In 2002, when Brad Anderson succeeded founder Richard Schulze as the CEO of Best Buy, he faced a huge challenge. Investors continued to expect growth of 20% per year, but Best Buy had completely saturated the North American market. The next wave of growth would require significant changes and a singular focus.
After an exhaustive search, going to conferences in a myriad of industries and tapping the brightest minds he could find, Anderson discovered a new component he considered critical to continued growth. Larry Selden of Columbia’s Business School (“Angel Customers and Demon Customers”) argued that many companies undermine their profitability by pursuing sales too blindly, failing to consider which customers are most profitable and which actually cost money to serve.
Anderson realized that no matter what other growth strategies Best Buy pursued, it was going to need to focus on attracting and retaining its most profitable customers, and finding ways to transform less profitable and unprofitable customers into more profitable ones. But how?
He began a campaign to convince his team of the importance of what Best Buy now calls “Customer Centricity.”
To create Customer Centricity, Best Buy developed four personas to represent key customer segments for marketing, communication and training across North America:
- Barry (the wealthy professional man)
- Jill (the now-updated soccer mom)
- Ray (the family man)
- Buzz (the young tech enthusiast)
For two years, Best Buy invested in developing these personas and perfecting its roll-out even down to emphasizing a primary persona per store: over 60% of stores are designed to attract and service Barry or Jill. By 2005, sales in over 100 test stores were more than eight percent higher than those in regular stores.
What is a persona, and why should I care?
A persona is a research-based character that represents a group of customers or potential customers having similar goals and motivations. Personas help everyone on the team to understand and relate to your key customers on a personal level, whether front-line salespeople or IT departments and senior executives who may rarely talk with a real live customer.
Personas are formatted in many ways, but are typically one to two pages of engaging narrative, a name and a photo, and perhaps some minimal demographic data, all working to bring the persona’s motivations and goals to life.
Personas don’t represent target markets in the typical data-citing, quantitative, demographic sense. Instead, personas unite your target markets by what they want to accomplish and why. For example, Wesleyan University realized its one-fourth non-traditional students were united not by the field they wanted to study, but by the differing motivations and goals of pursuing an advanced degree at 20, 40, 60, or 80 years of age. One of Wesleyan’s personas now is “Bill,” a mid-level manager required to get an advanced degree.
In the Washington Post’s feature story on Best Buy, In Retail, Profiling for Profit, we learn about the “Jill” persona. “Jill” is: “a soccer-mom type who is the main shopper for the family but usually avoids electronics stores. She is well-educated and usually very confident, but she is intimidated by the products and the store clerks who spout words like gigabytes and megapixels. According to the data Best Buy has collected, “Jill” shops a few times a year — usually twice — at an electronics store, but she usually spends a significant amount.”
How is a persona used? From “Thin Is In” to Granny Power
Personas focus your marketing by bringing your customers to life in a real-world setting. They can unite your entire organization by providing an easily-digestible way for everyone to quickly and intuitively understand far more about your customers, their decisions and behavior, and how to delight them.
- Re-targeting markets. The research required in creating personas reveals customer motivations in ways demographic research can’t imitate. The one-on-one interaction offers rich and nuanced data; the patterns across interviews reveal the opportunities for greatest impact.
“Thin Is In”
Slim-Fast used personas to re-target its marketing to three personas: one needs to get “back to slim” for an upcoming event or vacation, one needs to lose weight gained over a few years, and the last needs to lose weight for health or medical reasons. When Slim-Fast used these personas for an email marketing campaign, email open and offer response rates were twice those achieved in any previous campaigns.
- Prioritizing projects. Staples defined personas for their Web site. When they matched site visitors to specific personas, they discovered that two of their personas counted for just over a third of the site’s visitors, but over half of sales and profit. Now they prioritize the projects that will keep these customers happy.
- Improving customer experiences. Developing personas can reveal opportunities to dramatically increase purchases and customer satisfaction. For example, Universal Studios Orlando used personas to refocus its web site and saw online ticket purchases climb 80% the next year.
Reviewing their database, Best Buy realized the female Baby Boomer market was a significant opportunity for additional revenue. It’s persona research, however, showed that they were trying to reach that market on grossly erroneous assumptions. The “granny market” was not the tech-ignorant, reluctant customer they had imagined. She was tech-aware, time-pressed, and wanted to shop for technology in the same way that fashion is often sold, with related accessories in one place rather than strewn across the store.
- Shortening and focusing debates. Chrysler and Whirlpool use personas to help everyone understand what needs to be accomplished for customers, eliminating most product development and service disagreements and helping everyone intuitively understand exactly who they’re selling to and serving. Many companies find personas so beneficial that the first page of project briefs feature the persona being served. Some companies, such as Chrysler, even hold meetings in specially designed persona rooms – outfitted with personal artifacts from furniture and art to energy drinks and MySpace pages – that immerse the team in the life of the customer they’re serving.
- Discovering untapped or underserved markets. E*Trade’s persona research helped them understand that their customers typical behavior patterns weren’t being taken into account by their systems. For example, customers usually want to check stock quotes before making a trade. When E*Trade implemented its redesigned customer experience easily integrating customers’ natural steps, it saw an astonishing 15% jump in trading volume.
Zipping Into New Markets
Zippos used personas to successfully guide the development and launch of its first product extensions in 70 years. Its traditional lighters were popular with the college crowd, but were there other markets they could serve? Using personas they found Louis, the week-end warrior who loves bonfires, camping and roasting marshmallows. He also loves the convenience of using the new Outdoor Utility lighter. Zippo met Mandy too, a Martha Stewart devotee, who uses the new multipurpose lighter around the house for lighting candles and barbeques.
What are the benefits of personas?
As Bruce Temkin of Forrester put it, “Starbucks has taught us that coffee shops don’t have to compete based soley on their coffee.” You matter more than beans as well, and personas can help you understand or intuit a brand-consistent differentiation that will matter more to your customers – and to your bottom line.
- Personas get everyone on the same page. Remember “Jill” from Best Buy? For its story, the Washington Post asked employees at the Santa Rosa, California store about “Jill”. These Best Buy employees didn’t recite a verbatim description. They know “Jill”: who she is, what she likes, and how to take care of her needs. When she walks in, they recognize and serve her accordingly.
- ‘She’s very smart and affluent,’ says Best Buy employee Jenn Metzger.
- ”Jill’ is a decision-maker. She is the CEO of the household,’ asserts Tony Sagastume.
- ”Jill’s children are the most important thing in her life,’ Jenine Bryant adds.
After “Jill’s” introduction, annual sales to “Jills” in the Santa Rosa store rose more than 25%.
- Personas create a more consistently customer-focused experience. Once you read about “Jill”, even from the few sentences here, you know who she is. Will “Jill” want to hear rap or techno music blasting through store speakers? Can “Jill” keep an eye on her children browsing through the games while she looks at a new digital camera for the family?
How are personas developed?
It’s important to develop your personas appropriately. As Harley Manning of Forrester says in Persona Best Practices: Developing Your Customer Research Plan, “A persona that isn’t based on primary user research is like a sociopath: charming, convincing, and dangerously misleading.”
- Base your personas on real research, not the impressions of a group of people within the company. Primary research – interviewing your customers and potential customers, watching them in action, seeing their goals and what triggers them to act – is the only way to generate genuine insight into your customers and opportunities.
- Don’t be limited by your knowledge. Personas expose new markets and new opportunities, but only if they are created with an open mind and updated as your market changes. If you think you already know what you need to know about your customers, it’s unlikely you’ll discover anything new. If you’re open to possibilities, however, it’s likely you’ll discover you’ve overlooked or underserved a broad new market (like a hip Granny or an infrequently shopping “Jill”). Also, just as you and your company change, so do your customers and the culture they live in. The typical purchaser of a big screen TV, laptop, or even bell-bottom jeans has changed dramatically over the last three years.
- Match the persona to the task. Gather the right data to understand your customers’ and potential customers’ motivations and goals for the activity you’re trying to create or improve. Just as your reaction to a fire in your fireplace is unlikely to predict your reaction to a fire in your house, extending your persona to an untested area may render it ineffective or misleading.
- Make your personas real. Add details, but meaningful ones that make it easy for the reader to capture the persona in his head. As Kim Goodwin says in the Cooper Journal of Design, “…add life to the persona by using environmental details to reinforce important characteristics. For example, if someone tends to be incredibly busy at work, don’t just say he’s incredibly busy; instead, say there’s a sandwich on his desk that he’s been trying to find time to eat for three hours.”
- Integrate your personas into processes. Once you’ve defined your personas like real people, with a captivating narrative and a photo that makes them real, introduce them and let them work their magic. Jackie Yeaney of Homebanc says, “It helps everyone outside your core marketing people figure out what you’re trying to do, because our personas help them relate to the actual people they’re serving. Other executives have even started using the names of our personas when they talk about improving the customer-service experience.”
When people start talking about what “Jill” wants, and what “Jill” can understand, you’re not only well on your way to knowing who you love – you’re on your way to delighting her with the revelation.
Who do you love? Your personas? Yeah, we thought so.