Brands must return to the fundamental marketing practice of consumer segmentation: by Jennifer Pollack and Angela A. Rodriquez, June 24, 2020
For the past decade, marketers have used the money-saving idea of “universal” insights to drive marketing strategies. And for the past decade, many brands have seen stagnant growth among the segments that have seen increases in population and spending power.
The pandemic has not only affected communities differently, but revealed that their coping mechanisms are driven by very different values and beliefs—now combined with the generation-defining Black Lives Matter movement. More than ever, brands and marketers must look beyond the universal and go back to the fundamental marketing practice of consumer segmentation.
Many are doing it at the behavioral level, but behavior gives you only the “what.” They also need to incorporate the segmentation of consumers with like mindsets and shared cultures and values to get at the “why.” That means taking another look at what they are doing to connect with Hispanics, Blacks, LGBTQ+, Asians and other consumer tribes. And it means asking themselves if they are speaking with the specificity of nuance required to authentically connect. If brands want long-term growth, they will need to build deeper roots with every segment versus a superficial connection across all.
Here is what needs to change:
Treat consumer segmentation as the business imperative it is
Few brands hold their fair share of market across consumer segments driving growth in America. Even fewer enjoy leadership positions with these consumers to the degree that they don’t need to court them. Simple Category and Brand Development Indexes among segments or key markets can highlight the business opportunities that exist.
Just like an employee resource group is not enough to affect diversity and inclusion, identifying the business opportunity alone is not enough to grow business. Real actions throughout the marketing Ps are essential to meeting a brand’s potential with each opportunity segment.
Go beyond demographics and get human
Begin with the underlying belief that humans are cultural beings: interdependent and influenced by tribe. They hold beliefs and attitudes that shape experience and behavior. They are not an age, a geography or a household income, but it is common to rely on demographic data to paint a picture of the “who.”
By segmenting consumers by tribes and cultures, brands can uncover how best to connect. Understanding a specific segment’s mindset when engaging, which allows for more specificity in messaging, is crucial to success.
Pay attention to which tribes are leading the conversations in your category and engage with them. They can teach you more than you think about what you need to do. They are what keeps your brand alive and kicking.
Commit to understanding what and why
What people do matters, but “why” they do it is where brands can start to understand, empathize and motivate them to action. In-language and in-culture research is key to unlocking these deeper insights.
Marketers have moved from dedicated groups of culturally united consumers discussing ideas and business issues as it relates to their experience, to mixed groups which are good at getting to universal truths but bad at illuminating the depth that dedicated segment research can uncover. Safe spaces among peers are much more effective at allowing people to share the in-group distinctions that can reveal meaningful insights.
Brands should be cautious about overreliance on quick methodologies. There’s a place for turnkey solutions and the disaster checks they can help brands obtain, but foundational learning agendas are crucial to developing resonant communications strategies.
Tell specific stories
We should flip the adage, “It’s not just what you say, it’s how you say it,” to help guide us. While nowadays we focus a lot of effort on “how” we tell our stories with detailed journeys and communication plans, we need to give just as much attention to “what” we say.
Universal messages are dangerous. They can cause a backlash or negative campaigns against brands. On the other hand, specificity drives authenticity. Telling a specific story about a person or tribe is the closest you can get to true, real and authentic.
If you’ve gotten to the “what” and “why,” you’ll be uniquely positioned to tell stories that hold a mirror up to the groups you aim to reach. Ads that do this best include Cheerios’ “How to Dad,” McDonald’s “First Customer” and P&G’s “The Talk” and “The Look.” These contain nuance beyond the obvious, and elements that only those inside the culture will understand.
ANA AIMM’s 2019 “Cultural Insights Impact Measure” study found that ads perceived to have high cultural relevance doubled brand perception and tripled ad effectiveness compared to those with low cultural relevance. This held true across ethnicities. In other words, the study proved that “universally appealing” ads were less appealing than ads telling nuanced, insightful stories.
Have a purpose or don’t
Purpose-driven marketing is about doing the right thing and not about selling. This is why brands including Ben & Jerry’s have been in the center of conversations in the Black community over the past few weeks. Its actions around the BLM movement are authentic not only in execution, but because they build on the company’s record of speaking up on civil rights and race issues.
Segmentation that unlocks cultural and tribal insights can help brands connect with specific and authentic messaging—which can show they care about consumers, not just the dollars they bring to the bottom line.
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