137. Why most segmentations fail (and how to fix them)

Jess Gaedeke (00:00)
HI everybody. Welcome to the Dig In podcast. I am so lucky today to be joined by Vera Chan. She is executive director, global corporate strategy and insights at Warner Brothers Discovery. And that is quite a mouthful of a title for a

pretty big powerhouse guest I have here. So Vera, thank you so much for joining today.

Vera Chien (00:18)
Thanks so much for having me.

Jess Gaedeke (00:19)
So I'm gonna start with an impromptu question. You haven't seen this one coming. If you could live in any piece of content, so TV show, movie, whatever, piece of entertainment for a month, what would you choose?

Vera Chien (00:31)
Okay, without a doubt, Lord of the Rings, that Hobbit land, never gone to New Zealand, but I would love to just roll around those green hills, open the little door on the houses. So Lord of the Rings, hands down.

Jess Gaedeke (00:33)
Really?

I love

how fast you had that answer too. that, could tell. Yeah, of course. Well, yeah. It's a fair bias for sure.

Vera Chien (00:49)
And it's one of our movies too. So yeah, very, very biased.

Jess Gaedeke (00:56)
So Vera tell us a little bit about yourself your background in your role today.

Vera Chien (00:59)
Yeah, sure. So I'll start from the beginning. And I really cut my teeth at Mattel Toys. Worked there for about 11, 12 years, just rising through the ranks in the world of kind of research and insights. led research for the flagship brands, which is Barbie and Mattel. So, you know, obviously a lot of fun and a lot of learning, I think, in the process and a lot of understanding.

around audiences, especially youth audiences. From there, I transitioned over to and led audience insights at Xbox, overseeing insights around only the brand all up, but accessories, other kind of Microsoft devices like HoloLens and band. My claim to fame, or at least one of them there was I was the first researcher on the Minecraft game, ⁓

Jess Gaedeke (01:47)
no way.

you serious.

Vera Chien (01:48)
which always excites

little ones or the younger players. So yeah, so again, lot of interesting kind of experiences there, virtue of like tech, as well as entertainment and innovation, of course. From there, came back down to LA I'm now in my current role at Warner Brothers Discovery. And so our team kind of focuses on two general.

buckets. One is around trying to do research and insights and analytics around helping optimize our different businesses today. So that ranges from creating TV shows to streaming services to games, you all that kind of stuff. And then the other half of kind of what our team does is looking into the future and looking at opportunities.

us to invest in, engage in, and play a part of. so making sure that we are anticipating consumers' needs, they're headed, a lot of more future forward kind of work involved in that kind of area. So a little bit of focus on today other focus is on tomorrow.

Jess Gaedeke (02:49)
such a cool way to delineate that responsibility. And I get to tell my kids that I talked to the original researcher on Minecraft today. That's going to be kind of a big deal. So thanks for giving me that feather in my cap. I can't wait to dig into some of experience as well. So we're going to start with, know, our listeners really crave inspiration from other leaders and one of the best ways to inspire is to tell a And you have a really cool headline to this story that I cannot wait to dig into. It's the tale of two

Vera Chien (02:56)
Okay.

Jess Gaedeke (03:16)
Xbox segmentations. And so I can't imagine what's going on here. So take us back to the beginning. What's of this story?

Vera Chien (03:18)
That's right.

the tale of two Xbox segmentations. think when I first, one of my first tasks when I joined Xbox was, here you go, you're going to do a segmentation. you know, everybody knows, one of the main goals of a segmentation is to kind of help identify and quantify and target very different audiences in whatever either category.

or area you're interested in. And so that obviously was the aspiration I think what we tried to do, and this is going to go into the annals of game console history a bit, but at the time, was coming off of...

Xbox 360 which there was starting to be more of a family audience for games. And so the aspiration was to continue that trajectory. And so

in the first go around, the first segmentation was really quite high altitude and very, very broad. In total, just to boil it down, we did sort of a two tiered segmentation. One first starting off dividing audiences into essentially life stage that is what the data was driving us towards. the second tier was within each life stage, let's say,

families with young kids or baby boomers, whatever it might be, we then segmented them further down. So within boomers, we had, I think, four segments. parents kids, we had five, things like that. And so we ultimately landed on something ridiculous, like 30 segments in total, which is, of course, breaking every single segmentation rule known to man.

I think at the end result of then we certainly put not only obviously a lot of time, analytics and resources on it, but also on the backend of trying to socialize it and bring gosh, know, many, segments kind of to life. I would say the end result of that was it ambitious. But what I think hindsight's 2020 and, you know, I think ultimately it was a little too

abstract, a little too high of an altitude for our, on the ground kind of engineers, PMs, developers, and marketers to use on a day-to-day basis. I mean, we called it down as best as we could and simplified it, but I think, again, in hindsight, it was just a little too much.

again, high of an altitude for the day-to-day my stakeholders. Fast forward, I think about like five years later, I'm certainly smarter in tune and have my pulse on my stakeholders, the teams that I'm working with by virtue of just having been there for a little bit longer than the beginning.

And so really try to apply all of those learnings and kind of post-mortem insights to the second go around. I would say one of the key things in this second segmentation was just a lot more partnership and with the stakeholder teams from the get-go and making sure that

we were working sort of cross-functionally across the segmentation workstream. That wasn't something I did as much in the first go-around that I thought would be much better kind of just more non-researchy practical kind of, motion kind of going forward.

So that was something that we definitely did. I think another one was to get thinking that the last one was a little too abstract to high altitude, making sure that we calibrate the altitude of what we were segmenting, the types of audiences and an approach to the segmentation being a little bit more narrower, a little bit more pragmatic and concrete, focused on the kinds areas, ways of asking.

that is going to be most useful to my project managers, my engineers, my developers, all those kind of things. And making sure at the end of the day, the information was going to be as useful on sort of a day-to-day for them. So, making sure the segments and the data behind each of those segments was going to be relevant for the Halo Studio versus the engineers on the Xbox console.

versus team on and making sure that, again, we all try to kind of universal framework of understanding and talking about audiences. So more kind of collaboration, more cross-functional partnership, being sort of less siloed. And while the output,

we, didn't spend as much resources into, the, the flashy side of socializing. think it it just, it was very practical and usable day one. So I think, a nice, kind of conclusion, and kind of making up for the first one. So really, really proud to have kind of landed the second one, I think a little bit more successfully.

Jess Gaedeke (08:11)
Well, you shared so much that I'd love to kind of dig into a little bit mentioned, know, the segmentation, the first one, it sounds like maybe not as useful because the folks on the ground that arguably are the ones that really need to use that learning, you know, maybe there was a disconnect are some of ways that you see those on the ground stakeholders? What are some of the ways that you can best develop that empathy for those segments with those people on the front

Vera Chien (08:36)
Yeah, and I think this is where the collaboration, the cross-functional kind of aspect of it really helped because as we were working through the questionnaire, for example, you know, making sure that the way we ask questions or what we were tapping into sort of the need, the way we were talking about needs, the way we were talking about gaming, gamer motivations, the way we were talking about, you know, how they like to play, whether they like to play solo or, you know, with online, with friends, with team.

all that kind of language and vernacular was baked in. And I think that ultimately really make it accessible and use almost from the get-go the same language that our engineers were using, that the game developers were using. And so it was easy then as we were reporting out the data for segment A versus B versus C, already built in is that language that they were already using internally

develop a new feature or develop a new kind of part of the game. So I think all those things, really, really helped.

Jess Gaedeke (09:36)
Yeah, that makes a lot of sense. you at the the success of the rollout of a segmentation? Like what are some of the milestones? And you're like, okay, we nailed this one.

Vera Chien (09:45)
Yeah, they did. So my informint is, hey, how many people do I keep playing back the names of these segments? And so the first time around, I didn't hear as much. They kind of reverted back to like, hardcore gamer or casual gamer, which was not literally not the names of our segments. There were much more nuance than that. But I was happy to hear and kind of sense like from the second go around,

a lot more playback of the names, a lot more not just the names themselves, but understanding of at paragraph or the persona, of the main kind of segments. all in all,

I would say I think the segmentation, this may not sound like amazing your audience, I think we reached about half of the Xbox organization, which mind you, it was like 10,000 people at the time. So I would say for me, that was a victory compared to the first go around. So I will take of the Xbox organization having some kind of understanding of that the segmentation exists.

they know target audiences are and at least a little bit of something about it. So I'm a little sure-sighted, but I thought that was, for me, that was a victory given like so many competing, you know, things going on within so I was pretty kind of the team's work on that.

Jess Gaedeke (11:04)
Yeah, I think you should be proud about that. Absolutely.

if you can have 50 % of the people that are really using it, you consider that a victory. I absolutely agree. Did you have a build to that?

Vera Chien (11:13)
Yeah.

yeah. And I think ultimately, we were all, it was coming also at a pretty kind of critical time as we were starting to think about the next generation of consoles, so a lot of the insights in that segmentation framework helped inform the development of the console that is currently out today, Xbox Series S and X. So again, like being really, able to inform product development and the

whole new generation of consoles and its ecosystem. Obviously, it was really critical in being able to reach at least half of the organization. It could have been more, I don't know. But yeah, that was really I was really thrilled with. obviously, I didn't do it single-handedly. We had a cross-functional team. My marketing partners at the time were such an incredible.

you know, partner helping to socialize market externally, but also internally our segmentation. And so I have to also kind of give them a shout out, even though this was like so many years ago, help and support in helping socialize the second go around of the segmentation.

Jess Gaedeke (12:17)
that is a really important point and leads me to sort of the second part of our conversation because you have a really passionate point of view around that in itself, right? How researchers are really shepherds of way past that initial report. So talk to me about maybe first the challenge. If you don't do that job well, what happens to insights? And then maybe some of the things that you do uniquely to make sure that, you know, insights don't die on a virtual shelf.

Vera Chien (12:43)
Yeah, no, such a great topic. since I come from the world of toys, I'm going to borrow one of the catchphrases from the 80s GI Joe, which is knowing is half the battle. Probably half of your audience will never have heard that before. That's okay. But I interpret it to me, you know, in this research exactly what you said.

Jess Gaedeke (12:53)
you

Vera Chien (13:04)
in my career, I really thought like, okay, Vera, put all your efforts into the most like cutting edge methodology approach. all the tech, whatever it might be. And then once you're done, cool, you're done. as you've kind of teed up, that is really only half the battle. Really the other half the insights shepherding that.

the businesses and the stakeholders that kind of need that information the most, where you think will have the impact on the product or the business or the marketing in the strategy. And so I think the way I think about it is, after the research is done, and you should be thinking about these things even while the research is being developed, even at the get-go, thinking is the narrative going to be at the...

at the very your resulting data and insights, and how actionable are they? And I would say that is level one. Making sure you have a strong narrative, making sure you have actionable insights, I think that's of table stakes at this point. And then the after that, that I think...

can be strengthened, I think in many cases is your recommendations and implications. I personally am the kind of person that's gonna like reach always for being on the more prescriptive side, if not, just to help kind of explain the insight and explain the recommendation through the usage of an specific tactical example of what the solution could be.

and so we're going from like the what to the so what to that now to the now what, right? and from that, you know, it's a variety of hard skills and soft skills that really now come into play first, you know, are you following up with your stakeholders after your initial kind of debrief? You know, are you

practically stalking them and following up and saying, hey, did they have any questions? Are they, they doing, I mean, in a nice way, of course, you what are they doing with the information? Are they doing anything with it? And if they're not, you know, kind of doing a little bit of self reflection about what and diagnosing amongst, you know, the researcher themselves, why not is that happening?

And then, you know, going the more formal route of then, you know, especially for the more high profile, more strategic kind of bodies of work, thinking about workshops or other interactive ways to really more formalize the kind of brainstorming process or, know, strategic kind of thinking or, helping kind of craft plans coming off of the research.

I think again, a balance of both soft skills, then the more harder skills around socializing and kind of implementation of the research.

Jess Gaedeke (15:51)
Yeah, absolutely. And I think that what's really funny as you're describing this too, you're on my mind. So, Dig we just commissioned our own research study. And as research suppliers, we must be the most difficult client for this agency trying to give us now a project. And I am now really living that. Like, how do we deploy it? What decisions do we enact? And I'm struck by

man, if we could have refined the brief a little bit more to be more forward thinking of how are we actually going to roll this out, it would have made the total engagement, including how we captured the data, what we asked, how we analyzed it better. Have you had some of those moments where you're like, can I please go back in time and rewrite this brief?

Vera Chien (16:26)
Yeah, on.

for sure. think we all have it. But I love the idea that you've come to that kind that aha. And personally, I would love if more partners like you guys come to the table with, yes, we asked you to do the XYZ research, would love to kind of as a sense of the thinking and the insight and the creativity help us think through like, how could we extend the life of this?

you what are some of the vehicles and though that doesn't have to be done in the same fell swoop, that could be a phase two, phase three, what have you. Actually, I know that the last brief, guys can send over to this a bit ago kind of had that too. So I love the idea. it's great to help the researchers even too, like when we're so focused on answering this very specific business question, we kind of forget about the importance of

you know, having that shelf life having the insights again, especially you don't do this for every single project, of course, and every single kind of research question, but there are so many that do can live on beyond once the research is done and, know, us thinking proactively together about how we can extend the life of it and making sure that then action is then taken because again, everybody, don't know about you guys and your stakeholders and the teams you work with, but

folks here are really, really busy and they don't have time to meditate and think about, Vera's research, hmm, this was great. The insight was great. Let me think about like a plan to how to implement this. In most cases, I'd say my students are happy to have like a very recommendation about.

how to, what the best way to market this new kind of pricing structure? What is the best way to launch the specific product? All these kinds of things.

Jess Gaedeke (18:17)
Yeah.

Absolutely, and I think that's where a lot of the LLMs can help us as well. Pick up research that was done a year or more ago and say what should we be thinking about now? What are some of the things we can influence now? And it's not that dissimilar to how you talked about Xbox. The segmentation ended up really informing future category development and the future of consoles. I if we can go back to some of those research, I just feel really passionate about we want clients to get the most value out of the research engagements.

so many things that have longer legs and maybe we might give it from the start. So I'm excited to see how technology can help us continue to do that and extract every bit of long-term value out of the research engagement. Do you think that's a valuable pursuit?

Vera Chien (19:00)
Yeah, yeah, totally. mean, you know, unfortunately, there's just becoming more in terms of teams and compositions and reorgs across all categories. And so I think because, you know, as people come and go, and especially people leave that have been working on a certain category or brand for a long time, they take that, that amazing tribal knowledge with them. And

think this is where AI can enlarge, like which models, as you said, could really step in and assist employee bases get more dynamic, nobody stays at their job now for 20 years or even 10 anymore. so people are doing three year, four year stints, either by choice or unfortunately by virtue of organizational change. And so a lot of that knowledge is then

So yeah, having LLMs that can absorb the corpus of a team's work over the past 10 years and kind of, harness it, I think is incredible.

Jess Gaedeke (19:58)
Yeah. what a way to start your career at Mattel. How many years were you there?

Vera Chien (20:02)
11, I think. Yeah.

Jess Gaedeke (20:04)
that's so cool. And

I'm sure you're grateful for that experience. And wow, to work on such an iconic brand. Now, when the movie came out, how are you feeling about like, were you worried about seeing it? Were you like, I don't know if I'm gonna, did you have feelings?

Vera Chien (20:15)
so they, it was full circle for sure. Same thing with Minecraft movie. I'm like, wait, how, did I relate to all these things? Like all these things are coming back in, into my life in a wonderful way. yeah, for both of those movies with Barbie and Minecraft, you know, a first initial like nervousness because,

for video games, have not had a great history of translation from game IP to the big screen. And then toys even less of path of success, I'd say, it's just more unknown.

I think the closest thing was when I worked on Barbie at the time, every year we'd have this wonderful, amazing direct to DVD, know, animated movie. That was probably the extent of it, but never a full length feature. But once I saw the trailers for both, was like, sold. was like this and Margot Robbie for Barbie. She's just, his name for Ken? Like both of them were just kind of amazing actors that really embraced,

Jess Gaedeke (21:11)
like.

Vera Chien (21:14)
roles. think both absolutely loved and cried at both.

Jess Gaedeke (21:18)
Oh my gosh, that's so funny. And it's a good point about not all game IP translating well. We won't name some, but there have been some real misses here in the recent years. So we'll wrap up this section with, I would love to hear your hot take on the future of the entertainment industry.

Vera Chien (21:33)
delicate about this. Obviously, no secret there's been ton of change across mergers, acquisitions, and everything across the board. I'll stick to something

category kind of specific. And I think I've been thinking about this a lot streaming like on Netflix and HBO Max and Disney Plus, now nearing I think 20 years old when Netflix went transition from kind of DVDs to streaming. YouTube also just passed 20 years like strangely I think last year and so

The reason why I bring those two up and what I've been thinking about lately a lot is like, what is the new, the next horizon? What is the next new disruption, the next new cycle? Because these things move in like 20, generally speaking, 20, 30 year cycles, if you're lucky, if you're lucky. And so

Netflix and HBO Max, et cetera, that's been around now for 20 years and it's now becoming quite mature. And so there are things that go along with that maturity. our team's role is to look ahead into the future. My thinking right now is at least, what's that next horizon?

that is streaming will still be around for many, years. I'm not saying there's gonna be the decline of streaming in any stretch of imagination. In the same way there's not, people are still watching network and broadcast right?

happened historically, streaming came on and that started seeing kind of a certain trajectory to where we are today. I think we may be entering the period where this next wave might be coming. Do I know what that is exactly? No, I don't. But that is something obviously think about and we as part of our role here try to keep our ear on the ground and try to be at the forefront

front of identifying what that next wave could be might be emerging that could eventually be as all encompassing as streaming. So we don't know what that is exactly yet, but certainly part of our team's role is to kind of keep our ear on the ground look at the signs of what might be emerging.

Jess Gaedeke (23:32)
M.R.U. there.

Jess Gaedeke (23:38)
Okay. Well, we're going to move to the final dig. This is all about you as a person out there in the wild. So feel free to take off your corporate hat for a moment. What is the last product or service you bought on impulse?

Vera Chien (23:38)
yeah. No worries.

Okay, this is super boring. This is because I broke my elbow recently, but I got served up on Instagram maybe because I was searching it, silicone tape to reduce scarring. I didn't know it was a thing. So came from an influencer person that I follow and yeah, she introduced me to this world of silicone tape. So that's what I bought.

Jess Gaedeke (23:57)
No. Okay.

All right,

well it's an unfortunate way that you entered that category, but good that you found a good solve. Speaking of categories, is there a category or a brand that you could rationalize any price point for? You just have to have it in your life.

Vera Chien (24:14)
Yes, yes.

Unfortunately, these have gotten only more more expensive over the years, but tickets to a concert, a festival, show, those are things that I could almost justify any price. Unfortunately, they are hitting those crazy highs.

Jess Gaedeke (24:38)
an artist that you are sort of like, I splurged and I went to?

Vera Chien (24:43)
many of them are like festivals, but I just bought Bottle Rock tickets. They're in Northern California. I think they're gonna be in like May. So looking forward to that. And then now thinking about a few other concerts later in the year. yeah, they're getting quite you know, worth it in my mind.

Jess Gaedeke (24:58)
Yeah,

we hear our guests say that, that they'll pay a lot for experiences because you take that with you. So I'm here for it. I support it. So we know that brands have distinct personalities. What's a brand that you would date and a brand that you would marry? And they don't have to be the same brand.

Vera Chien (25:06)
Yeah.

Okay, this is a fun one. Okay, well, how about move categories into fashion? Something I'm kind of into and then at least know quite a few brands around. So maybe date would be maybe a brand like Zara. So you know, a lot more a little more fast fashion. So we're gonna date, we're gonna date Zara. And then in terms of Mary and keep around forever.

maybe a brand like Prada or something, something like that, that you can keep around for a long time, very good quality, things like that.

Jess Gaedeke (25:44)
Yeah, I think that's a long standing one that makes a ton of sense. Is there an industry leader you think I should interview on this podcast?

an industry leader that you would like to see me interview on this podcast?

Vera Chien (25:55)
Okay, I'll go good friend and researcher. Her name is Sheila Baxter. together when we started my career at Mattel. She is really one of the most creative.

passionate analytical researchers I think I've ever met. And so always have admired her work at Mattel and then where she's gone on after that, she's worked at Kraft, Vans, Magic Leap, the VR glasses and Samsung most recently. So just she's you know, a powerhouse. So really, really admire her.

Jess Gaedeke (26:29)
tremendous lessons from the conversation today, So I'd love to hear from you, what keeps you inspired at work?

Vera Chien (26:36)
two things. One is sure that kind of the research and the work we do always has impact kind of on our stakeholders and our business, you being able to kind of inform business decisions and strategies or at least inspire them to the degree we can. So definitely having impact. And then the second one, I love learning. And so learning from

other folks on my team, from other partners, you guys, anywhere, everywhere. I think that's another thing that keeps me inspired and hopefully keeps flowing.

Jess Gaedeke (27:10)
Yeah, keep the gears turning. Well, that's phenomenal. And those brains have been on display here today. Thank you so much for joining us. I really appreciate you taking the time.

Vera Chien (27:18)
Yeah, thanks so much for having me.

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