A Customer Segmentation Story Told Through Ice Cream

By ​Bruce Ernst

September 2, 2014

Ice Cream FlavorsMy local ice cream shop is part of a family-run dairy farm.

They started their business in the early 70s, milking cows, processing the milk and packaging it right on their farm. They complimented that core offering with ice cream. Then, they complimented the ice cream offering with ice cream cakes.

And business took off.

By the late 80s, Freddy Hill Farms in Lansdale, Pa., about 20 miles outside of Philadelphia, had to open a sit-down ice cream parlor to meet the demands of their growing customer base. Suffice it to say, business—and life—was a little different for the Seipt family than it was when they opened.

But what was the secret? How did a father, mother and their three sons turn a dairy farm into something a lot more than that?

They paid attention to their various customer segments and tested new things with them. Not a new concept by any means, but one that happens to work really, really well.

Customer segmentation lets you look at your customers at a more granular level, meaning you can learn a lot more about whether something you try is actually working.

In the world of ice cream, Freddy Hill Farms isn’t even the best example. It just the one that hits closest to home. No, the best example is Baskin Robbins.

In 1953, two brothers-in-law combined their ice cream parlor operations under the identity of Baskin-Robbins 31 Ice Cream. They were both driven by the idea that there could be a whole bunch of different ice cream flavors, made approachable by free samples and a family-friendly environment.

In fact, Irv Robbins, one of the Baskin-Robbins founders, summed it up pretty well.

"Not everyone likes all our flavors, but each flavor is someone's favorite."

The only way to get there, though, is to test new flavors and pay attention to who likes it and who doesn’t. If you don’t, you’re basically running an A/B test, where you promote a winner to 100% of your customers.

Which means everyone is stuck with Chocolate or Vanilla, and no one can even know that they have a favorite flavor, much less buy and enjoy it.

To me, that’s kind of a bummer.

See, the most popular flavor in Pennsylvania, my home state, is Vanilla (a fact you can confirm with Baskin-Robbins and with Bassets, a local ice cream producer from Philadelphia). And that doesn’t work for me. Nothing against Vanilla, but I think it’s a little boring. So when I go to Freddy Hill Farms, I get Chocolate Chip, a flavor that would have never been created if we stopped testing ice cream flavors with Vanilla and Chocolate.

Ice cream photo courtesy of Shutterstock.

Bruce Ernst is the former vice president of product management at Monetate. He has more than 20 years of experience in applying strategic plans to immediate execution as well as communicating complex technology solutions in a simple and straightforward manner. Prior to joining Monetate, Bruce was head of Webstore Product Management at GSI Commerce (now part of eBay), a Monetate customer.

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