Consumer Segmentation Flaws

"Often what we buy is not some thing but some idea that is embodied by that thing." New York Times Magazine 7/26/09

It is this sentiment that has allowed companies like Target, Mrs. Meyers, Whole Foods, Apple and a myriad of others to flourish. It also to some degree what anchors my philosophy about consumers today.

We all know that the marketing landscape has changed but instead of talking about tweets and screens and changing business models of network TV, my marketing philosophy is generally driven by the consumer.

Consumers can no longer be defined solely by household income, gender or ethnicity. It’s not that demographics don’t matter it’s that demographics aren’t necessarily the best indicator of a consumer’s personal brand DNA. Consumer brand selection has become intensely personal and is a reflection of the consumer’s sensibilities. It’s their calling card. And consumers I find are less about their say, “blackness” and more about their “me-ness”. Let’s be honest, your race, ethnicity or religion might determine who you marry but it won’t determine what toothpaste you’re going to buy.

Marketing to me as an “African-American” is relatively useless. It's not because I'm not black... I am. It’s not that I’m not proud of my heritage or that I don’t acknowledge my blackness, it’s that you will make assumptions that I can guarantee will be wrong. Yes I listen to hip-hop but I also have Ani Difranco, Dave Matthews Band and the soundtrack to Oklahoma on my iPod (Did I really just admit that?). I’m a member of Yacht Club. I’m into mountain biking and tuned European cars. Connect with me through my lifestyle driven affinity groups, not through my ethnicity.

Take my friend Darin. Darin is a successful attorney, married with two little girls. He’s also a large black guy. Most companies would approach Darin based on his ethnicity, I mean after all, he went to an HBCU but do you know the way to Darin’s heart? Internal combustible engines. Mostly European ones. The guy tracks his Ducati a few times a year and drives a Turner Motorsports tuned BMW 540i. For his birthday one year his wife bought him a shifter kart. This doesn't solely define him but it's guaranteed the best way to get his attention.

Or take Audrey (pictured on my web site). She’s 26, pink and bleach blond hair, heavily tattooed, pierced and listens to hardcore rock music that is likely to make most people cringe. She’s also a stylist with a Roth IRA and is close to opening her own salon… Wouldn’t she be an ideal customer for American Express Open? You wouldn’t know unless you got to know her.

Not too long ago I was approached by the agency for New Era the baseball hat and apparel company. They said that there was a flaw in their segmentation of customers and wanted help understanding what it was and perhaps a better way to segment their customers. They segmented them by “Urban”, “Suburban” and “Fan”. The flaw was simple. You could reside in suburbia, have urban sensibilities and be a fan. Furthermore it didn’t really tell you anything about their customers. We designed a segmentation based on how people wore their hats. The initial breakdown was as follows:

· fabric (cotton vs. wool vs mesh)

· style (flat brim, curved brim, front/back)

· colorway (one color, multi color, custom)

· team/non-team

From here, New Era is able to gain tremendous insight into their consumers and identify what various sub-cultures and affinity groups they belong to and how to better help retailers market products and adjust inventory.

Furthermore, as racial lines blur and intermarriage grows it will ultimately be harder and harder to bucket people into strict ethnic or racial confines. Having a solid understanding of your brand and the types of consumers it appeals to is critical.