Running Mindset Segmentation

Project Overview

 

The Active Consumer Segmentation Study conducted in March 2011 aimed to understand the diverse segments within the physical and outdoor activity market in the U.S. The study focused on respondents aged 18-85 who participate in activities such as endurance sports, golf, camping, and hunting/fishing. By segmenting the market based on motivation for participation (the key basis psychographic variable) and then overlaying demographics, additional psychographics, technographics, frequency of participation, and activity types, the study sought to identify actionable insights to enhance user experience, increase conversions, and optimize marketing strategies.

 

Business Impact and Objectives

 

The study's findings were designed to impact several business functions at The ACTIVE Network and the consumer-facing website Active.com. By understanding consumer behavior and preferences, the company aimed to enhance user experience, increase conversion rates, and develop targeted B2C marketing strategies. The insights were expected to drive significant business opportunities, such as increasing unique visits, optimizing communication strategies, and identifying new revenue streams through expanded product offerings. The segmentation study provided a comprehensive understanding of the active consumer market, enabling ACTIVE to tailor its offerings and marketing efforts to meet the needs of different consumer segments effectively.

 

Segmentation Approach and Scope

 

The segmentation approach categorized respondents based on various factors, including demographics (age, gender, income, zip code), psychographics (attitudes, values, personality), technographics (use of computers, web, mobile, social networking), and specific activity-related motivations, blockers, and frequency of participation. The data collection process involved surveying 1,500 participants from the U.S. population, focusing on their physical and outdoor activity participation. This detailed segmentation enabled the identification of key consumer segments that could be targeted for specific marketing and product development efforts. The project took about 12 weeks to complete in house with minimal budget.

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Methodology and Research Approach

 

Research Preparation

The psychographic segmentation research began with kick-off meetings to align with key stakeholders on the business goals and understand current customer definitions. This phase involved conversations with business stakeholders and in-house subject matter experts to gather insights into customer behaviors and preferences as well as the key business objectives. Clear definition of objectives and consensus on survey design were crucial at this stage.

 

Qualitative Research

The qualitative research portion of the project involved designing scripts for focus groups and in-depth interviews to better understand consumer attitudes and beliefs about the product category. This stage aimed to capture a comprehensive range of responses that reflect the psychographic dimensions of the target market. The feedback from these sessions informed the development of survey response options.

 

Survey Design and Programming

Insights from qualitative research were used to draft the initial survey, which underwent several iterations based on stakeholder input. The survey was then programmed, using Sawtooth Software, and fine-tuned based on pilot testing. The final survey included sections on psychographics, demographics, and a screener with quotas to ensure representative sampling.

 

Data Collection and Analysis

Data collection was conducted through a third-party survey panel, starting with a soft launch to check for errors. The collected data underwent exploratory analysis and segmentation using K-means clustering to identify viable segments. The criteria for good segments included being:

• Heterogeneous (maximally different on basis variables between segments)

• Homogeneous (minimally different on basis variables within segments)

• Valuable (differences in potential value to the company between segments, e.g. some segments willing to spend more than other segments)

• Identifiable (observable differences between segments so they can be targeted with the right marketing messages)

• Substantial (segments need to be large enough or valuable enough to warrant further investment)

 

Insights/Solution Workshops and Tools

The viable segmentation solutions were reviewed in workshops with stakeholders to discuss their implications, such as uncovering underserved customer segments and suggesting new product opportunities. Results were socialized through interactive dashboards and typing tools, which help in visualizing and predicting segment membership. This comprehensive approach ensured actionable insights that align with business goals and improve customer experience.

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Key Insights

 

Running Mindset Segments

 

The psychographic segmentation study identified nine distinct consumer segments within the active consumer market, each with unique motivations, behaviors, and barriers to participation in various activities. These segments included:

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• Competitive Social Doers

• Health Fitness Looks

• Competitive Social Spenders

• Peaceful Outdoor Socials

• Etc.

 

The analysis revealed that these segments could be grouped into larger meta-groups, which account for 81% of the U.S. population. Motivations driving participation were diverse, including health and fitness, social interaction, competition, and stress relief. Key blockers preventing participation included lack of support, fear of injury, and other competing priorities.

 

1. Segment Characteristics: Each segment displayed distinct demographic and psychographic traits. For instance, Competitive Social Doers are highly motivated by personal goals and achievements, while Peaceful Outdoor Socials are driven by stress relief and the desire for peaceful experiences. The Unmotivated segments, such as Unmotivated Tagalongs and Unmotivated Uninvolved, participate less frequently and are often motivated by social influences rather than personal interest.

2. Barriers to Participation: Common barriers across segments included the fear of getting hurt, lack of fitness, and absence of social support. These barriers need to be addressed to increase engagement and participation among the identified segments.

3. Activity Preferences: Preferences varied significantly, with some segments favoring competitive sports and others preferring fitness and outdoor activities. Understanding these preferences is crucial for tailoring marketing strategies and product offerings to each segment.

 

Segment Value Calculation

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Based on the self-reported participation rates and spend as well the current customer database mining, the Analytics team calculated the potential value of the newly identified segment:

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• Potential value to business

• Current value to business

• Total potential revenue

• Potential % increase in revenue

• Value of 1 pt. incremental growth per segment 

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Recommendations

 

1. Targeted Marketing Strategies: Develop marketing campaigns that address the specific motivations and barriers of each segment. For example, campaigns targeting Health Fitness Looks should emphasize fitness benefits and appearance improvements, while those targeting Peaceful Outdoor Socials should highlight stress relief and peaceful experiences.

2. Customized Product Offerings: Create product and service offerings tailored to the needs of each segment. For instance, offering premium fitness coaching for Health & Fitness Hopefuls or organizing social sports leagues for Competitive Social Spenders can enhance engagement and satisfaction.

3. Enhancing Support Systems: Implement support systems to overcome common barriers. This could include providing beginner-friendly resources to help new participants get started, creating social groups to offer peer support, and ensuring easy access to facilities and equipment.

4. Leveraging Technology: Utilize technology to enhance user experience and engagement. This includes developing apps or online platforms that provide personalized recommendations, track progress, and connect users with similar interests.

 

By implementing these recommendations, businesses can effectively engage and retain different consumer segments, ultimately driving higher participation rates and increasing overall revenue. These findings and recommendations highlight the importance of understanding the diverse motivations and barriers within the active consumer market, allowing businesses to create targeted strategies that meet the specific needs of each segment.