Why behaviour beats demographics when it comes to segmentation

Exclusive Marketing Week research shows marketers are shifting away from classic demographics to find more nuanced ways to segment consumers based on their behaviour, personal interests and life stage.


Classic demographics like age and gender – despite being tried and tested for years – appear to be losing their popularity among marketers as the most common forms of segmentation. The wealth of customer data now available means brands are increasingly evolving their approach to reflect their consumers’ behaviour, attitudes and life stage.

Procter & Gamble (P&G), for example, has shifted the focus of its segmentation strategy from “wasteful mass marketing to mass one-to-one”. The FMCG giant has combined anonymous audience data covering 90% of the US population with purchase data and analytics to move from “generic demographic targets”, such as women or an age group like 18 to 49, to more than 350 precise “smart audiences”, including first-time mums and first-time washing machine owners.

Then there is French food company Danone, which has started to segment its audience into ‘tribes’ united by certain passion points. It identified 16 tribes for its Volvic water brand and served each a short-form bumper ad on YouTube, which delivered a 40% lift in ad recall.

Clearly there are a plethora of segmentation methods available, but an exclusive Marketing Week survey of more than 800 marketers working across 23 sectors reveals that behaviour (44%), location (42%) and age (38%) are currently the three most commonly used.

When asked to reflect on recent campaigns, behaviour emerges as the most effective method of segmentation, according to 91% of the marketers questioned. Nearly three quarters (73%) think behaviour has also become a more effective means of segmentation over the past five years.

If you decide to use attitudinal segmentation you can understand the motivations driving a customer. However, this doesn’t help when it comes to actually targeting them.

Jonathan Wood, MoneySuperMarket

Location (78%), personal interests (78%), life stage (73%), attitude (72%) and financial measures such as income, wealth and budget (67%) are also deemed effective when segmenting consumers. Aside from behaviour, personal interests (70%) and attitude (64%) have grown most in importance over the past five years.

Despite being one of most commonly used methods of segmentation, age is deemed only the seventh most effective method (58%), followed by gender (58%), social grade (46%), household size/type (45%) and occupation (44%). Just 38% of marketers consider education to be a very or quite effective method of segmentation.

It’s social grade, however, that has lost most relevance over the past five years, with 25% of marketers saying it has decreased in effectiveness, followed by age (14%) and gender (12%).

READ MORE: Stop defining over-50s by age alone or risk long-term brand decay

Despite the emerging importance of behaviour in the segmentation mix, Lysa Hardy, CMO of luxury confectionery brand Hotel Chocolat, is clear it would be wrong to ignore demographics such as age.

“It’s one of the things we look at, but I suppose it’s gone from being one of the few pieces of data we actually had to being one of many things, and it’s not the most important thing,” she says.

“It’s all about a mindset and attitude, but there are things that still matter. It’s about being more dynamic in how we use that data.”

The brand is careful not to make assumptions based on purchase behaviour alone, given that many of its customers buy for gifts rather than for themselves.

Even among the more than 55,000 members of Hotel Chocolat’s subscription offer Tasting Club, different motivations emerge. For some, receiving a chocolate box on a monthly basis is about convenience and having a guaranteed supply of the product. For others, it’s about trying new flavours, indicating two very separate needs.

The Creation Box sent to Hotel Chocolat subscribers.

Hardy finds classic demographics, like age and gender, can often be an artificial way of grouping people and therefore prefers to take a dynamic approach. For example, Hotel Chocolat blended gender demographics with attitude, behaviour and age to decide who to target for the messaging around this year’s ‘Galentine’s Day’, where women – particularly millennials – send gifts to female friends on Valentine’s Day.

“It could actually be that you overlay one, two, three or four of those things all at once. It could be that you say you are going to take millennials and look at a specific gender or age, plus look at an attitude, a belief or an affinity to some other product or brand,” Hardy suggests.

“It’s really starting with the objective and thinking about what’s the best way to get to the most accurate segment for that particular objective.”

READ MORE: Russell Parsons – A memo to marketers everywhere, life doesn’t end at 50

Know your market

Daniel Lambrou, head of youth and mass segments at Vodafone, has spent years trying to better understand customer behaviour.

In his previous role as segment marketing manager for Vodafone’s partner markets, Lambrou oversaw a shift in strategy away from product-orientated marketing to customer-orientated marketing. At Vodafone this approach is split into three parts: segmented strategy, segmented propositions and segmented go-to-market.

First, marketers must be able to define the segment within their market and identify the opportunities posed by this segment. The segment could be defined by age, life stage or behaviour, but the marketer must be able to find them within their customer base and see a meaningful commercial opportunity.

Next, Vodafone’s marketers build a proposition based on this insight, which creates value for this specific customer and for the business. Finally, it is about taking the product to market in a way that is relevant for that customer.

This thinking was applied to the launch of Voxi in 2017, Vodafone’s youth sub-brand, which initially focused on those aged 16 to 25. The team identified a highly engaged group of young people, with high levels of smartphone use and a desire not to be tied into lengthy contracts.

Vodafone used a comprehensive segmentation strategy as the basis for Voxi.

Within this group, Lambrou found three life-stage sub-sets. There were the 16- to 18-year-olds either in full-time education or undertaking an apprenticeship, and two groups within the 18- to 25-year-old age bracket – those at university and those in full-time employment.

Despite being three distinct sub-segments with different needs, attitudes and levels of maturity, the marketing team found the same tensions around making decisions about their future and seeking independence.

This insight informed the decision for Voxi to offer unlimited use of social apps and no fixed contract. Having recognised similar behaviours among people aged 25 to 29, Voxi officially extended its eligibility to those aged up to 29 in May.

Age is one of the things we look at, but it’s gone from being one of the few pieces of data we actually had to being one of many things, and it’s not the most important thing.

Lysa Hardy, Hotel Chocolat

Lambrou believes that behavioural, attitudinal and lifestyle measures are becoming more effective due to the increasing number of digital insight tools available to marketers to reach their audiences based on these.

“That’s where we’re moving towards in the digital marketing arena – a segment of one; highly personalised, highly contextual segmentation, based on many multiple facets of your individual interests,” he states.

“As an individual you’ve got a huge spectrum of interests and behaviours, and a lot of that is playing out online and is visible to marketers, so we can get much more effective at reaching customers at relevant points in their life.”

READ MORE: ‘Ad land’s obsession with youth will come at a cost’

Blended approach

The approach at price comparison site MoneySuperMarket has evolved from life-stage segmentation to a hybrid method combining life stage, demographics, customer needs, attitudes and behaviours.

The site taps into 700 data points from enquiry forms, page visits, clicks and emails opened to external sources such as land registry data, including average house prices.

Head of customer insight, Jonathan Wood, says this strategy has helped the team understand on a much more granular level how customers behave differently with different products. Wood is also certain that segmentation is only useful if your objective is clear and you know how the business can use this insight.

“If you decide to use attitudinal segmentation you can understand the motivations driving a customer. However, this doesn’t help when it comes to actually targeting them, so segmentation in this instance becomes unproductive,” he adds.

Life stage is the key method of segmentation for travel business Eurocamp. Families are a core segment, within which there are a number of sub-sets with differing needs, from families with pre-school children to those with teenagers.

One holiday persona celebrated in Eurocamp’s latest campaign.

Head of marketing Chris Hilton explains that life stage has been at the core of Eurocamp’s segmentation for some time, although the approach is becoming more nuanced.

On top of this, working out where people are in their purchase journey and the level of understanding they have of the brand also feeds into how Eurocamp communicates with customers on a one-to-one basis.

“There was a period where it was suggested we should be looking at attitude as a primary means of segmentation, secondary to life stage, but we didn’t find that useful,” Hilton explains.

“When it comes to holiday behaviour, the attitude and what people are looking for can vary from one occasion to the next. Using our latest campaign as an example, the same person can want a chilled holiday one time, but then with the next holiday they might be looking for something more active.”

For the ad campaign, devised by creative strategists Squad, Eurocamp featured a variety of different family activity types, including ‘paddlers’, ‘chillers’ and ‘sliders’. While these types of holidaymaker exist within its segmentation, the brand has pulled out various extremes among its audience to show prospective customers that its holidays cater for different types of people.

Occasion mentality

Being a mass-market brand with nationwide scale can present a challenge as marketers need to ensure their product appeals to a wide cross-section of the population. Beer giant Carling has chosen to focus on the different occasions when its product is consumed and then segment according to these “demand spaces”.

The brand layers this occasion-based segmentation with local and global ethnographic research to help it better understand who its customers are, what drives them and how they engage with the world around them.

The futures team at Carling then analyses how the macro trends affecting society relate to both consumers and the brand. Brand director Miranda Osborne explains that all these elements triangulate to identify “some real common ground”.

The Carling team sees commonalities in attitude across its customer base. These people identify as self-made, resourceful, dynamic individuals deeply connected to their local communities. This insight is at the heart of Carling’s recent ‘Made Local’ campaign, developed by Havas London, which celebrates the people making things happen in their hometowns from Burton-on-Trent – where Carling’s brewery is located – to Swansea.

Despite the sophisticated, layered approach Carling applies to segmentation, Osborne points out that traditional demographic profiling is still being used when buying media.

She wants to know when media buying is going to “catch up” with the way brands now intelligently segment audiences.

Regardless of the approach to segmentation marketers choose to take, the strategy first and foremost must be objective led. Whether looking at a specific demographic, or focusing on a behavioural insight, attitude or life stage, the key is to be clear about what you want to achieve and resist trading in stereotypes.

As these marketers have shown, it is important to be balanced and take a nuanced approach, which evolves in line with the audience and layers up a wealth of data points to develop a comprehensive view of the customers’ needs.