Behavior vs. Emotion: What It Means For Market Segmentation
Oct 27th, 2009 by David Svet
Personas defined by personality types form the basis of most market segmentation efforts. This has been the case since the late 1970s. In their defense, they are helpful for reaching a particular psychophic profile — when you need to show what I believe and how I look. However, the use of personas has sprawled into other aspects of marketing where they prove to be wholly unsuited and very unproductive. Psychographics are good at providing a basis for stimulating emotions. But emotions don’t have much to do with buying behaviors. Their use results in powerful marketing campaigns that often do very little to the bottom line. When the desired outcome is a specific behavior it’s best to segment by specific behaviors.
As the marketing and sales process become more data driven this is easier to do and necessary to drive meaningful results. Since all organizations are goal driven, it’s a matter of backing up from the goals to identify the behaviors that lead to success. Along the way you will also discover the behaviors that lead to alternate outcomes. By viewing desired and undesired outcomes with the behaviors that lead to them, it is possible to identify the path for driving growth. To do this effectively it helps to collect and examine multiple types of data that define needs, attitudes, beliefs, and behaviors:
• Demographics (age, sex, zip, occupation, assets, etc.)
• Behaviors (services currently used, number of transactions per month, number of calls/visits/queries per month, etc.)
• Attitudes (risk tolerance, level of engagement in the process, willingness to advocate, etc.)
• Lifestyles (personal interests and belongings relevant to the desired sale)
• Aspirations (future interests and belongings relevant to the desired sale)
• Sales (historic quantity of sales, size of transactions, profitability, etc.)
The particular data points that are used should be chosen for their direct impact on the desired behavior. The extent of your analysis should be driven by what’s at stake for the customer — the size of their investment and its long-term impact on their life. For instance, making a $25 online donation to an animal shelter requires some insight into willingness to donate, willingness to do so online, and loyalty to the shelter and/or animal species being helped. Alternatively, deciding where to invest for retirement requires some insight into a customer’s self image, aspirations, risk tolerance, and financial acumen. In both cases, trying to move the bottom line by making an emotional appeal to a particular persona will yield lackluster results. But making an emotional appeal to specific segments based on a wide range of current data will generally yield the desired outcome.
The trick is to focus on behaviors that drive meaningful results, avoid obsessing over defining specific customer identities, and keep the technical analysis simple. It’s an ongoing process as your customers are a moving target. If you develop a process to discover, record, and analyze the data relevant to specific business decisions, you will be rewarded with repeatable and predictable results.
Some good thoughts here Dave.
It’s interesting to see how the value of real time search, analytics & the ability to immediately respond is butting up against older perspectives best suited for mass advertising and blanket marketing campaigns.
What’s amazing to me is that the skillful use of technology can give individuals the ability to create campaigns on par with the quality of the older mass efforts, but created to suit an immediate need. Using real time analytics, be it Twitter, Facebook, or simply Google search it’s possible to get a good perspective on the market at any one time and create simple, effective and elegant solutions/drivers where they are needed.
I often wonder if all the data and socialness of the web will lead us to fully personalized content. We could reach a point where people aren’t grouped at all. Everyone has a customized message that they receive (or don’t receive) based on data about them.
Not that marketing has ever been efficient, but I could see it going in that direction
David and Ben,
Thanks for your thoughts! I think you are both right on track. The availability of solid customer data derived from behavior is ubiquitous. It gets easier every day to gather, manage, and use it. We’ve been using it for several years for investor communications and donor communications to deliver one-of-a-kind materials in print and online. It’s really not that difficult to have 200-300 data points hit a single piece. At that point everyone is getting something that answers their particular situation.
It’s a very exciting time to be working in this area!