18.2. Designing the Offer
Not surprisingly, before we actually define our customer offers, we want to understand more about the different characteristics of each of the segments we've identified. We know that XYZ has targeted the top 50 customers who owned at least one 815 or 817 series product. They recognize that, within this “best customer” group, there are very different needs and uses for the products. These product uses (applications) were believed to be an important way to personalize messages.
18.2.1. Describing Customer Segments
How the product is used (product application) varies significantly from customer to customer, as does the product configuration they choose to install. In her excellent book, The DMA Lead Generation Handbook (2002), Ruth Stevens emphasizes the importance of customer research to campaign design. Stevens tells us that “Consumer direct marketing research … takes the form of in-market testing [while] B-to-B marketing makes considerable use of primary research such as surveys and focus groups.” In either case the goal of research and analysis at this stage is to better understand the customer's product needs.
As we saw in Chapter 17, XYZ identified five different target segments for the top 50 customers. The actual segments were created based on the site industry code because XYZ didn't have consistent or reliable application data for even its top customers. Table 18-2 presents the customer segments and the usual product use (application) for each segment.
Further analysis of the installed base revealed that the product configurations differed significantly based on the amount of cooling required and the need for air purity. These differences were important in designing a message that had the appropriate value for each segment.
| Segments of Top 50 | Laboratory | Small mfg shop | Theaters, auditoriums | Exercise rooms | Miscellaneous |
|---|---|---|---|---|---|
| Division SIC Code | 8731 | 21xx-39xx | 7832, 799935 | 79xx except 799935 | — |
| Product Purpose | Temperature control for delicate, heat-sensitive equipment in small environments | Temperature control; small or few heat generating tools, machines | Air Circulation; temperature control for large groups of people | Air Circulation; temperature control of sweaty bodies | None specified |
| Typical Product Configuration | Cooling=H
Air qty=L Air pure=H | Cooling=M
Air qty=M Air pure=M | Cooling=H
Air qty=H Air pure=M | Cooling=H
Air qty=L Air pure=M | Cooling= Air
qty= Air pure= |
18.2.2. Defining Segment Value Propositions
XYZ was about to release its new series 82x products. The main advantage of products in the new product line was that the 82x products could be integrated into a 900 Series system, thus eliminating the need for an independent cooling system and significantly reducing power and maintenance expense. However, the air purification capabilities of the 900 series are not as precise as the 800 models, so an extra filter unit was developed that matches the original 800 series air purification standards. The additional filter unit at high air quantity volumes consumes enough power to essentially offset the savings from eliminating the cooling unit, but it is quite reliable and support costs are low. The customer value (benefits) differs fairly significantly based on the segment, as shown in Table 18-3.
| Segment | Configuration | Customer Value Propositions |
|---|---|---|
| Laboratory | Cooling=H
Air qty=L Air pure=H | Lower support contract costs
Increased cooling capacity Equal energy cost due to extra filter step More dependable |
| Small shop | Cooling=M
Air qty=M Air pure=M | Lower support contract costs
Lower energy cost More dependable |
| Theaters, auditoriums | Cooling=H
Air qty=H Air pure=M | Lower support contract costs
Increased cooling capacity Lower energy cost Increased air quantity capacity More dependable |
| Exercise rooms | Cooling=H
Air qty=M Air pure=H | Lower support contract costs
Increased cooling capacity Equal energy cost due to extra filter step More dependable |
| Miscellaneous | Cooling=
Air qty= Air pure= | Depending on customer needs, modular choices that:
Can lower support contract costs Can increase cooling capacity Are equal to or lower than energy costs Can increase air quantity capacity Are more dependable |
With this information in mind, the product team was ready to create the various offers.