Part 2 of a 2-part series
This article builds on the previously-posted piece Five Consumer Segments Every Brand Should Understand.
Somehow the notion that five consumer segments can cross channels and categories seems too simple. That may be partly because many people have been led to believe that understanding target audiences is hard and better left to the experts. It can be complicated. I don’t think it should be.
I believe brands can make significant progress on company goals without overthinking or overspending on the concept of consumer segmentation.
As a reminder, the five segments I discussed in the past piece are: Value; Practical; Performance; Prestige and; Experiential. To make the most of these primal behaviors, we need to consider the language and activities as related to specific filters. I’ll only use a few here for example, but you can apply as many as necessary to help gain alignment on your brand.
Filters Add Depth To The Five Segments
Generation—A common misperception is that segmentation must be age-related, as in you must separate the Boomers, Gen-Y, Millennials and Gen-Z into individual pillars. You don’t. Why? Because there are a wide range of types of people in each group. That’s why I start with Primal Behaviors: they hold true regardless of age.
A Value consumer who is a Boomer will look for a good deal, but may use some more traditional means to get the information such as coupons, direct mail or word of mouth whereas a Millennial may be more likely to download an app and crowd source a deal from some niche Web site. The difference is HOW they look for a deal, not the fact that they look for a deal. Gen-X Practicals want products that work, but may use older brands as reference than their Gen-Z counterparts.
Income—Some marketers believe income determines how people make decisions. It can. But as behavioral economist Dan Ariely covers in his excellent book Predictably Irrational, most of us don’t make rational, cost/benefit analyses when we make purchases. Income is only a marker of how much money someone MIGHT have at their disposal to make a purchase. We all know people who have made great sacrifices, rationally or irresponsibly, to purchase things they want.
Category—Auto/Sports/Outdoor/Dining/ Beauty/ Family/Baby, etc. A key point to understand is that in categories that matter to them, people will make irrational purchases and spend whatever they need to accomplish their goal. If you’re in a different primal group than the one making the choice, their decisions may make absolutely no sense to you. The Value group has a really hard time comprehending why someone would pay full price for any item. But this doesn’t matter all that much to the other four groups—especially when it comes to passion areas. This can get confusing for some people.
One Guitar. Many Buyers.
Taylor Guitars manufactures guitars that cost from a few hundred dollars to upwards of $10,000 each. Now consider a 600-series model that costs roughly $4,200. At that price, you have to be pretty serious about buying a guitar. A guitarist who leans towards Value will look to get the guitar at a deep discount, maybe buy it used, or even barter for the deal. A Practical might evaluate the same guitar for how it is engineered, the woods used, and compare the reliability of the Expression pickup system with others on the market. If these pass the test, the Practical may pay full price without batting an eye. The Performance segment might love the green or blue designs because they would draw attention, plus the guitar’s acoustic abilities onstage would seal the deal. $4,200 might be a lot of money or not much at all. It’s not about whether you or I think any of these people can or should buy a guitar at this price. Each segment would evaluate the cost based on their own criteria. They could all buy the same guitar and fall in love with their choice, but for decidedly different reasons. You just can’t market to each segment using the same language and approach. What excites one segment can completely turn off the others.
Communicate WITH Your Audiences
No one wants to be talked AT, as in generic words meant for anybody. That’s not communication. That’s patronization.
When you try to speak to everyone you communicate with no one!
If your brand wants to focus activities on narrow bands, start with a primal segment or two, say Performance and Prestige for a high end beauty brand, and work from there. What other filters need to be applied to consider your Performance and Prestige consumers’ preferences in the beauty category? Whatever you do, don’t try to water down the message so some random Practical consumer might not be offended by your Prestige message. Please. If you want to add Practicals to your brand plan, talk to them separately.
Choose The Filters That Work For You
I prefer to NOT create additional pillars because pillars without a specific purpose become a dump zone of sorts. Brands that allow dump zones in their architecture or segmentation set themselves up for longer term confusion. At some point that dump zone data is going to have to be sorted. Why not start with an organized plan?
Start with the primal segments and use your filters to help you determine how each segment acts or reacts when considering other factors such as Quality (good, better, best); Involvement (beginner, aspiring, elite); Need state (Sensitive skin or dietary/health issues, family or individual, etc.).
Subdivisions Within Segments
You can subdivide the segment if it’s helpful to bring clarity to your brand and marketing efforts. For example, you might subdivide the Value group into four parts: Down & Out, Fixed Income, Life Events, Students. The difference is situational events that impact behavior change. So instead of becoming new pillars, consider these to be horizontal filters
The Down & Out group have limited purchasing abilities and blame the world for their situation. Unless you’re in the therapy business, this group usually doesn’t warrant a lot of your resources. The other three groups tend to have positive outlooks and are worth the calories it takes to understand them better. Fixed Income might be retirees who don’t have a lot of spending flexibility, but they’re okay with their situation. Life Events might be people who went through job loss or a divorce and have limited resources for a short period. They’re in the Value group now because some unusual circumstance caused them to be there. When they can, they’ll be back to their usual behaviors. The last group, Students, share a lot with the Life Eventers, in that they see their situation in life as temporary. They plan to have more resources in the near future and then they’ll have more options.
When In Doubt, Go Back To The Basics!
I recognize there is a lot of material to consider here. And if you’re not familiar with it the subject matter can become overwhelming. Don’t let it get to you. Start with the five primal behaviors: Value; Practical; Performance; Prestige and; Experiential. When you understand these core segments you might just be surprised by how easy it is communicate with people who fit into those segments. In workshops, I often hear clients say they know friends and family who match each segment. When we break down the similarities, this simple exercise can kick an innovation workshop into a higher gear.
That’s the hope with all of this: that more brands will find a way to target their innovation and communications to specific audiences in ways that change lives and maybe even change the world.
If you have questions or thoughts on this topic, add a comment here or send me an email.