Target Markets versus Communities

I was trained to be a target marketer. When I started in business, the internet did not exist and the primary way we grew market share was through direct marketing. Direct marketing involved "pushing" a message to a target market using a marketing channel like direct mail, telemarketing, magazine advertising, etc. When done right, this type of marketing attracted some members of the target market to respond to our offer thus allowing us to analyze who responded and who didn't to improve future marketing campaigns.

From a marketing perspective, the key to success was our ability to identify a target market. To do this, a direct marketer has several "tools" they could use to develop a likely target market for any B-2-C or B-2-B offer. The tools were:

• Behavioral data - In a push marketing campaign, direct marketers generally look for list which are likely to hold the same type of prospects they will want for their effort. For example, womens fashion catalogs often swap their lists because they know if a woman purchases from catalog "A" they have all of the desirable behaviors to purchase from catalog "B". What are these desirable behaviors? Direct marketers use the term RFM & P to define them. They are:
• R - Recency A person who recently purchased from catalog "A" they will be "in the market" and likely to consider other similar offers. This is why you frequently receive a number of offers from companies shortly after you purchase from one. Because you are a recent purchaser, they know you will be more likely to read & purchase from another company ... as opposed to an individual with less recency.
• F - Frequency If you are a multi-time purchaser, you are more likely to purchase again for a similar product.
  
• M - Monetary value - If you have purchased in high dollar amounts you are likely to be better than another individual who purchases in less dollar amounts.
• P - Product If you purchased a product which is like mine, you are more likely to purchase from me. This means a womens catalog purchaser is better for another womens catalog compared to a mens catalog
  

• Demographic - In addition to RFM-P variables, direct marketers also used demographic data which described the household and its members. Important variables include age of the head of household, age of both adults by gender, number of children, age of oldest child, income of the household, geographic region, types of autos owned, etc. They describe the household.

Which brings us to another topic. My wife - the bowler. My wife is a member of a bowling league here in Naperville, IL. If you were a direct marketer who had a bowling magazine or bowling catalog, would you target my wife. Let's look at the "facts"


If you consider RFM-P let's see how she looks.

• She is a bowler so she has the "P" covered.
  
• She has just started her current bowling league season so her recency is strong. She has just exhibited a desired behavior - she is bowling - and she is doing it now!
• If you look at her history, she has bowled in this league over the past 7 years and, of the 4 bowling seasons each year, the league bowls during 3 of them. So from a "F" perspective, she is extremely strong.
• From a "M" monetary perspective, she spends a fair amount on bowling with league and lane fees, lunches after each weekly match, travel, etc. She has her own ball, bag, shoes, and other required accessories.

From a demographic perspective, she is female, in her 40s, in one of the highest wealth areas in the country, upscale SUV [hybrid], family with children of college & high school age. Everything is right for a bowler who could purchase your bowling magazine and pay for the subscription.

HOWEVER, you would be wrong in targeting her.

From a direct marketing perspective, my wife is the ideal target for a bowling product but the picture is incomplete. My wife is a terrible bowler. She rarely exceeds 100 and her team has found that the best prizes are given to the first place team - which they will never become - and the last place team [which they can easily win]. But they don't place last because they simply want to be bad. They do it for another ... much more important ... reason.

She doesn't bowl because she loves bowling...she does it to be in the "loop" on gossip on the Naperville / Lisle communities. The bowling league contains all of the "whos who" of our area and, if you want to find out what is happening in area politics, social groups, school districts, etc, you need to be in the league. This is where the information is distributed throughout the community and where key issues are discussed and action plans evaluated. It is the hub of our local neighborhood social structure.

My wife bowls poorly because, if you are wasting time aiming your bowling ball, you might miss something. She and her team often just grab a ball, roll it, and quickly return to the discussion. If they do it quickly enough, they don't miss anything.

Target Markets versus Communities

The difference between target markets and communities is that target market describe a household based on descriptive elements as well as recently completed behaviors. It is always looking back in terms of behaviors and looking at broad demographic data. Even the most exacting demographic / behavioral data is never really describing any one household but a collection of thousands of households.

Communities are different. The community my wife belongs to is not a bowling community but a "gossip" community. Her bowling is defined by the other activities which attract her ... not the bowling activity. It is just an "excuse" to meet each week with other women to discuss key issues. Essentially, the bowling league in Naperville is a far better marketplace for local politicians than it would be for bowling vendors. Essentially, if you want anything done within Naperville / Lisle, you need one or more groups of people within the bowling league to support your endeavor. It is that powerful a group and that cohesive of a community. That is why it has existed for so long and is so strong.

The key is that communities are defined by the members and are self-forming and self-regulating. Each season, the women reform their community and simply "pick up" where they left off. The key is they know the bowling league is not for bowling but to exchange information important to the community. They would tell you that if you asked them about the league. They know ... and will tell you if you asked them.

Target markets, on the other hand, are defined by marketers using past behaviors and descriptive data to predict future purchases. It does not really know or consider the attitudes and exact needs of any individual.

While we exist in target markets, knowing our community involvement and understanding the community is a much more powerful tool for marketers. In future blogs, I will give you some specific actions you can take to both identify communities and determine how to ID them when they visit your website.