Your Core 20

In a business' quest to excel, there’s often a tendency to focus on several segments of the target, from hard core fans to casual users.  But the “80:20 Rule” has always pointed to better results by gearing efforts toward the smaller part of the customer base that produces the greatest return.

A couple of Decembers ago, Arbitron featured Bill Black, a Starbucks marketing pro, who boiled it down well.  Starbucks essentially has two core groups – “Super Regulars” and “Coffee House Enthusiasts.”  While other segments contribute to the whole, it is these two types of customers that drive the majority of their revenue.

Most businesses operate this way, and yet, radio programming debates abound as stations often try to “convert” P2s into P1s while often not super-serving those folks who are already very core to the station in the first place.

A new infographic (and a slice of it is below) does a nice job of illustrating the “80:20 Rule.”  Note that the rule was first developed more than 100 years ago.

In radio, programmers and managers would do well to truly understand and provide a better customer experience (CX) to their “Core 20.”

But where do you find them?  Simple.  Vast numbers of them are in your database.  And while some listeners who gave you their email address did so primarily to win concert tickets and other prizes, most others are “Super P1s” to your station - the "Core 20."  Using targeted web surveys that filter out these VIP listeners is something our company is actively doing for clients.  If you ask the right questions, you can isolate these key listeners, determine their needs, and simply give them what they want.

Like in the case of Starbucks, it often has little to do with freebies, and much more to do with access, communication, special treatment, service, and the ability to participate in discussions about your station brand.

The next time you’re in one of those strategy sessions, and the conversation turns to ways to convert cumers into P1s, think instead about ways in which you can do a better job taking care of the listeners who are already behind you, listening no matter what, and always willing to help you with your marketing.

Your “Core 20” is the secret to continued success.

Comments

[Jennifer Williams]

It was so great to see your 80/20 blog in my mailbox this morning.

I can remember when we first started the Workforce database over 13 years ago then moving to dedicate time to creating the Listener Advisory Board subset within the database.

We wrote personalized letters thanking the listeners for choosing WCSX and being a Workforce member and included special Workforce Pens and custom Listener Advisory Board Member lapel pins to wear with pride. Our team mail merged thousands of letters. We would bring stacks of the letters into the studios for the air talent to personally sign so the promo team could package and send out these gifts of thanks to the listeners.

Of course as technology advanced we were able to be more targeted with our messaging to the listener’s specific areas of interest. This 20% is the database that became the extension of our Promotion & Marketing team. We worked hard to include this wonderful listeners on the team. And without us asking, they were singing our song to family, friends and co-workers even when we weren't there to provide the music.

I've been honored to have a chance to meet hundreds of these listeners over the years and see firsthand the impact a high quality CX can have on listeners. These experiences remind me of a quote from Alan Loy McGinnis, "When someone comes along who genuinely thanks us, we will follow that person a very long way."

Thanks for reminding us all the importance of the Customer Experience.

[Fred]

Thank YOU, Jen. Much of how I've cobbled together my personal philosophy on 80/20 is by watching some of your great moves at CSX. The Classic Rock audience in Detroit are poster kids for how to work the "Core 20." Thanks for taking the time to comment & add to the conversation.

[Tripp Eldredge]

Great summary Fred. Can't be said enough. If one truly studies the analytics of sustained success, the first place you'll put your resources is on the core. Loved the infographic too.

Jennifer, what a great example of living that philosphy. You can see the secret behind your success.

By the way, Fred did a great write up of the session that we were happy to repost

http://endresult.wordpress.com/2009/12/21/starbucks-focuses-on-those-that-matter-most/

[Fred]

Tripp, thanks for reinforcing core focus. It is a given in most businesses and industries, but still a topic of debate in the world of radio. Your DMR perspective brings credibility to that point. Thanks for taking the time to participate.

[Mike Anthony]

Fred -

Strategic planning meetings forever have been creating strategies to focus on the 20% heavy users and in most cases it was to own at-work listening and win the ratings game. I have directed more than my fair share of them. But there is a new 20% that needs broadcaster's attention. Actives!

In the Internet world the key is "the active user"...the ones who react to your product or service offer and spend. The big Internet sites have huge user bases but they are most concerned with the very active users inside that database. They spend their time and resources studying their behavior and actions. They assign values to these customers. It's different than core vs. cume. In this case a much higher value and attention is placed on actives than passives. The more they learn about actives, the more they can focus on content that causes commerce.

In the Internet business world the question is - what is relevant that can I share with the target user right now that is local, timely and actionable? For broadcasters the challenge is to find out who these active listeners are and obsess over them. Local, timely and actionable...not a bad guide for evaluating all content on the radio.

So broadcasters should consider that there might be a new 20% to serve. What % of your listener base is active? What are you doing for them personally right now?

[Fred]

Great call, Mike. Our Techsurvey7 addressed this "New 20" as you call it - those who want relationships with stations, are active in social media, and love to share. You are correct that these consumers can tip the scale in the right direction. Thanks for taking the time to offer a great viewpoint.

[outdoor playground equipment]

These experiences remind me of a quote from Alan Loy McGinnis, "When someone comes along who genuinely thanks us, we will follow that person a very long way... Thanks for taking the time to participate.