Deeper and more meaningful customer segmentation – marketing’s forgotten tribes

Somewhere between one-to-one marketing and mass marketing, there’s a strategy which is slowly being lost. It’s the ability of marketers to segment and then target large groups of influential people with their product or service. Not the simplistic, default categories like millennials, grocery buyers, mums, primary cooks and over-50s. But groups that marketers understand even a little more deeply. Because first-time mums, cooking avoiders and active holidaymaking older couples conjure up far more interesting segments to target. And it’s these sorts of groups that are fast becoming marketing’s forgotten tribes.

Personalised, tailored, one-to-one marketing has been the nirvana pursued by many marketers in the past five years – the ability to communicate the right message, to the right person, in the right place, at the right time – all made possible by the leaps in technology and big data. At the other end of the spectrum, mass marketing still has its devotees.

Both are legitimate strategies that have proven to work, albeit the former in the short term and the latter in the long term.

But clever segmentation has been the cornerstone of the success of many well-known brands. It was extremely popular in the 1980s, 1990s and early 2000s. One US study in 2006 highlighted that close to 60 per cent of senior executives had used market segmentation in the two years prior.

It was particularly popular with fast-moving consumer goods brands. Huggies nappies has been one of those. Huggies’ marketing efforts for many years have targeted “first-time mums”. Huggies realised that having your first baby was a magical time, but also a time when there were many questions and new things to learn and experience. As such their emotional “It must be love” advertising struck a chord, as did their informative website, Huggies Club and Parents’ Forum. Mums became loyal Huggies users for not just their first child, but also their future ones, and Huggies has retained a dominant market share across those years.

Similarly, in 2013, Tourism NT’s marketers unlocked a segment of tourists which fitted perfectly – the young-at-heart, active older couples who sought holidays that required doing things, as opposed to lying around a pool. The subsequent “Do the NT” campaign soon saw the Northern Territory become the fastest-growing tourism market in the country.

More recently, the Google Home device seemed to pop up in households overnight, fuelled by a large media spend leading up to Christmas 2017, across a “combination of radio, TV, cinema, print, outdoor and online channels including search, YouTube and social”. But it was a clear understanding of an influential segment that led to the success. Google targeted “time-crunched young parents”, a group of some 2.4 million people. People who often have their hands full, even in their down time. They discovered that this group’s five most searched categories on Google were music, cooking, sports, movies and entertainment. And they then set about creating engaging communication that tapped into those five areas of interest, like the “what’s a googly” ad for the sports fans, all the while showcasing what Google Home could do. The marketing campaign drove brand awareness up by just over 10 per cent.

There have been similar successes with Four ’n’ Twenty pies targeting the “Aussie blokes being pressured into healthy eating”, AAMI the “safe drivers” and Bendigo Bank the “local communities”. The key is finding a segment whose common interest is unique and well understood, where your product or service is highly relevant to their needs, and your marketing and communications can be done in a memorable way.

While these cases highlight the success that marketers can derive from segmentation, the last decade has also seen some point out the limitations of the theory behind it. Mostly that the segments can be too broad, or too narrow, that consumers over time can switch into other less profitable segments, and that similar results have been gained by mass marketing.

Regardless, today’s young marketers need to ensure they are highly skilled at using every option within their marketing armoury. And just like their waning knowledge of being able to manage leadership brands in their excitement to manage challenger brands, they can’t afford to leave behind the ability to influence large tribes of people as they over-commit to technology-led one-to-one marketing. The successful marketers of the future will be well versed in all of these options, and how to best balance their use.

A version of this article first appeared in The Australian on March 15th 2019

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