You can see it all around you, maybe even in the mirror. Today a lot of consumers defy categorization, sometimes deliberately.
They yearn to be liberated from cubicles, labels, “market segments,” and especially those confining cages that restrict them from expressing the unique self they have constructed out of all the lifestyle “raw materials” that marketers of many stripes have to offer.
Their lives are a work in progress, and always in beta.
We didn’t appreciate it then. But in “the good old days” (say, a few decades ago), marketers had it pretty easy. Customers respected authority figures, and we had a pretty good idea of where to locate these people and how to enlist them to sell for us.
There were just a handful of TV stations, some popular radio stations, and large circulation print magazines that almost everyone read to learn about the world – and about what to buy.
That environment made it pretty easy for us to classify customers into large, fairly homogenous market segments. The logic was inescapable: You can’t be all things to all people, so choose the target(s) that aligns with your distinctive competencies.
Don’t try to convince men and women, young and old, rich and poor, etc. about your value proposition. Select the segment that makes the most sense for you and realize economies of scale by messaging everyone in that segment uniformly.
However, that convenient landscape no longer works today. Indeed, it began to disintegrate way back in the 1950s, as consumer groups began to splinter into smaller and smaller niches.
Mass-circulation periodicals faded into history, to be replaced by a multiplicity of specialized magazines. Editors discovered that they could better compete by helping advertisers to reach more finely defined audiences with specific needs and tastes.
Still, we persist in thinking about consumer segments as if all the members are the same. This strong tendency also is a prime example of what psychologists call a nominal fallacy; the belief that because we have given a name to something, we have therefore explained it.
So, we blissfully describe our target markets with peppy terms like Millennials, Empty Nesters, Henrys (High Earners, Not Rich Yet), Recreational Shoppers, etc.
Then we give ourselves a high-five, secure in the knowledge that we now understand what makes these folks tick. We have safely placed them into their cages and affixed cute labels on the doors.
Guess what? The party’s over, folks. For years, we’ve been able to get away with putting our customers into neat little cages, as we grouped them according to fairly broad ranges of age or income, or we pigeonholed them by gender.
But today it often makes more sense to literally think in terms of “markets-of-one,” where we try to deliver a customized message and perhaps even product to each individual buyer.
Behavioural segmentation methodologies do just that when a buyer is served up a message based upon his or her prior search pattern.
Sophisticated CRM (Customer Relationship Management) systems allow us to track our interactions with each individual in our database and also serve up unique messages – like when your car salesman emails you with best wishes on your birthday.
Traditionalists, don’t despair! Creative destruction is a good thing. We need to open these cages if we’re going to thrive in today’s cutthroat market. But it’s really, really tough to give up the security that comes from thinking you know exactly who your customers are just because their profiles “fit” a pre-ordained market segment.
That’s one reason why it’s valuable to use multiple research methods where possible in order to drill down to understand the lived experience of your customers.
This might involve a combination of controlled/sterile experiments with uncontrolled/realistic observations of consumers in their natural habitats, so that hopefully the results will converge across methods.
Also, take the customer journey yourself! Too many times managers sit in their plush offices and imagine what their customers experience rather than doing what the Japanese call going to the gemba (roughly, the exact place at which the event occurs).
It’s only by living the experience in their shoes that you can truly appreciate the problem. So, take a deep breath, and get ready to unlock those cage doors. Your consumer chameleons await.