We’ve all heard the clichéd wisdom about generational differences: Millennials are tech-savvy but entitled, Boomers are hardworking but resistant to change, and Gen X is independent but cynical. Very often, marketers and CX professionals conveniently rely on these generational segmentations to tailor their messages and services to customers.
While there are some gaps, among the generations in values, technology use, and social and political views, etc, relying solely on these labels can be an oversimplification.
The Problem with Generational Segmentation
- Broad Brush Strokes: Generational segmentation paints everyone in the same generation with the same brush. It’s like saying all Millennials are avocado-toast-eating, job-hopping techies. Which we all know it’s not true.
- Missing the Individual: By focusing on generational traits, you miss the unique quirks and preferences of individuals. Two Gen X-ers can have completely different lifestyles, spending habits, and values.
- Out of Touch: Customer preferences change. Generational segmentation doesn’t keep up with these shifts, making your strategy stale and out of touch.
Smarter Segmentation Strategies
If you want to connect with your customers on a deeper level, try these smarter segmentation methods:
1. Behavioural Segmentation
Divide customers based on their behaviour. Look at purchasing habits, product usage, and engagement levels.
- Example: Segment your customers into frequent buyers, occasional shoppers, and one-time purchasers. Tailor your strategies to each group’s specific behaviours and needs.
2. Psychographic Segmentation
Focus on the psychological aspects like lifestyle, values, and interests.
- Example: Target eco-friendly customers with green products and sustainability initiatives. You’ll connect with them on a deeper level than just their age.
3. Geographic Segmentation
Categorise customers based on their location. This is especially useful for businesses with region-specific products.
- Example: Tailor your marketing campaigns to reflect the cultural preferences and climate of different regions.
4. Needs-Based Segmentation
Identify and group customers based on their specific needs.
- Example: If you’re a software company, segment users needing advanced features from those wanting basic functionalities, such as ‘the experts’ vs ‘casual users’. Develop features and marketing strategies that address these distinct needs.
5. Value-Based Segmentation
Segment customers based on their economic value to your company.
- Example: Identify your top 20% of customers who generate 80% of your revenue. Develop loyalty programs and personalised services for this high-value segment.
Finally…
Generational segmentation has its merits, but it is no longer sufficient in the diverse and dynamic landscape of modern consumer behaviour. By using more nuanced segmentation strategies such as behavioural, psychographic, geographic, needs-based, and value-based segmentation, we can create more personalised and impactful customer experiences.