The simple purpose of market segmentation is to discover meaningful differences among a target audience. By segmenting the audience, we set out to better understand customers so that we can address them more precisely and persuasively. In the best cases, segments will differ in significant ways that, when addressed with new products or marketing programs, will provide a competitive advantage.
Unfortunately, most efforts at segmenting markets net vague categories cut up into artificial statistical markers. You could spend a lifetime creating market segmentation studies, but you will never, ever hear a female consumer describe herself as “a postmenopausal empty-nester.” Yet that’s exactly how many sophisticated consumer marketers describe her. What’s missing is the crucial emotional connection.
Cutting up consumer groups into smaller and smaller pieces may make them easier to swallow, but segmentation for segmentation’s sake accomplishes very little. Far too often, however, that’s exactly what we see.
That’s not to say segmentation isn’t powerful when it focuses on what really matters. There are more than 19,000 ways to order a beverage at Starbucks. This has helped Starbucks turn coffee—a commodity, mind you—into a brand so well embraced that its shops have become destinations for millions of consumers. Starbucks understands one way to succeed is to meet incredibly complex and constantly changing consumer desires by offering coffee and tea in whatever size, shape, configuration, flavor, variation, or aberration the consumer wants at that particular moment. That’s a lot of segmentation. But what really matters is that all 19,000 versions come with a smile and meet the needs of one very large segment, widely known as “satisfied customers.”
Of course, there are unlimited ways to slice up customers. For example, some people prefer laptops, and others prefer desktop computers, and these two groups can be segmented by demographics, attitudes, experience, work needs, media habits—you name it. These data may be interesting and useful, but they won’t be meaningful in creating brand preference when consumers feel most brands fulfill the same set of rational needs. This causes consumers to resort to choosing products from a wider range of acceptable brands based on marginally discernable features such as speed and memory. These are obvious and widely known features that fail to offer any brand a point of sustainable competitive advantage. When this happens, the market quickly becomes commoditized, and margins collapse, just as we see in the current computer market. But when a brand succeeds in looking beyond segmentation and isolating emotional drivers for buying decisions, it can leverage these insights in ways its competitors won’t understand. Apple comes to mind.
Nonetheless, segmentation has devolved into one of marketing’s greatest distractions. In fact, the obsession with segmentation causes many companies to spend excessive time and money trying to find new customers when they can’t profile their best customers. If you aren’t sure who your best customers are, how can you expect to find new ones just like them?
Clayton M. Christensen, the Harvard professor who coined the concept of the Innovator’s Dilemma, tells us, “Customer segmentation (or categorization) should be based on the notion that customers ‘hire’ products to do specific jobs.” He declares this is how consumers live their lives, and marketers who connect to this behavior have a much greater chance of success: “Instead of focusing on product attributes and on market size data, companies must learn what jobs customers want to perform with potential products and use this as their marketing guidepost.”1
The case for Emotional Research
A methodology called Emotional Research, a psychoanalytic-based technique designed to uncover emotional responses to brands, supports Christensen’s point overwhelmingly. In many emotional studies, we find consumers relate strongly and emotionally to products that help them meet their implicit emotional needs. As Christensen suggests, it is the marketer’s job to discover these needs, whatever they may be, and not to settle for artificial categories created by data dumps and statistical indications that don’t reflect true customer insights.
Segmentation efforts fall short for two very simple reasons. The first reveals just how lacking most research techniques are in uncovering the real reasons people do things. Endless attitudinal statements, with scales for “agree” and “disagree,” have severe limits. Most conventional research, by necessity, consists of predetermined questions and parameters that force research subjects into narrow channels of response. And the very nature of posing a direct question immediately primes the respondent to seek the “right” answer. From this perspective, it is almost impossible to uncover what may really be driving his behavior.
Second, the very nature of segmentation forces marketers to portion the market in some way or another. Otherwise, they wouldn’t be called segments, would they? So, at the outset, market researchers are determined to find differences, and they do, even if they have to invent them.
Emotional Research routinely reveals customers are more alike than different at the source of their behavior: how a product or brand makes them feel. It measures emotional responses to the entire experience of being a customer or prospect for a particular brand, product, or service, not just product attributes. It provides a clear view of categories of emotions based on the psychological needs and barriers driving customer feelings and thoughts which cannot be discovered with standard research methods. Emotional Research produces insights and understandings that can be more predictive of future behavior than demographic, attitudinal or psychographic data. And Emotional Research certainly reveals the “job” customers want a product or service to do.
Using Emotional Research, we can explore how emotions invoke behaviors that make up the landscape of all our psychological experiences. Revealing these emotional responses, common to most people, provides the insights into what a brand must say and do to succeed.
As a result, we’re confirming that brands are about feelings, not facts based on consumer segments. Buying decisions are made on promises that transcend products, and promises are rooted in human emotions. Quite simply, brands are built on trust. Making and keeping promises builds trust, which is among the most basic of human emotions. To affect our company’s bottom line, we need to get in touch with our customers’ emotions. Because how your customers feel about your brand isn’t a casual question. It is the crucial question.
Daryl Travis is CEO of Brandtrust, a Chicago-based marketing services provider, and author of “Emotional Branding: How Successful Brands Gain the Irrational Edge.”