Values vs. Demographics
I currently segment my customers using demographics. How will values give me better results?
Many companies segment their customer base using demographics. To demonstrate the inadequacy of that and other traditional approaches, let’s take a look at millennials. If you haven’t noticed, we seem to be inundated with articles, advice, seminars, videos, and blog posts all teaching us how to market to “Millennials,” the current darlings of the media and the marketing world. Seemingly the holy grail of marketers nowadays, Millennials are usually defined as the generation between anywhere from 18-37 years old, depending on who you ask. Because of the sheer number of millennials (about 40-70 million, again, depending on who you ask), and their presumed purchasing power over the next several years, they have become a prime target for many companies attempting to reduce this massive population segment to a single set of defining characteristics which can be leveraged to entice purchases out of them by speaking to their values, in their language.
We’ve heard many of the stereotypes from marketing departments: “Millennials are more socially conscious – let’s play up our sustainability efforts” or “Millennials are more casual – let’s show them how hip and laid back we are at our office.” All well and good, but there are several problems with these stereotypical approaches. One problem is that such efforts will likely fall flat if these tactics are not truly representative of the core values of the company. After all, aren’t millennials the generation that demands transparency, and will thus see through such hollow, manipulative attempts?
Cheekiness aside, a larger problem is that while millennials may be poised to be the customers of the future, almost all conversations around millennials seem to lump them into a single, homogenous group, tied together simply by their age and a presumed set of common values that are thought to differ from the values of previous generations. But reducing a population of several million people into a single set of values and life goals is bound to be inaccurate at best, and insulting at worst. Millennials, like any other generation, vary in personality, geography, life stage, and of course, values. Would a 32-year old female software engineer living in the Silicon Valley have the same values, goals, and life priorities as an 18-year old male retail clerk from the Midwest? Most likely not. But according to demographic segmentations they would likely both fall under the all-encompassing “Millennial” umbrella, and potentially courted in the same way by businesses and employers.
Another issue when attempting to pinpoint the values of any generation is that people vary not only in the core values they claim to represent, but often in their ideas about what certain values even represent. For example, millennials are often said to demand a sense of “purpose” from the companies they engage with, and from the purchases they make. Companies are jumping like wildfire onto the purpose-marketing bandwagon, however “purpose” is not really an actionable value in and of itself, but a general overriding life goal that applies to almost everyone. There are not many people out there who are not seeking some sort of purpose in their lives. But what is purposeful to a liberal, coastal resident (e.g. good working conditions for employees), for example, may not be what is purposeful to a conservative heartland dweller (e.g. Made in the U.S.A).
Values permeate the lifestyle and purchasing behavior of a given region and culture to a degree that extends far beyond what can be captured by generalized demographic labels such as millennials.
The fact is, millennials are simply human beings, and really no different from any other generation when it comes to making decisions based on their values. Labels such as “Millennials” are convenient, easily digestible, and make for clickable headlines. However, companies who rely solely on age-based categorizations are missing out on a fantastic opportunity to further refine their segmentation strategies, develop stronger relationships with customers and employees, and increase ROI for all of their marketing efforts.