Learning Without Scars

S1 E64•October 28, 2021•15 min

Mets Kramer and Ron talk about Defining Segments for the digital world (2 of 3).

Send us Fan Mail (https://www.buzzsprout.com/1721145/fan_mail/new) This Candid Conversation with Mets continues our discussions on the Digital Dealership. This subject considers how market segmentation works and needs to be defined by the generations that are working in the digital world already. We have to have clarity with how we "tag" our clients. The subject of this Podcast is defining how we do market segmentation. Visit us at LearningWithoutScars.org (https://www.LearningWithoutScars.org) for more training solutions for Equipment Dealerships - Construction, Mining, Agriculture, Cranes, Trucks and Trailers. We provide comprehensive online learning programs for employees starting with an individualized skills assessment to a personalized employee development program designed for their skill level.

Transcript

0:00

Aloha, and welcome to another Candid Conversation. Today, we continue our discussion with Metz Kramer on the digital dealership. Okay, now, Metz, we did the good discussion on the audience, and you started to get more specific. I think what we need to do is get into some definitions. I think we need to define the audience in more specific terminology now. Do you think that's now the right place to go next?

0:35

I think that's what you have to do. Once you've identified who your audience is, the next step becomes segmenting your audience to understand.

0:46

So what do you mean by segmentations? For an education, there's the term, the curse of knowledge. Like, I know what you mean, but maybe the audience doesn't. What's segmentation really about?

1:01

Segmentation is taking the... the various things you know about your audience members and deciding to put them in groups so you can deal with those groups differently in the future. And you can use multiple ways of doing that. You can put the same person in one group. You can put the same contacts in four groups. You can use some systems use tagging. But what you're doing is you're attributing attributes to each contact. So that later you can go through the entire audience and pull out a list of certain contacts that meet your requirements.

1:44

For instance?

1:46

For instance, I want to talk to customers that own small farms. And therefore, because I'm in the business of selling tractors or I have a tractor for sale. Then I want the audience segment that specifically I know. owns and operates small farms.

2:08

Okay. That's kind of a business category, almost like an industry category, right?

2:17

Yep. Industry is a segment. So we typically segment people by company types, by industries, and by regions.

2:28

Okay. Take them in pieces. What do you mean by company type?

2:34

Company types would be, for example, contractors, suppliers, or service groups that exist in, say, the same industry. They all are part of the same industry, but the type of work they perform, their day-to-day focus is different. Contractors' business is different from someone who supplies to that contractor. Think of like a... A carpenter versus Home Depot. They're both in the wood industry, but they're slightly different business.

3:13

So you're not meaning to talk about a C-Corp or an LLC or a Sub-S, or it's not the legal company you're talking about. It's more the industry into which they fit.

3:26

The industry and then the type of business they are.

3:32

Meaning?

3:33

Like the difference between a restaurant and a food store. Both sell you food. One prepares it for you and lets you sit down. The other one you take it home.

3:43

Do you have any reference points that you use to determine what those industries are? Is there anything already out there defining these industries that you've found?

3:54

There are several business directories that are in the business of putting... identifying businesses into industries, as well as some government statistics or government directories where businesses register themselves and define what business they're in.

4:13

So this would be things like the SIC code? Yep. Okay, there's hundreds and thousands of those.

4:20

There is.

4:22

Yeah. And then we go ahead.

4:25

We typically do it by learning to understand what the identify with the customer's business is. So if we're looking for contacts for dealers, we teach people to look at websites, understand how to read that and then determine what kind of business it is. And then they code it. But certainly there is, you know, the power method of taking data and crunching it and then assigning people.

4:54

So you mentioned also the Home Depot to the local lumber. area, I guess size of business is a segment that you look at also. Is that true?

5:08

Yeah. Size of business would be a segmentation parameter as well.

5:13

Now, the size of business, if we translate it back into us in the equipment world, we have four different businesses inside the business. We have the parts business, the service business, the sales business, the equipment business, and the rental business. Yep. Do you classify them on size in each of those categories as well within an industry?

5:39

That would be new to me, Ron.

5:42

Yeah, okay. So, you know, and then let me go into a different place because, again, segmentation in defining, and the way that we talked about it in the audience piece was we have customers with whom we've got relationships, we've got prospects. We've got competitors that we stay away from and we've got the universe. And the segmentation and marketing that we teach, we are looking for people that have similar needs and wants. Correct. From us or of us. And the man who has one machine has different needs and wants. And you indicated this yourself to the customer that has 500 machines.

6:27

Correct.

6:28

And so I translate that into size, saying that, okay, I've got industry, the SIC codes, I've got size, but I've got size within each of those four categories of my business because I'm assuming, and give me your feeling on this, I'm assuming marketing to a parts customer and marketing to a rental customer are two different paths.

6:52

Absolutely. Yeah, the difference. is knowing and identifying who they are so that we can tune the message for them. It's the greatest thing we're trying to avoid, especially in a world where you're inundated with marketing messaging, is to tune the message to avoid fatiguing the person who's receiving it by sending information they're not interested in. And all it says is I should ignore messages from this source because, you know, the first five times I looked at it, it wasn't interesting to me. It didn't apply to my business. In fact, that's one of the reasons that MailChimp lists for unsubscribing is it doesn't apply to my business.

7:41

Yeah. Yeah. Right. You know, as an example, one of the things I used to do a long time ago was send postcards thanking people for their business. If I'm thanking people for their business and its parts and the guy buys parts every day, maybe two or three times a day, I got postcards coming at him like you wouldn't believe. So you got to start getting smart as to how you do those things. It gets really strange. The other thing that strikes me is that this means that I've got to have data. I got to know who owns machines.

8:19

Who owns machines? You got to know. how they treat them. I like that you brought up like some of the different departments, probably one of the best known ways to analyze things is the do it with me, help me do it and do it together or do it for me. Segmentation of service customers. Do they have technicians? Do they want everything done? That's a really important segmentation of. your existing customer audience to help you decide what kind of products you're going to put in front of them or what you're going to go talk to them about.

8:57

Yeah. And we've got, yeah, we got really slick with acronyms, didn't we? DIY, do it yourself. DFM, do it for me. DWM, do it with me. And now with right to repair legislation in various states and jurisdictions around the world. We're going to be doing, give me the information to let me do it myself. You know, if I've, if I know how to change the oil in a car.

9:29

Yep.

9:30

And that became problematic when I had to dispose of the oil other than dumping it in the street.

9:37

Or dig a hole in the yard.

9:38

Yeah. And, you know, when I was growing up and living in the country, they used to come by and spray the dirt road with oil to keep the dust down. Yeah. Imagine. in today's world where that would be, you know? So if I have the data, I have to know the machine. If I've sold the machine, my customer, if I sold a machine, but they also have others, my prospect, how do I get the universe of machine population for people whose equipment, they don't use my equipment at all? Are there sources for that?

10:12

One of the most common sources that most people will know is what's called UCC filings.

10:17

Which is the financial arm, right?

10:20

Correct. All financial leases and stuff have to be reported and the information about them reported. And so there are various sources for that in different formats. So you can either just buy it because someone's processed it all. You can get access to things like bankers reporting services that. You can just look up all the documents and find out who bought what and what they paid for it or what they financed. And that's a great way to collect information as well. We've done that for a customer that we just went through the filings and we looked for companies buying certain types of products and then added those customers and that data after the first year to this dealer's CRM. And that gave them a steady flow of new people that they didn't know about, and a reason to go talk to them. Like, hi, you bought that machine a year ago. How's that working out for you?

11:21

So before we go too far, you mentioned the term CRM. What is that?

11:26

Customer relationship management. Okay.

11:29

We got to watch jargon, you and I, because we get too familiar with these things. One of the things that used to, you know, the digital dealership right at the very first podcast and blog you wrote is, We sold the guy a machine. And at some point in time, that machine is going to need to be replaced. Yep. And that you wanted us to be us being the dealership to be notified that, wait a second, this machine's got 20,000 hours on it. It's 10 years old. It's starting to cost this much for operating hour. It's time that we go out and replace your machine and that we have that data, but we don't do anything with it. And that's the opening door, the door opening in the benefit or value of a digital dealership. Is that a fair statement?

12:19

I think that's the definition of it. It's to take information and do something with it. Become cognizant that there's a lot of value in all the information that you're collecting. And you're going to find ways to take advantage of it.

12:32

And then from a system perspective, I believe we have, I'm going to just draw a distinction between data. and information. I think we have all manner of data. We know that stuff, but we don't translate it into workable information for people. Unless you're a data hog and you love dealing with data, which some of us do, you're never going to find out those machines. For instance, I want to know everybody who bought a machine from me in the last 12 months who hasn't spent anything on parts with me yet. Yep. And we have that data.

13:12

Right.

13:13

But we don't put it in a form that it's usable. Fair comment?

13:17

Yeah, we touched on that on the data triggers podcast as well. But data is just sitting there. Information is deriving something from all that data and then doing something with it.

13:30

So that's probably a good place to wrap a bow on the definition. We need to define what the data elements are that we want to have. that we're going to use to define our market segments. And those segments are consisting where we talked originally in the audience with our current customers, our prospective customers, the customers of our competitors, and then the universe. And we've talked about the data elements and the fact that we're looking for people that have similar needs and wants. which opens the door to marketing. So perhaps the next thing we should be talking about is strategy. Does that make sense to you?

14:17

Makes sense. Once we know who's out there and we know enough about them to, and I like how you said that, know their needs and wants. That's really the nicest little summary of what segmentation means is just have enough information or attributes about your audience member to know their needs and wants.

14:38

Exactly.

14:39

You can actually go and build a strategy for each one.

14:43

So let's close this chapter then and move on to the next. Thank you for listening to our podcast. We appreciate your support. Should you have any thoughts or comments, please don't hesitate to contact us at www. learningwithoutscars. com. The time is now. Mahalo.

Mets Kramer and Ron talk about Defining Segments for the digital world (2 of 3).

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