The origins of segmentation

The coolest segmentation and mapping solution you ever saw: how
it all began 100 years ago with 1 man December 2012

We struggle because we can’t handle the planning
requirements As marketers we are pretty crap at managing 1:1 relationships

Creating individual plans and objectives for each customer
is impossible As marketers we are pretty crap at managing 1:1 relationships

Even targeting communications to individuals is hard Finding
the optimal combination of offer and content for each customer As marketers we are pretty crap at managing 1:1 relationships

Instead we use segments And we use segmentation
techniques to create them The reality is that we manage relationships with groups of consumers

And we do this because It is easier
to manage relationships with a groups Rather than individuals The reality is that we manage relationships with groups of consumers

If we are talking about existing customers then
we often have behavioural data to play with Tesco and Woolworths think You are what you buy And generally they are correct The reality is that we manage relationships with groups of consumers

They use this wealth of information to create
multiple segmentation solutions Across multiple dimensions Which they use to manage relationships with their shoppers The reality is that we manage relationships with groups of consumers

But what do you do if you don’t
have access to data at this level? Or If you are looking at acquisition opportunities? The reality is that we manage relationships with groups of consumers

Where do you get the insight that allows
you to plan your communications strategy? To create relevant offers and content Using appropriate imagery Across preferred channels The reality is that we manage relationships with groups of consumers

You start with generic segmentation solutions And there
are lots of them The reality is that we manage relationships with groups of consumers PRIZM

These allow you to break the population up
Into a series of segments To better understand your target market The reality is that we manage relationships with groups of consumers

They all classify consumers based on where they
live The assumption is that you will be more similar to the people who live in your neighbourhood Than those who live in other neighbourhoods The reality is that we manage relationships with groups of consumers

“Birds of a feather flock together” So in
the absence of knowing more about you You are where you live The reality is that we manage relationships with groups of consumers

And we known this to be true The
reality is that we manage relationships with groups of consumers Bondi Penrith

The segmentation industry as we know it today
began over 100 years ago with this man Where did segmentation begin? Charles Booth (1840-1916)

He was a wealthy businessman who made his
fortune through shipping But he had a bit of a hobby He devoted almost 20 years of his spare time to a study of poverty At a personal cost of about £1.3 million in today’s money Where did segmentation begin?

Where did segmentation begin? Booth's circle of friends
regularly discussed the social problems of the day Perhaps the most pressing in the rapidly growing Victorian cities was that of poverty This was often sensationally reported in the contemporary press to provoke fear amongst its readers Booth recognised the importance of a true description in facts and figures of the social landscape. In 1884 he undertook to assist in the allocation of the Lord Mayor of London's Relief Fund, by analysing census returns

Where did segmentation begin? From this he discovered
that the census, at that time, was not fit for purpose A report was published in 1885 that stated up to 25% of the population of London lived in extreme poverty Booth disagreed and told the author that "in his opinion he had grossly overstated the case“ And that he would himself be undertaking an inquiry into the condition of workers in London

Where did segmentation begin? The outcome of this
work was published under the title Life and Labour of the People in 1889 A second volume, entitled Labour and Life of the People, covering the rest of London, appeared in 1891 This was later expanded between 1892-1897 A third volume was published as Life and Labour of the People in London in 1902-1903

Where did segmentation begin? Booth and his team
of researchers recorded a huge amount of data over the years of study The survey methodology was complex and original Booth attempted to understand the lives of Londoners through an investigation of 1. their places of work and working conditions 2.their homes and the urban environments in which they lived 3. through the religious life of the city

Where did segmentation begin? Investigators accompanied London School
Board visitors, and policemen on their beats They interviewed factory owners, workers and trade union representatives at their places of work or in their homes They visited ministers of religion and their congregations The data they gathered was then used to generate statistical evidence of the living and working conditions of Londoners

Where did segmentation begin? Originally he wanted to
collect data for every family in London He began in Tower Hamlets and worked his way through Hackney Soon realised that this goal was unachievable They collected information for the rest of London on a street by street basis

Where did segmentation begin? The study identified 8
categories of social class based on their degree of poverty

Where did segmentation begin? Each street was the
put into a segment and the results mapped

Where did segmentation begin? It’s the black areas
that are the most interesting “Lowest Class, Vicious Semi Criminals” He expanded on this description This doesn’t sound like Mosman

Where did segmentation begin? West End

Where did segmentation begin? Bayswater

Where did segmentation begin? Borough

Where did segmentation begin? Limehouse

Where did segmentation begin? Booth popularised the idea
of a “Poverty Line” He set this line at 10 to 20 shillings Which he considered to be the minimum amount necessary for a family of 4 or 5 people to subsist Through his work Booth finally identified that 35% of Londoners lived in poverty

Where are we today? Booth’s work was eventually
the start of the modern movement In 1966 Richard Webber was working at the Centre for Environmental Studies investigating measures of social deprivation in Liverpool He used data from the 1966 Census to build a ward level classification that identified deprived areas with different needs

Where are we today? In 1979 Richard went
to work for CACI where he built Modern Geodemographics was born This was immediately overlaid onto TGI to allow the segmentation to be cross tabulated with the UK’s largest market research sample

Where are we today? In 1985 Richard left
to join CCN - which later became known as Experian The largest business services company in the world In 1986 they launched Since then Mosaic has taken over the world

Where are we today? There is even here
Which we are currently using on Aegon to identify the target market for launch and to create value propositions for their Insurance products

Where are we today? Segmentation is now a
multi billion dollar market worldwide And it was all started by a ship owner from Liverpool who wanted a better view of the scale of poverty in Victorian London [email protected]

The origins of segmentation

The origins of segmentation

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