Demographics are dead. Meet Advanced Segmentation.

Advanced Segmentation Marketing Strategy

Do these two people look THE SAME to you? Does it look like they live exactly the same way? Do they buy the same products or services? Do they make decisions in the exact same way? They are both male, 45 to 54, college educated with above-average household income (sound familiar?). If we were to use demographic segmentation, you would think that those two men are identical.

Demographic segmentation has been around since the 1920’s. It’s been firmly entrenched in marketing for decades and I believe it’s time to start letting it go. It’s obvious, even from the minuscule example above, that grouping people by age range, gender, education and income is actually a very weak way to develop true target markets. This is one of the many fallacies of using demographics in modern marketing, especially considering social media which has completely rewired the way we communicate eliminating geographic and media outlet boundaries.

Below, you’ll find two practical alternatives (or enhancements) that rely on psychology to connect you to your ideal customers. They are used by some of the most powerful brands in the world.

Connecting to Values.

Each of us has a built-in set of filters that are developed through three significant periods. Imprint years (birth to 7 years old), Modeling period (8 to 14 years old) and finally Socialization (15 to 21 years old). This formative period sets up our core set of values and helps us distinguish good from bad, valuable from wasteful and so forth. You already know that people who primarily place value on the environment have a very different psychological makeup than those who primarily place value on material goods and money. So, why would you talk to them the same way?

We must consider that fact when aiming to build relationships in the marketplace. Your brand values and customer values should be aligned. One of the great, recent examples of connecting to personal values is Dove’s Real Beauty campaign. They managed to create a movement by distancing from the over-produced, superficial and “fake” model of beauty their industry has been flogging for decades. They connected to real women by focusing on self-esteem, empowerment and family values. This was then executed through a number of channels including YouTube, billboards, powerful TV ads and so forth.

I would almost consider segmenting by values a push marketing effort. To do it successfully, you have to reach in and discover what your brand’s core values REALLY are and if you’re comfortable with them. This is of monumental importance because you CAN NOT put up a fake front, especially online. People will tear you apart. Just look at what happened when Chevy tried to sell their Tahoe to younger, eco and tech-savvy audience (talk about a disconnect). Once you know the REAL core values of your brand, can you start connecting with the personal values of your customers through marketing campaigns.

So… are you family-friendly, professional, serious, accurate, bold, charming, supportive… have a think about it and start your next marketing strategy by focusing on values rather than age, gender and income level.

Finding Meaning.

Meaning is immensely powerful. It’s something thinkers have pondered, argued and thought about for many, many years. It’s at the core of who we are and how we make decisions. One of the most prominent figures in this space is Carl Jung, who brought about concepts such as the Collective Unconscious and Archetypes. That’s a deep rabbit hole to go down… so how about we bring these ideas into a marketing context. Think about what it MEANS to own a Hummer H1… How about what it MEANS to wear a handmade sweater from your travels to Peru?

Each of those items conveys a certain meaning which ties closely to how you identify with yourself and others. This aspect of advanced segmentation reaches into identity theory. It reaches past out logical defences and into understanding who we are and who we wish to be. One of the best examples over the years has been Harley Davidson. They created meaning around their brand and their customers. They created a gravitational pull for those who want to feel like a bit of an outlaw. To own a Harley means something. It’s why don’t we see many Honda motorcycle gangs. It’s a meaning, a construct, consumers can buy into. So, you’ll have a dentist who lives a nice, cushy life (who he is) and buys a Harley to connect to the outlaw inside (who he wishes to be).

So, how do you use this from a brand perspective? You create meaning through the tone and style of your branding and marketing. It emanates from the colours you use, the images you choose and even how the phone is answered. Make absolutely sure that each marketing piece connects to the meaning you wish to convey. In the social media marketing space, this would mean the tone of your status updates, the links you share, the writing style of your business blog… Think about what it MEANS to own or use your product or service.

From a segmentation aspect, think about who your customers ASPIRE to be and connect to that. Harley has the outlaw vibe, Salesforce has the success vibe and Nissan Leaf has an earth-saving vibe. What is yours? Once you know that, you’ll see a clearer path to finding your ideal customers. They are the ones who see themselves as outlaws, successful salespeople or earth savers.

Demographic segmentation is all but dead. Unfortunately, its still flogged by many media outlets and agencies of yesteryear. Its time to break out. If you want to create genuine relationships in the marketplace and substantially enhance your marketing strategy, consider connecting to values and meaning rather then age, gender and income level.

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7 thoughts on “Demographics are dead. Meet Advanced Segmentation.”

  1. Hi Ernest.
    Informative and insightful post on an important topic. Any thoughts on how best to implement advanced value-based and meaning-based segmentation outside of social media? For example, how do you choose among traditional advertising vehicles if many of the ones with largest reach still collect and share demographics rather than information about the values of their audience?
    What type of “values” information should advertisers be pushing media outlets to collect? And do traditional demographics really have no value? Is it possible to combine some of our traditional criteria for segmentation with values-based criteria to create a laser-focused niche?
    One that informs both the type of information/message needed and the vehicles we use to reach the segment? OK, I’ll stop asking questions now… Thanks for starting a great conversation that should be on the mind of every marketer.

    • Hi Karen,

      Thank you so much for the comment and questions. Here’s some thoughts… Traditional outlets are still primarily relying on demographic info, so one way you could apply these principles is by understanding the meaning and values behind such outlets. For example, reading Wall Street Journal means something entirely different then reading the Oprah magazine. You may actually be reaching the same audiences in some instances. One caveat about WSJ… Lots of people BUY it and OWN it… but not necessarily READ it. The reason they do is because they identify themselves as a WSJ reader… which means something.

      Regarding combining, absolutely! You’d be able to create a very targeted, powerful niche in that sense. However, note what you give priority to. If you begin with demographics, you may be excluding some of your high value target markets… Consider starting with meaning for example.

      As for media outlets collecting information… IF that does ever happen… it’ll be very unreliable. How many of us are willing to share our values on a survey? How many of us even know what our REAL values are? It’s up to the branding and marketing leaders to determine where they fit and which values and meaning they connect to. That helps inform the channel mix decisions, messaging and of course targeting.

  2. I like what you have to say on this Ernest, and wholeheartedly agree that for some brands like the ones you’ve mentioned above, there is meaning attached to them…creating a sense of belonging or whatnot. Do I agree that demographic segmentation is all but dead? Probably not.

    Firstly, on some levels it’s a starting measurement point. For example, knowing that a city has X number of people who are male, between the ages of 25 and 40, college educated and this is a certain percentage higher than another city, will certainly aid an advertiser in deciding on priorities.

    Also, there are certain, more commodity type products, that really don’t care as much about a sense of belonging or psychographics. Frankly, if I am married, a parent of 3 small children under the age of 10, and living on one income – I’ll probably have to factor cost effectiveness into my purchasing decisions…at least on some things. :-)

    • Good points Deepa! I would argue that demo measurement wouldn’t be the same as segmentation. True, it may come in handy if you have a demo specific product such as denture adhesive, baby strollers or tuition repayment services… but all things being equal, it’s values and meaning that distinguish a brand, and therefore target markets.

      As for comodity products… think about Axe… or Dove. However, just like you said, certain buyers (and sometimes a lot of them) will look at price first, everything else later… which in effect marginalizes any targeting, marketing or branding efforts. Then it’s a price point war.

  3. Well argued Ernest. However, can you not think of companies that will target a certain demographic market, simply because it is much larger than that based on values? Afterall, money talks. Sometimes it’s volume that is the main objective in a market.

    I might agree that demographics are often used first, with values/psychographics/etc. being sub-segments.

    And I would definitely agree that nowadays there are many more case studies that focus on brand meaning than anything…however, I don’t see the importance of demographics being minimized to almost nothing quite yet.

  4. I find this information very interesting as I am always looking for better ways to reach all possible means of advertising to the right area, (location #1) and to be optimized for all generic searches. (people finding me) The baseline of demographics are still useful but may need some refinements. What you are doing is maybe a little of judging the book by its cover by they way they look? The guy in the suit might be using one soap to wash everything and the man with the hat only uses the best of all products. Judging by looks means nothing and you have no idea by looking at these two examples how they act, what they believe in and if they are even worth talking about. Did you see how many times and what that man was arrested for? (just joking) Now, don’t take it too hard and I am not trying to say that what you have is good information. I think anything added to find the best possible target market is going to be a very big help. Thank you for sharing.

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