Marketers need to move beyond demographic data and “lazy” terms such as ‘millennial’ when creating customer segmentations, new research claims. Two separate studies find that patterns of behaviour and attitudes are more appropriate tools for targeting consumers than broad generational segments.
These findings tally with the views of Marketing Week columnist Mark Ritson, who has argued that catch-all generational terms often lead marketers to ignore the nuanced differences within their target audience. “If you buy the idea of millennials, then you must, by definition, reject the concept of proper segmentation and of consumers holding different perceptions and experiences,” he says.
The Empowered Customer Segmentation by market research group Forrester seeks to move away from demographic segments and instead group consumers according to how they respond to new products and technology. From a survey of more than 30,000 adults across nine European countries – including more than 6,000 UK respondents – Forrester has created five new segments that it believes brands should consider when marketing goods and services.
“There’s a type of behaviour and attitude that isn’t just a function of age or even a life-stage”
Anjali Lai, analyst, Forrester
This includes ‘progressive pioneers’, referring to the earliest tech adopters who “lead the demand for product and experience innovation”. According to the research, these people make up 9% of the UK population. This is followed by ‘savvy seekers’, referring to highly engaged consumers who are among the first to learn about innovation (17% of UK). The segments range down to those who are least enthused by market innovations, known as ‘reserved resisters’ (24% of UK).
A more nuanced picture
Forrester analyst Anjali Lai believes the research helps to present a more nuanced picture of consumers besides existing demographic categories. The average UK age within the ‘progressive pioneers’ segment is 34, while for ‘savvy seekers’ it is 38, suggesting that young people in their late teens or early 20s are not necessarily the most engaged or demanding when it comes to new technology.
“[The research] helps to prove that millennials aren’t one isolated group that poses the greatest threat to companies today,” says Lai. “There’s a type of behaviour and attitude that isn’t just a function of age or even a life-stage.”
The study also claims that businesses should measure how their customers are evolving and the extent to which different behavioural segments are changing. For example, the survey finds 41% of people across Europe read customer reviews at least once a week when researching a product for purchase, while 17% compare prices or look up product information on their mobile phone when in a physical store.
Lai suggests that these different forms of customer empowerment will lead people to become more demanding in their relationships with brands. “I certainly expect the ‘progressive pioneers’ segment to grow over time and for the ‘reserved resisters’ group to shrink – particularly if you think about the tools that are available to people and the newer types of experiences that are on the horizon.”
Undermine existing preconceptions
New research by brand consultancy The Gild also seeks to undermine existing preconceptions about generational groups. For example, it finds people belonging to Generation Z, which it defines as those born in 2001 or later, are more conservative in many of their views than baby boomers (1946-1964), members of Gen X (1965-1980) and millennials (1981-2000).
“We need to move past the recent trend of millennial fever, where appealing to a ‘millennial audience’ has become a lazy, if convenient, shorthand”
Andrew Mulholland, managing director, The Gild
A survey of almost 2,000 UK adults finds that on issues such as same-sex marriage, transgender rights and marijuana legalisation, 59% of Gen Z respondents describe their attitudes as being between ‘conservative’ and ‘moderate’. By contrast, 83% of millennials and 85% of Gen X respondents state that they are ‘quite’ or ‘very liberal’ on such issues.
On the question of saving and spending, baby boomers (39%), Gen X (61%) and millennials (53%) are most likely to say they will spend what they have ‘on life in the now’. Generation Z, on the other hand, appear more inclined to worry about saving, having grown up in the post-financial crash climate. A quarter (25%) of this generation say they would rather save for the future than spend money they do not have, while 22% say they never spend on ‘unnecessary, frivolous things’.
Andrew Mulholland, managing director at The Gild says: “Within each generation there are wide divisions in politics, culture and taste – and across generations there are attitudes that bridge young and old together. Treating the attitudes typically associated with terms like millennial or ‘Gen Xer’ as belonging strictly to one age range shows a lack of awareness of who people really are and how they really behave, in all their nuance and variety.
“In particular, we need to move past the recent trend of millennial fever, where appealing to a ‘millennial audience’ has become a lazy, if convenient, shorthand for some vague notion of achingly cool, social media-savvy 20-somethings who refuse stable careers and demand authenticity.”