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SBJ/May 2-8, 2011/Opinion
Market segmentation delivers better efficiency, more sales
Published May 2, 2011, Page 13
How can they respond to this challenge, cut through the clutter, and identify the keys to continued business growth? For many, a logical first step is to gain a better understanding of both fans and potential fans via market analysis and segmentation.
Database in market segmentation
Market segmentation is the act of parsing customers and potential customers into subgroups by identifying each group’s unique characteristics and traits. Teams and organizations can use that information to leverage the value of each segment and connect with segment members in an efficient, customized and personal way.
In a recent study executed by Turnkey Intelligence, 80 percent of team-side respondents working in the NBA, NFL, NHL, MLB or MLS identified CRM and database management as an “extremely” or “very” valuable component of their organizations’ daily business practices.
This finding illustrates the increased understanding of the importance of segment-based marketing. No longer do teams perceive all fans as leads for the exact same things. Rather, there is a shift toward using customized approaches to pitch small groups or individuals specific products or experiences they’re likely to find appealing.
Targeting sales, marketing
Sales representatives are motivated by success, and, as such, it’s imperative for managers to ensure that the representatives are best positioned to succeed. A simple way to accomplish this is to use defined database segments for marketing and product matching. This will lead to more efficient mail campaigns and sampling programs, customized sales calls, and elevated close rates.
Russell Scibetti, senior manager of database marketing and CRM for the New York Jets, has spent the past 18 months putting a detailed customer management system in place at his organization and is seeing results. “Thanks to the breadth of data stored in our CRM system, we are now able to analyze our customer base down to the individual. By segmenting our prospects and customers based on a variety of factors, we have improved the efficiency of our sales and marketing efforts and are now building customized programs to deliver a better experience to our current customers,” he said. “As part of our most recent club seats sales campaign, our client relations staff called a hand-selected group of prospects that had been winnowed down from a much larger database based on a combination of demographic and behavioral attributes. This increased our efficiency, and ultimately, our conversion rate.”
Segment profiles also help inform decisions about what new leads to pursue by identifying which consumers most closely resemble current product buyers. Arming the sales team with these “look-alike” leads helps representatives engage and close at an above-average rate, increasing efficiency and saving money.
“Identifying the characteristics and affinities of our current buyers and fans, and then using that information to segment out our consumer profiles has helped us frame our sales and marketing efforts, enabling us to cut through the clutter,” said Robert Rardin, interactive marketing manager at the Orlando Magic. “Learning as much as possible about our consumers and modeling that information out allows us to mirror those aspects in new leads and lists and thus have a better chance of appealing to them in the right way. It makes more sense for us, and saves both time and money.”
Unique marketing partnerships
Database segmentation also benefits sponsorship sales teams by arming them to offer opportunities to nontraditional potential partners, as the Baltimore Ravens do in conjunction with their official female fan group, the Purple Club.
The Ravens’ Purple Club events for women help draw support from nontraditional sponsors.
According to Gabrielle Dow, vice president of marketing at the Ravens, her club has successfully attracted nontraditional sponsors like Celebrity Cruises to the Purple Club by touting member demographics. Dow noted that the Lavender Ladies (predominantly middle-aged professional women without children at home) are especially appealing to partners. “When we told Celebrity Cruises the Lavender Ladies demographic was ages 45 and up, they loved it,” said Dow. “They absolutely understand the power of this segment.”
Dow affirmed that these partnerships are often “wins” for both sides: They give teams a chance to leverage an existing asset to tap into new categories and increase revenue, and enable participating companies to associate with the team’s brand and gain direct access to a valuable consumer subset.
The Washington Capitals also target nontraditional marketing partners by highlighting a very specific segment of their consumer base: members of the military. By offering niche businesses like technology and innovation companies the opportunity to get involved in the club’s many military-focused programs (theme nights, ticket giveaways, etc.), the Capitals are able to open new sponsorship categories, establish connections with companies highly relevant to a core market segment, and deliver new partners access to an extremely specific target market of armed forces personnel.
Market segmentation will enable an organization to operate more efficiently, forge new partnerships, tap into new niches and opportunities, and increase revenue. It’s a simple, cost-effective way to identify the assets that already exist within a customer base and use them to create opportunities.
Emily Huddell (firstname.lastname@example.org) is senior vice president of client sales and service at Turnkey Intelligence. The Capitals, Jets and Magic are among Turnkey’s 70-plus professional team and league clients.