Environics Analytics Launches Two Segmentation Systems For Postal Code-Level Marketing To Canadian Consumers

Environics Analytics (EA), the marketing and analytical services company, today announced the release of two new postal code-level segmentation systems designed to help marketers better understand their Canadian consumers. PRIZMΔ ("PRIZM Delta") is developed at the postal code level using the 66 segments of EA’s popular PRIZM C2 system—with names like Cosmopolitan Elite, Young Digerati and Newcomers Rising. DELTA is a new and distinct segmentation system for Canada that defines 121 segments at the postal code level based on key dimensions such as age, income, education, marital status and dwelling type. Both systems provide deep insights and greater discriminating power to help businesses and not-for-profits more effectively find new customers and expand their reach.

The two systems arrive at a time when marketers face an increasingly mobile society and the arrival of new online, mobile and digital advertising channels to reach them. With organizations striving to find high-value customers with the best segmentation tools, EA’s two new systems provide clients with more choices when determining the right level of geography to use to differentiate customers for profiling and modeling applications. While PRIZM C2 was developed with 2,000 key demographic and geographic variables for the 54,626 census Dissemination Areas—averaging 400 to 700 households nationwide—PRIZMΔ and DELTA were built with fewer available variables at the postal FSA LDU (Forward Sortation Area – Local Delivery Unit) level, with 834,104 postal codes averaging just 17 households nationwide. And DELTA classifies all postal codes into 121 types—nearly double the number of clusters of the industry-leading PRIZM C2 system—to provide finer analysis of the lifestyles and values of Canadians.

"The choice of which segmentation system to use depends on the application," says Jan Kestle, president of Environics Analytics. "There are many applications where customers will achieve the best results at the execution level using PRIZM C2. But for some campaigns, the new systems may provide enhanced differentiating power that can make the difference in finding and keeping your best customers. The important news is that, with PRIZMΔ and DELTA, our clients now have even more options when deciding which segmentation system will be most effective for connecting with new customers, prospects and markets."

In a test of PRIZM C2, PRIZMΔ and DELTA, EA analysts demonstrated their relative strengths for reaching potential customers for a fitness club, an upscale retailer and an online shopping site. While PRIZM C2 provided the best solution for promoting a fitness club in a local neighbourhood, PRIZMΔ was a better choice for the upscale retailer, and DELTA proved more effective for marketing an online shopping site.

"We remain strong supporters of the DA-level segmentation of PRIZM C2 assigned to postal codes for many projects," explains Kestle. "But for some modeling and marketing applications, PRIZMΔ or DELTA will make more sense because their development at a smaller level of geography results in a greater level of differentiation."

The new DELTA systems—the name refers to the Greek symbol denoting change—were developed by a modeling team led by Danny Heuman, EA’s Vice President of Custom Research. The team included Kestle, Chief Methodologist Dr. Tony Lea and Senior Research Associate Peter Miron. R. Bruce Carroll, a founder of Claritas and the developer of Acxiom’s Personicx segmentation system, provided special analytical advice. The group built both segmentation systems by incorporating postal code-level data on Canadian lifestyles, marketplace behaviour, ethnicity and values, including new ethnicity data from EA’s OriginsCanada product. EA analysts also used sophisticated modeling approaches and algorithms to build and test multiple solutions before determining the segmentation systems that offered the best "lift" across the broadest spectrum of products and services. Although early segmentation systems reflected the notion that everyone in a neighbourhood shared similar lifestyles, the DELTA system offers finer granularity, allowing companies to target, for example, any one of a dozen different segments of middle-aged couples found on just one side of a single block.

"While both systems required months to develop, they’re actually the end products of years of thought about how to model data reliably at the postal code level," says Heuman. "The result is an accurate portrayal of neighbourhood-level dynamics capturing family and household differences between adjacent postal codes and those across the street."

As with PRIZM C2, PRIZMΔ and DELTA allow organizations in a range of sectors—financial, retail, media, telecommunications, travel, government and not-for-profit—to carry out a variety of marketing activities:

• Identifying the most profitable customers and prospects 
• Creating more robust consumer segment profiles 
• Locating areas of high-value customers, underserved markets and untapped opportunities 
• Determining the best media mix and messages to reach a target audience 
• Delivering digital advertising in real time to PRIZM C2, PRIZMΔ or DELTA segments and target groups 
• Improving one-to-one targeting with relevant messaging 
• Importing variables in predictive models to differentiate behaviours 

By selecting the most appropriate EA segmentation system, marketers will have the data and consumer insights needed to reach their target audiences with the right message, through the right medium, at the right time. "Ultimately, consumers benefit," says Kestle, "because with PRIZM C2, PRIZMΔ and DELTA, they will receive information tailored specifically to their needs and their lifestyles."