Module: Customer obsession. Topic: Customer personas versus market segmentation. In this lesson, you will learn to articulate the difference between market segmentation and customer personas, segment your product's market, and draft and critique customer personas, market segmentation is the idea, different customers of your product are motivated by different incentives. Market segmentation was invented in the 1950s and quite revolutionary as a departure from then- cutting edge assembly line manufacturing. A common way to segment the market is by price, for example, Procter & Gamble segments its Bounty paper towels by price. Here are: Basic for economy buyers, Bounty, the one we probably see, the most common, the mid-level towel, and DuraTowel, a premium towel that consumer reports say blew away the competition. What is one problem with market segmentation? Well, one problem is that it allows you to go on forever, you can trend towards infinite product variation. Bounty paper towels lines also include extra soft with Dawn water-activated detergent. Prints with a selection of different prints: animals, stars, emojis. Huge. Thick and absorbent. Select-a-Size for all of the above and that's not even mentioning their selection of non-household, industrial- use paper towels. Now you see my point, the results and selections are infinite. So how does Procter & Gamble know when to stop making products engines? How will you know when to stop? Because certainly if as a PM, you keep on going forever, you're going to end up in a rabbit hole and it's also not productive to your end customer. A customer persona is a representation of the demographic and psychographic characteristics of one of your customers. We also call these personas, user personas or buyer personas. Demographics are factors such as your customer or potential customer's, age, gender, income and location. Psychographics are motivations such as your customers goals, aspirations and pain points. One psychographic question should always be, why should I use your product? Some psychographics can even be so detailed to include what the customer sees, hears, thinks, feels, before, during, and after using your product. Finally, you describe how your product satisfies the needs and aspiration of each group. So that's a customer persona. But now you might be thinking, how's that different from segmentation? Well, since customer personas came into use in the late 1990s we have data on companies that started using them. First, companies that start using customer personas experience surges in sales, Intel increased sales by 75 percent. Thomson Reuters increased their sales by 175 percent, why? Well, often you'll find that only a handful or personas account for your sales, in some industries, over 90 percent of sales come from only 3-4 personas. This can help you allocate your resources towards the personas that are most supportive of your product to maximize sales, we call these personas your target personas. Likewise, other customers are anti personas and anti persona is not someone you hate or blacklist from your product, far from, but we're not going there in that course. It's simply someone you don't extend resources reaching out to because you know who your target personas are and they're not part of your target. Now that you understand why customer persona mapping is valuable, it's time for our first see one, do one, teach one exercise. I'll use HubSpot make my persona tool to demonstrate how I would create a target persona for this Coursera course. So as you can see, I have the HubSpot make my persona tool page pulled up. I click on Make my persona, so your first step it's really cute, they have selector avatar. So select my avatar. I'll name my avatar, Stacey the PM, now moving on. Again, keep in mind, this is our target demographic for this Coursera course. So I'm hypothesizing that most of the students taking this course will have maybe finished their MBAs, a few years into their jobs, or looking to do a job change soon. So let's say you're between 35-44 years old, what is the highest degree or level of school your persona has completed? So let's say they have completed somewhere around a master's degree. Let's move forward. What industry do they work in? So let's say currently, they're working in technology already, but looking to get into a product management role. What is the size of the organization? Now, I also hypothesize most of my students are going to come from mid-size organizations, so somewhere between 1,000 to 5,000 employees. What is their job title? All right, let's say the are currently a project manager looking to search into product management. How is their job managed or measured? Success of projects managed, on-time delivery. Who do they report to? Let's say they report to the director of IT. Okay, moving on. What are their goals or objectives? On-time project delivery or they might be measured by revenue. What are their biggest challenges? Well, certainly if you're a project manager and you're navigating across many different groups, it could be navigating customer relationships and communications, it might be change management, it might be project management disorganization, might be communication, might be problem-solving. So I see that this role covers quite a few aspects. All right, let's move on. What tools do they use or need to do their job? Let's see, probably some project management tool, definitely e-mail, definitely reporting. Because after all, you need to let your leadership know what percentage of projects are on track. Probably some business intelligence dashboards, word processing to create those reports, and let's say cloud-based storage, and file sharing applications for now. How did they gain information from their jobs? Well, internal stakeholders as a project manager. What social networks do they belong to? Let's say they have a Twitter account, let's say they have a Facebook, an Instagram, LinkedIn, all the usuals. All right. This is where, again, I think HubSpot does a great job with this, is it creates a persona overview. It lists out out, Stacey the PM, different characteristics like age, highest level of education achieved, social networks, industry, organization size. Here as we move onto different little pluckers here, preferred method of communication. Well, let's say Stacey the PM prefers to communicate via weekly engineering stand-ups. What are her job responsibilities? Her job responsibilities are to maintain a schedule of upcoming feature launches. Let's say that, this tool clearly has already self populated, but the fact that they report to the director of IT, and they gain information from internal stakeholders. The tools they also need to use to do their job they've already listed from my prior selections include project management tools, e-mail, reporting software, business intelligence dashboards, word processing systems, cloud-based storage, and file sharing applications. This job is measured by the success of projects managed or on-time delivery. Goals or objectives, on-time project management, which then tie into revenue, and some of their biggest challenges as a project manager, of course, some of that negotiation, communication, timeline tracking, change management. For example, if you're trying to implement a new process into your organization, there will be an element of change management involved into your process, and definitely some problem-solving, and decision-making as well. All right, so now that you see that word done with creating a very high-level overview, of course in a real exercise, hopefully you would spend more time on it and be more defined in detail, is the next exercise. Identify a product and draft an original customer persona for it. You're welcome to use any framework such as this HubSpot framework, or simply type in plain text. Review another student's customer persona. Does it include demographic information? Does it include psychographic information? Doesn't make sense. Does it reflect significant thought?
