Think Customers: The 1to1 Blog

Regardless of "white noise", demographics is still important. At least, any offer with UVP inside should be addressed somehow to Joe Smith, 100 Red Socks Blvd. The thing is that it lost some traction in respect to segmentation. There's a slim chance to meaningfully segment customers based on pure demographics. Nobody can hope for a relevant communication having only a name and a street on his hands. These days, transactional data intelligently processed into customer scores rules the game of segmentation. Though, it's way early to say farewell to demographics as the segmentation tool because baby boomers and generation X are still different, and you can use it as a first cut . After all, a direct mail must be directed somehow.

I should hope that demographical data is not dead, otherwise, we have no scientific (vital statistical data) way of understanding 'who' we are trying to communicate with! That said, what most marketers mistakenly overlook is 'context'. Why are people saying the things that they are saying? What behaviors and attitudes are influencing those actions, needs and wants?

I've been fortunate enough to have worked with and continue to work with some of the most innovative minds (and brands) out there. These groups have been able to realize great success after they stopped viewing customers and prospective consumers as targets and started thinking about them as people - real people as unique individuals.

My business (www.thinkpassenger.com) is connecting brands with the people who enjoy its products. More importantly, enabling these two parties to engage in an ongoing dialogue. The best part about this engagement is the social context that it is bathed in , which converts casual conversation into insight that brand managers and product development managers can actually act on with great confidence.

People are already talking about your brand. It is up to you whether or not you choose to join the conversation and benefit from forging relationships with people and not throwing darts at targets.

Companies slice and dice their customer base into a million slivers in a quest to meet specific needs while overlooking the basic needs of all customers—clarity, convenience and confidence. Customers want to clearly understand what they are paying for, to use the product or service easily and to feel confident that they have made a wise choice.

Why do so many companies fail to meet these basic needs?

They lose sight of the basics in a rush to make variations. It is worth remembering that vanilla ice cream consistently outsells other flavors two to one. This does not mean that ice cream parlors should only offer vanilla. But it does mean that they must be certain that they do not stop carrying vanilla when they offer 26 other flavors.

All too often, when a company offers customized programs to finer and finer slices of the customer base, it loses sight of the basics of what any customer wants and forgets the power of asking the customer instead of guessing.

I disagree that demographics are dead. Is it enough today to truly manage your marketing and target strategy? No, but at the same time, it can be important analysis to start with. It gives you base information which then allows you to create some hypotheses about your customer base, so that you can provide some structure to your next round of more in-depth questions

Demographic based segmentation is dangerous as it creates "scotomas" or blind spots. When marketers slice up customers or markets by demographic or other rule based segmentation, they become organizationally blind to the real drivers of needs and behaviours. Typically, these segments last for eternity; budgets, personel and management are developed around them and they take on a life of their own. One global finance services company created a segment of "professional women". After years of marketing promotions, dozens of "customized" products and an empire to support a budget to die for, I had the envious task of telling them a sad fact; their segment had no professional women it!.

It was only after a "needs" study built on dialogue that we learnt professional women don't like buying from middle aged male advisers and that a new breed of female financial services' executives were needed if that group was to be won.

Besides smelling like commercial discrimination, demomgraphic based segmentation blurs corporate vision to real opportunities and issues.

Leave it to the old style ad agencies who are trying to catch up to 1.1 and database driven marketing.