There is a rapidly growing segment of the U.S. population known as “cord cutters.” As its name implies, it refers to people who have terminated landline service with their home phone provider, opting for mobile/cell-only service.
Based on what you read, who you are, or who you spend time with, you might believe that cord cutters make up somewhere near 100% of U.S. households. They don’t, of course, but it’s still a big group, and growing fast. On average, various research firms put the percentage of cord cutters anywhere between 25% and 30%, with the level expected to grow at least a couple percentage points each year.
Garden-variety marketers would opt to look at cord cutters as one homogeneous segment, but you’re a marketing strategist who knows better. Here’s a good illustration.
Nielsen tracks the cord cutting phenomenon down to the zip code level. It has found that Texans have cut more cords, so to speak, than people in other states. If that weren’t enough, recent data also show that the rate of landline termination is growing faster in Texas than anywhere else.
What the hell is going on down there? Explanations so far have centered on the high percentage of young people, Hispanics, and multi-dwelling units among the population of major Texas cities. Each of these would be a valid driver of cord cutting.
Yet you could say the same thing about Los Angeles…or Miami…or about a half-dozen other U.S. metro areas – lots of young people, lots of Hispanic-Americans, lots of apartment buildings. So why is the penetration of cord cutters almost FIFTY PERCENT higher in Texas than in LA, for instance? And, why is the growth rate a full percentage point higher? WHAT THE HELL IS GOING ON DOWN THERE!
The client I am working with on this lives in Texas and can’t explain it. Nielsen has been asked to look at the data three times to make sure there were no errors. As of now, no one has come up with a definitive explanation.
This is why customer segmentation work is so fun and so maddening at the same time. And why it is so critical to marketing. The deeper you go (up to a point of diminishing returns), the more insights you gain and the better your marketing strategy.
Don’t ever cut the cord on segmentation too soon.