Something has gone terribly wrong in marketing departments. The consumer data that marketers have relied on for decades to build brand equity and great brand experiences is no longer producing winning results. Yet no one wants to be the first to admit that survey-based, demographic information, which served as the foundation on which companies build their marketing plans and spent their marketing dollars, just doesn’t cut it anymore.
Today, in the era of Web 2.0, consumers are using multiple touchpoints to behave and purchase according to their own core motivators and values, not according to their location, gender, or stage of life. So what’s a marketer to do?
To thrive in today’s fragmented marketplace, you first have to admit that reliance on demographics and traditional segmentation no longer works. The “typical consumer” is no longer typical. Today’s consumers are multichannel, active, engaged, and in control. Now that these consumers can choose their experiences with your brand, your success or failure is determined by how well you really know your customers. You no longer sell to them: They choose to buy from you.
I’m going to share five dirty little secrets that smart marketers have held onto. I hope this sheds some insight into what matters now when marketing to your customer:
Dirty Little Secret #1: Men And Women Are Not Alike
Understand this: Gender is irrelevant. Instead, you need to understand the primary motivations that drive your customers’ interactions with and expectations of products, services, and brands.
In a study User Insight conducted on cruise vacations, the client asked us to interview a group of “boomer” women, who they had identified as their target audience. We found that boomer women were neither the ones generally making the vacation decisions, nor were these women visualizing themselves walking on the beach in bikinis. Targeting them as a demographic would have missed the mark.
We found that people choose their cruise vacations based on one of three things: destination, party opportunities and relaxation. Messaging for each of these vacation personalities needs to be specific, and gender is not a viable point of distinction.
Dirty Little Secret #2: People Can't Be Changed
We all have core behaviors that make us who we are, and understanding these behaviors is the key to understanding and building offerings that resonate with your customer base. One core behavior that our research has identified is that people are either spenders or savers, and they go to great lengths to support who they are at the core. If you are spender, then you will find a way to spend, even if that means using coupons. Spenders justify spending by finding deals and cashing in points. While they are say that they are “saving,” they are really just spending in a different way. A true saver would never part with their money in the first place.
Knowing your customers’ core behaviors allows you to better incent them and build loyalty by giving them an experience that supports who they are.
Dirty Little Secret #3: Life Stage Impacts Decision-Making
Great marketing is all about knowing how your customer is defining their needs, and making sure that you understand what they are saying.
In a recent project, a banking institution wanted to build a new Web site based on the demographics of three life stages: newly married, those saving for college, and those retiring. In actuality, we found that people were not looking for a bank based on these criteria, but instead were looking for what each group called convenience. As we looked deeper, we found that their common language had nothing in common at all. One group wanted nearby ATMs, one wanted user-friendly online tools, and the third wanted close personal relationships with their banks. Life stage was never a factor. They all used the same word to define their needs, yet each one had a very different definition of what they really needed.
Dirty Little Secret #4: Size Is Important
We often have companies ask us, “How many of a particular group exists in a certain city?” We tell them, it doesn’t matter. In fact, social media case studies have shown that just one share or recommendation from the right person can be the lynch pin difference between success and failure.
In a recent product study, we found that one of the most influential target groups makes up about 5 percent of the overall population. Despite the small target, for certain brands that’s where the bulk of marketing dollars and effort need to be focused to get maximum reach.
Dirty Little Secret #5: The Buyer Is The Driver
Today, the things families buy, and the way they buy them, makes much of the data confusing and nondirectional. The person “buying” is often not the most influential person anymore. Users on an account can have more influence than the buyer, and you have to look at the family unit as a whole to successfully market to them and understand who is really making the decision. This is especially true of any shared account situation--take Netflix, Amazon, or the iTunes store. Is that 40-year-old man really into Japanese comics, or is the primary purchaser his school-aged daughter?
The Not-So-Dirty Little Secret
Research needs to start focusing on “why”--why did that consumer make that purchase decision? Our company interviews 3,000 to 4,000 consumers each year, almost exclusively in one-on-one discussions in the places they work, live, and play. This unique opportunity allows us to see patterns of behavior across contexts. In our research we don’t intentionally set out to disprove segmentation, but the data is telling us that theories based on old ways of thinking are often off-base.
“Who?” has become less of the question, as people’s personal information is more easily accessed. The question now is “why?” If marketers can understand this, then they may have just found a way to tap into new sales.