The dangers of segmenting your customers
Friday, September 22, 2017
Here is just a smattering of the marketing segments that are all the rage now in the business world: baby boomers, millennials, LGBT, honeymooners, families, singles, athletes, racial identities, bachelor/bachelorette, gender-specific, and on and on.
The goal of segmenting like this is to be able to market your products or services efficiently and effectively to your current and prospective customers. But does it work? Or are there risks in treating a large swath of the population as identical in needs and wants?
The problem with all these segments is that they consist of generalizations and stereotypes — an inherently dangerous practice. Lost in these generalizations is the uniqueness of the individual and that person's needs and priorities.
Segmenting by these various categories assumes that all members of this segment think alike, act alike, want alike. Do all honeymooners want candlelight dinners? Is a newlywed 80-year-old couple identical to a 25-year-old honeymooner? Do all families want the same thing, regardless of the ages of the children or the family personality? Do all singles want a party atmosphere?
When you sacrifice individualism to a common stereotype — without considering the individual — you run the risk of offending and alienating a customer who doesn't fit into your stereotype. That person would rightly suspect that you don't know about his needs and wants, are not interested in learning about his needs and wants, and are merely catering to a broad stereotype that might or might not apply.
Reducing your customers to a segment stereotype eliminates crossovers. Can't a newlywed young couple, who have been cohabitating for years, be more interested in experiential travel than setting up house, while an elderly newlywed be more interested in setting up a house than candlelight dinners and flowers?
When you generalize that a marketing segment is alike in many ways, you can also miss potentially lucrative opportunities.
Some years ago, I explored pursuing a doctorate in business and approached a prestigious university. When I asked about reconciling school and work obligations, I was told point-blank that I would be expected to move to campus and be a full-time student with no outside work obligations.
How realistic is that for a mature woman with family, financial and work obligations? Did the university assume that all students would be in their early 20s, still living at home and financially dependent on their parents? The university missed an opportunity to create a program for working adults who still wanted to advance their education and their value to the workplace.
Granted, when you're marketing services in a consultative capacity, it's much easier to tailor your services to the individual on a one-on-one basis.
How do you attend to the individual when you're marketing products that depend on volume of goods to a volume of customers? Rather than relying on stereotypes and preconceived market segments, why not assess your current clientele for the products and solutions they want?
You can appraise your existing clientele for criteria that you deem critical, such as their sales volume, loyalty and repeat business, or possibly their ability to bring in new customers. Evaluate who your customers are today and whether those are the customers you wish to cultivate in the future.
Develop product solutions to meet the needs of those people. What needs do they have in common, and what solutions do they agree on? Based on your criteria, you might decide that an infrequent commercial customer who buys an expensive power tool once per quarter is more crucial to your marketing efforts than the frequent homeowner customer who daily purchases a 10-cent screw.
The goal is to evaluate your own clientele based on real data from your own company versus stereotypical segments that the business media are touting.
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