Classification maps draw on group culture

It’s hard to put people in boxes and stick labels on them, but that’s part of what marketers have to do. As brands witness consumers shopping less by age or gender and more by their mindsets, the trend of putting consumers into “tribes” or “groups” rather than relying merely on demographics is more important than ever.

Many companies are using off-the-shelf consumer classification products, such as CACI’s Acorn and Experian’s recently updated Mosaic UK, which claim to make that job easier. Smaller companies may not be able to afford these, and may instead rely on their agencies, in-house teams or other market research-based methods. But regardless of what methods are used, this style of segmentation is growing increasingly popular.

Some of the “tribes” appearing in Mosaic’s 2009 list include Active Retirement, Alpha Territory and Terraced Melting Pot, which are the names used to describe groups of consumers and their habits. The groups have been updated over the past 12 months to reflect the types of people now appearing in British society.

As part of reclassifying the consumer groups, Mosaic found there are now two distinct phases of retirement within our ageing society, as well as an enclave of extreme wealth, increasing multiculturalism and growth in both single households and broadband penetration.

These findings may not be surprising to brands that have already experienced some of these changes in consumers over the past few years, but it can help them refine and target campaigns rather than treating people of similar ages or incomes in the same way. Robert Haslingden, head of marketing for business strategies at Experian, suggests: “The manifestation of new “neighbourhoods” can capture marketers’ imaginations.”

Such tools aren’t the only option for businesses wishing to glean a greater understanding of the population at large and how cultural attitudes affect spending. For example, “co-creation” specialist Promise has been working with financial services companies and Government departments to develop a better understanding of people coming to live in Britain from abroad and how best to communicate with them – with the aim of being able to produce more relevant products and services.

Following ethnographic research in targeted branches of a high street bank, Promise conducted focus groups in the respondent’s mother tongue, wherever possible. Respondents were also able to bring along a friend, who might have a better level of English.

“We spent at least three hours with respondents and involved clients directly,” says Ben Hayman, deputy managing director at Promise. “We found that ‘friend pairings’ can be more effective than using translators, which may prevent you from developing a connection.”

On the back of Promise’s research, its financial client was able to develop and tailor its product to individuals who have just moved to the UK. Rather than targeting these people by demographics, it found the common experience of immigration meant customers were looking for greater flexibility as opposed to extensive cover of goods that they may not yet have acquired. It also reflected the fact that some immigrants required single-room insurance and a product that took into account the high level of transience in their lifestyles.

Promise has also worked with the Ministry of Justice, the Department for Work and Pensions and HM Revenue & Customs to develop a more detailed understanding of immigrant communities. While noting the demographics are important, a source from the public sector says that developing cultural understandings through groups was vital and involved “huge” sensitivity.

Unfortunately, there’s no single consumer segmentation tool that can achieve optimum levels of cultural understanding for all brands or provide a single easy-to-apply shortcut. What’s more, working with research specialists comes with a price tag, as does using customer classification products such as Acorn and Mosaic.

Adele Gritten, head of media and financial services research at YouGov, describes such tools as “a winter coat over the rest of your clothing”.

“A number of our clients will look at [Mosaic’s] clusters for highly locally targeted campaigns, in a key region or in a test town or city,” she says. “It can help to tailor your message. But if you’re a good researcher, you’ll be spotting these trends yourself.”

She believes that Experian’s competitors will have to play catch-up, but that any researchers relying on defining consumer groups should redefine “tribes” at least every five years, despite the fact it’s “a costly process”.

Luckily, there are other ways for those brands without deep pockets to update knowledge about customers, which may not necessitate off-the-shelf solutions or large amounts of outsourcing. Many experts advocate standard online qualitative research, which can then be used to broadly segment consumers. This can be done in-house or brands can hire experts.

Even better than merely segmenting consumers into groups is getting people to define themselves by interest through communities. These allow companies to interact with consumers and maintain conversations over time. This type of immersive research – if done well – can even lead to the development of new products. For example, when Dutch-based Royal Philips Electronics wanted to look at psychographic profiles, such as whether individuals are early adopters or tech-savvy, it used online communities to recruit and to get to know market segments in various countries.

“This type of work can be more cost and time effective than focus groups or ‘mall intercepts’,” explains Julie Wittes Schlack, senior vice-president of innovation and design at US-headquartered Communispace. “Brands can take advantage of the fact that online communities can be built to develop long-term relationships and use these people for discovery.”

Community respondents can keep online diaries or create videos; such narratives become a vehicle for what Wittes Schlack describes as “virtual ethnography”.

Such community segmentations and “tribes” may be very helpful for brands to research the consumer landscape but they are not sufficient on their own. “You need to fill in the gaps with more precision,” she adds.

After all, people are unique, as are brands. A tool or an approach that works well for one won’t be appropriate for another. It will never be a case of just keeping up with the Joneses.