People don’t like being lumped into marketing segments

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Sep 19, 2018
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MarketingCharts staff

Through a special arrangement, presented here for discussion is a summary of articles from MarketingCharts, which provides up-to-the-minute data and research to marketers.

Personalization is all the rage these days, with a primary goal being to enable one-to-one communication. A new survey from Selligent Marketing Cloud may provide one reason why marketers who have yet to move to individualized campaigns may want to work on those efforts rather than marketing to broader segments.

The survey, fielded among 7,000 respondents globally, found an overwhelming preference for being treated as an individual rather than a member of a segment. Fully three-quarters (74 percent) agreed that they expect companies to treat them as an individual, not as a member of some segment like “Millennials” or “suburban mothers.” The figure was slightly higher (77 percent) when it came to U.S. respondents.

The trouble for marketers, though, is that consumers express a reluctance to provide the data that can enable that type of engagement. About three-quarters of the survey’s respondents are at least somewhat concerned about companies tracking their behavior on their websites and apps — the type of first-party data that could be used to personalize experiences to the individual user.

The conflict between desire for personalization and privacy is evident elsewhere in the results, too. Fully 62 percent of respondents are “quite” or “very” concerned about companies tracking their location even when they’re not interacting with them. And yet only 41 percent have that level of concern about companies sending them messages based on their current location or need.

Other findings:

  • A third expect brands to anticipate needs before they arise, and a whopping 70 percent agree that it’s important that brands understand a consumer’s individual situation (e.g. marital status, age, location, etc.) when they market to them.
  • When it comes to “willingness to receive an alert about a sale for a store I was passing by,” 48 percent of Millennials welcomed geo-targeted ads while out shopping, compared to 43 percent of Gen X and only 29 percent of Boomers.
  • Only one in five consumers are willing to provide data to brands up-front in order to improve their experience.

DISCUSSION QUESTIONS: Is using customer segmentation increasingly feeling like stereotyping to consumers? Are there ways to reduce the number of off-the-mark and annoying pitches to individuals caused by such broad groupings?

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Braintrust
"The most important thing is context -- what is the shopper trying to achieve? If you can speak to that, they're not going to care if the message was crafted uniquely for them."
"Marketing segmentation is the lazy-man’s guide to cliches."
"It is a necessity to segment for scaling and also for privacy reasons. By grouping customers into segments, it is easier to protect anonymity."

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17 Comments on "People don’t like being lumped into marketing segments"


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Sunny Kumar
Guest

Segmenting customers is flawed. For the reasons outlined in this article and because the notion of a target audience only serves to limit who you talk to. Working with more universal truths such as consumer needs and moments that matter is a better way for brands and marketers to take a user-centric approach to understanding their customers and what they may be interested in.

Charles Dimov
Guest

As a marketer I can answer, yes — but it is a necessity. Personas are basically generalization or stereotypes of customers (groups of customers). In marketing today, we have to generalize to create groupings so that you know who to target with the right ads and the right offerings. This sounds crude, but it prevents a 65-year-old from getting ads about next month’s back-to-school supplies. Yes some of them need it, but the messaging is best suited to parents of school kids.

Some will argue that we already have AI that can individually target. Yes, this tech is getting better. But we are NOT there yet. Does the future hold promise in this area? YES. I am excited to see these cool new developments. On the D2C front, this tech will definitely help marketers home in much more accurately to truly offer personalization — which generally is not working well yet today.

Neil Saunders
BrainTrust

While it’s kind of obvious that most people would not want to be lumped into an amorphous group, the problem is actually that traditional segmentations are becoming less relevant. Society is much more fragmented that it used to be and it is far more difficult to predict how someone will behave based on income, age, location and so forth. Certainly there will be some commonalities — parents will buy baby and kids stuff, for example — but outside of that, patterns of behavior vary enormously. This atomization means that marketing needs to be a lot more personalized and a lot less assumptive. However, getting the data to drive this can be challenging.

Nikki Baird
BrainTrust

I second Neil. Behaviors and interests — and context — are much more important than demographics. Trendwatchers talks about the current age being one of “post-demographics,” where making assumptions about what people want because of their zip code or marital status leads to marketing fails more often than successes, and I agree.

However, I don’t think the answer is to toss out demographics entirely, or somehow try to skip to the end and jump straight to “individualization.” We’re not THAT unique, when it comes down to it — there are many common interests and behaviors. And once you find some commonalities, then you can use demographics as a way to try to find more people “like them.” The most important thing is context — what is the shopper trying to achieve? If you can identify that, and speak to it, they’re not going to care if the message was crafted uniquely for them, but it might just feel that way.

Dave Wendland
BrainTrust

Finally, confirmation (and research) for something I have been suggesting for some time. Consumers do not want to be grouped by demography, by geography, by customer segment or, worse yet, by age range (every brand appears to be focused on ALL Baby Boomers or ALL Millennials).

It seems the word “relevance” has become ever-present in my vocabulary of late. However, creating individualized messages that will resonate with customers has become a minimum ante in today’s high-stakes retail game. At the risk of crossing the threshold to creepiness, if the message received does not flirt with an invasion of privacy, I believe consumers will continue to respond favorably and that their purchases will increase.

Technology enables and powers personalization. When used wisely, the rewards can be bountiful.

Ian Percy
BrainTrust

Well said Dave, though I do feel better having put the word “finally” in all caps! Looks like what we’ve been preaching for some time is being heard! May it be so.

Dave Wendland
BrainTrust

AGREED.

Ian Percy
BrainTrust
FINALLY — we have the realization that the human heart, mind and spirit are not widgets and commodities that we can compartmentalize or turn into data and algorithms. What does it say about us that we even try to do that? My only quibble is that the realization in this article isn’t all that deep. There is still the claim that if you’d refocus your analysis from groups to individuals you’ll suddenly have “engagement.” NO YOU WON’T! The best you may get if your offer is attractive enough is a transaction. Nothing wrong with that, just call it for what it is. If the store across the street offers something better or cheaper, the customer will have no loyalty. Buying something does not equal engagement any more than buying a hotdog at a 7-Eleven makes you want to go back for another. As in human relationships, “engagement” means a choice toward, a forsaking of all others, etc. My wife and I are “engaged” with Trader Joe’s for example. I don’t recall ever going to Trader… Read more »
Ralph Jacobson
BrainTrust

I’ve posted many times here that not all Millennials are alike. There are plenty of technologies in the marketplace today that can help create personalized marketing campaigns with machine learning capabilities that “learn” to target specific shoppers with relevant offers. This can and IS being done today successfully.

Jennifer McDermott
Guest

Of course customer segmentation is stereotyping but stereotypes exist for a reason. In an increasingly fragmented market, it’s not viable for most companies to take a personalized approach with potential clientele, and so they need to go off the generalizations associated with the limited data they have available.

Cate Trotter
BrainTrust
These results aren’t surprising. Who likes the idea of being lumped into some generic category? The concept of us all being special and different has been a big selling point and customers want to retain that feeling of being an individual. At the same time it’s hard to do that without providing brands with information about yourself. This is where the issue comes as we’re all pretty worried about privacy and our data and who’s got it and how they’re using it. One way for brands to counteract that would be to be as clear as possible about what they use the data for and to not ask for too information they don’t need. It’s a bit of a catch 22 — customers need to see the pay off of giving their data to feel confident about handing it over but they won’t hand it over without seeing how they’ll benefit. That said, there is a lot more that retailers could do with the information they have now on customers just in better ways eg… Read more »
Cynthia Holcomb
BrainTrust

Segmentation, putting people in buckets, based on demographics, inferred behavior, collaborative filtering and the like, spun into 100s of variations by marketers can segment for basic items like dish soap, for example. But not for products purchased based on individual sensory preferences of taste, fit, look and feel. Marketers are desperate to solve for individualization, yet tirelessly use the same annoying tactics, chasing the consumer with retargeted ads, email spam offers and outright selling consumers personal information. Daily, marketers release PR missives touting introduction of their newest “innovation.” All buzz. Marketers and retailers alike need to open up their minds and legacy silos to testing new technologies. The solutions are hiding in plain sight, crowded out by all the noise, fear of change, legacy and “chasing the market” nanosecond world views.

Tom Dougherty
Guest

Marketing segmentation is the lazy-man’s guide to cliches. Differentiations are the product of anthropological examinations. Not trite segmenting. Another example of how the customer is always right.

Sterling Hawkins
BrainTrust

There’s no such thing as an average customer. However, humans need to conceptualize averages to understand. We need some kind of definition of the masses in order to know how to act. AI changes that paradigm. It’s able to look at, understand and interact with everyone on a truly personalize basis (as least within the constraints we give it). Until we get to that point, I’d say that if any marketing is landing with people as annoying and stereotyped, the averages are off and it’s poorly done to begin with.

Kenneth Leung
BrainTrust

It is a necessity to segment for scaling and also for privacy reasons. By grouping customers into segments, it is easier to protect anonymity. Customers can belong to multiple segments, but you also then can create the actions/offers that are scalable. We have limited ability to do individualized offers cost effectively, so segmentation is a means to scale limited numbers of offers.

Seth Nagle
BrainTrust

I believe the unofficial definition of customer segmentation is stereotyping; however, with an outbound marketing strategy marketers have their hands tied. The only way to reduce the number of off the mark pitches is to deploy an inbound strategy that allows marketers to create detailed shopper personas.

Craig Sundstrom
Guest

Well of course everyone wants to be treated as an individual. But do people really think a company — any company — is going to design a product or a marketing campaign specifically for them? I can’t believe anyone, let alone 3/4 of everyone is that delusional … or has the sense of entitlement really gotten that out of hand?

wpDiscuz
Braintrust
"The most important thing is context -- what is the shopper trying to achieve? If you can speak to that, they're not going to care if the message was crafted uniquely for them."
"Marketing segmentation is the lazy-man’s guide to cliches."
"It is a necessity to segment for scaling and also for privacy reasons. By grouping customers into segments, it is easier to protect anonymity."

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