies is that they typically have a large amount of data on customers and visitors’ behaviors on the site, but understand very little about the motivations and needs that drive behavior.

To address the client’s goals, Rockbridge designed an online customer segmentation survey that included motivations, barriers and needs, indicators of value as a customer and targeting variables. Rockbridge then invited subscribers by email and intercepted prospective customers from the client’s website to complete the survey.

Once data collection was completed, Rockbridge conducted a segmentation analysis to profile customers and prospects based on latent groupings in the data. The analysis included both survey and behavioral data from the client’s data warehouse. A goal of the analysis was to ensure a high rate of predictive accuracy of the segments using only subscriber database elements to allow the company to score its entire customer base without collecting additional survey data. In contrast to a pure database segmentation, the use of survey questions in the development of the segmentation ensured an understanding of motives and product needs to guide a differentiated marketing and product development strategy.

Rockbridge provided a report that profiled each segment using survey and behavioral data to help socialize the segmentation throughout the organization. The report included recommendations for communications messaging and the types of new products that would be of interest to each segment. Rockbridge also provided algorithms that the client used to classify subscribers into segments based solely on information in their data warehouse.

The study design and analysis provided the opportunity for the client to predict the motives and behavioral drivers of individuals with a high level of accuracy, refine their personas to guide product development efforts, and ultimately implement differentiated marketing and product development strategies.