Sample Segmentation Results

This is an example of the type of readout that we provide to our clients. The client in this example is in the business of selling land. They sell at auctions nationwide.

Segment 1: Empty-Nesters Who Love Their Homes. This segment makes up 8.8% of your total customer base. These folks are your oldest segment at 55 years old on average. They have been in their homes for almost 20 years on average (longest LOR). They are highly likely to be African-American (17%) or Hispanic (25%). In addition, this segment is the most highly likely to speak Spanish (17%). There are no children present in the home. Their home values are in the range of $250,000-$300,000, and their Loan-to-Value (LTV) is very low -- only 28%. So, lots of home equity. They are most likely to purchase land in either Miami or New York. They are least likely to purchase land in Las Vegas.

Segment 2: Have Credit and Equity – Will Use it! This segment is the largest customer group at almost 19%. They are younger than Segment 1, at 48 years old. They are consistent with the overall group in terms of core demographics. They tend to have higher home values ($490,000 on average), yet lower monthly payments (only $1,000). So, they have also have lots of home equity (LTV is 29%). They’ve been in their homes for approximately 10 years. Their average open credit balances are high (with 7 open trades and almost $9,000 in revolving debt). However, their credit score is strong. They are less likely to purchase land in Dallas, Seattle or Phoenix.

Segment 3: Single and Loving New York. This is a relatively large segment (15%). These folks are most likely to buy at auctions held in New York City. They are less likely to be married, have children or own their homes. When they do own their homes, they are worth less than the average ($342,000). While they still have a lot of equity in their homes, they have less than the average of the total customer universe (LTV is 42%). This segment has the most derogatory credit – so are struggling from a credit perspective.

Segment 4: Young Families Moving Up. This segment consists of 16% of your customers. They are highly likely to buy at auctions in Seattle and San Diego. They are the youngest group, at 42-years-old on average, and have the highest income of all groups. Forty percent of them earn more than $100,000 annual income. They are less likely to have a fixed loan and more likely to use the equity in their homes (68% LTV). They stay in their homes only 3 years on average and are very credit active – all good credit. They have high monthly mortgage payments, and are very likely to purchase homes worth $450,000 and above.

Segment 5: Left Their Hearts in San Francisco. This segment is small (5%), however, they are mighty. They love to buy at auctions in San Francisco and 23% of them are of Asian ethnicity. They have the highest likelihood of being married (77%), to earn over $100,000 in annual income (71%) and to possess a Bachelor’s degree (52%). They also have the highest home values of any segment (>$1,200,000), and high monthly payments (>$3,500). They also have a lot of equity, with an LTV of only 36%. They use credit extensively and have very good credit.

Segment 6: Multi-Buyers who Love Southern California! At only 3.5%, this is the smallest segment of the group. What sets these folks apart is the amount of transactions and purchases that they make at each auction. On average, they have 5 transactions per auction, and purchase amounts of $226K (the group’s average is only $83K). They are very likely to purchase in Los Angeles, Orange County, and San Diego. They are the least likely to be female (only 14% are female), and highly likely to be of Asian ethnicity (21.4%). Their home values are relatively high ($500,000 on average), and their LTV is in line with the group average at 49%.

Segment 7: Have Cash – Don’t Like to Finance. This is a large segment – 17.8%. They tend not to finance their transactions – they deal in cash, financing less than 1% of their purchase amounts. This is their biggest differentiator. They are average in terms of both real property attributes and demographic elements, however, they are also highly likely to be of Asian ethnicity (20%), and are the least likely to be of Hispanic or African-American ethnicities.

Segment 8: Heavy Financers with Bad Credit. This segment consists of 15% of your customer base. While these folks tend to purchase lower priced properties, they finance a whopping 90% of the amount on average. They are very likely to buy at auctions in Atlanta, Dallas, Phoenix and Miami. They are the least likely to possess a college degree or earn more than $100,000 in annual income. They are highly likely to be Hispanic (26%) and Spanish-speaking (16%) or African-American (14%). They have lower home values ($200,000 on average) and are the most likely to utilize the equity in their homes (LTV is 57%). Credit-wise, they have high balances. Moreover, over 42% of their credit portfolio has been reported as derogatory.

In Summary: These eight, very distinct segments give us the opportunity to create messaging that will most likely resonate with each group, making them much more likely to respond to the offers.

Key Takeaways:

• These consumers are highly likely to be of Asian ethnicity – several segments are highly likely to be Asian.
• There 2 key segments that are highly likely to be both of Hispanic ethnicity and Spanish-speaking.
• Overall, they tend to use company financing, as opposed to utilizing the available equity in their homes. Overall, the customer base has a high percentage of equity in their homes (low LTV’s).

Target age ranges fall between 41and 60 years of age. This company doesn’t attract either very young consumers or those of retirement age and older.