Consumer segmentation and social media?

This article in AdAge (US) gives a summary description of the social networking behaviour of some of the consumer groups used by Simmons Research (part of Experian). It is the first time that I have seen any attempt to overlay social networking behaviour onto lifestyle groups.

I particularly liked the definition of the “Smart Green” group.

They prefer to buy products in recycled packages and eschew products that pollute. They are average users of social networking, blogging and podcasting but slightly above average in message boards. They are older (50-plus) and are most likely to go online for health or financial information. And in the spirit of their eco-friendly attitude toward trees, they're 23% more likely to send electronic greeting cards.

Know anybody like that? Dick Stroud

Know your U-Boomers from your Uni-Bombers

A couple of consultants at McKinsey, as reported in Forbes, have come with the term U-Boomers.

The U's are the largest segment of the baby boomer generation, sandwiched between roughly 10 million well-to-do households with high hopes for a comfortable retirement and the financial resources to pay for it, and 11 million disadvantaged households that are deeply pessimistic about the future.

They are supposed to have share all the optimism and expectations of their wealthier counterparts but don’t have the bank accounts to live the high-life. As the US (and most of Europe’s) economies head south it is likely that a tranche of the U’s will be joining their disadvantaged and pessimistic compatriots.

McKinsey thinks the Us are a marketing opportunity. As Class 1 Boomers turn left at the door of the 747 their U-Boomer friends turn right. Answer – make the right of planes longer and shorten the left.

I am not sure how marketers will deal with these financially constrained Boomers but I am sure they will find a way. Dick Stroud

The Generation Y in us all

"The 21st-century consumer has all the characteristics of generation Y - these characteristics are evident in almost everyone". So saith Mark McCrindle in an article in today’s Sydney Morning Herald.

He believes that the prevailing mind-set in the future is that of generation Y. That’s a bold statement, especially since that means it applies to 60% of the Australia’s population.I reckon that he has a point. Dick Stroud

Paying back debt into retirement

We all instinctively know that it is daft talking about a ‘generation’, since any large group of people fragments into zillions of sub groups. If we want to justify an argument we can talk abut the 50-plus as a bunch of property rich people set on enjoying their retirement consuming their kid’s inheritance.

You then encounter the figures that were published this week by Scottish Widows in their 2007 UK Pensions Report.

Grandparents in debt to tune of £57 billion
1 in 5 retired homeowners (1.1 million) still have a mortgage
Average outstanding mortgage debt is £38,000
1 in 3 have carried over credit card or personal loan debt for the last 3 months
Average outstanding non mortgage debt is £5,900
1 in 12 retirees have financially dependent children

The study also shows that many of those aged 50 to 59 are a long way from owning their own home. 42% still have a mortgage with an average debt of £54,300.

So there you are. Not a very rosy picture for a large sway of the UK’s 50/60-plus.

So are your customers in the this group of the Charmed Generation, with lots of dosh? I hope you know.

A word about Scottish Widows. How encouraging to encounter a company that ensures it has a press release on its Web site when the news is breaking. This report was featured on the BBC news. Secondly, to encounter a PR department that responds to e-mails within 30 minutes (even at 8.00 in the morning). Well done. Dick Stroud

Not enough babies

This is the cover from this month’s Economist. Nice creative.

Here are few snippets from the main article. Sorry it is a subscription only magazine (well worth purchasing this copy or buying the audio download from The Economist web site.

Four out of nine people already live in countries in which the fertility rate has dipped below the replacement rate. Last year the United Nations said it thought the world's average fertility would fall below replacement by 2025.

Adjusting to population decline poses problems, which three areas of the world—central and Eastern Europe, from Germany to Russia; the northern Mediterranean; and parts of East Asia, including Japan and South Korea—are already facing.

State pensions systems face difficulties now, when there are four people of working age to each retired person. By 2030, Japan and Italy will have only two per retiree; by 2050, the ratio will be three to two.

An ageing, shrinking population poses problems in other, surprising ways. The Russian army has had to tighten up conscription because there are not enough young men around. In Japan, rural areas have borne the brunt of population decline, which is so bad that one village wants to give up and turn itself into an industrial-waste dump.

And so the article goes on with more and more jaw dropping facts and figures.

Most marketers think that demographics is boring (and they might have a point) but the implications of population change are absolutely fundamental to understanding how markets work. Dick Stroud

The link between market segmentation and Web analytics

This post is not limited to the 50-plus market but it sure will have a lot of applications to this age group.

comScore’s Segment Metrix is tool that links web analytics to consumer segmentation.

It provides marketers with the ability to track, analyze and report Internet activity by their most important consumer groups. In the fullness of time it will (so comScore claims) integrate behaviourally defined segments, geo-demographic segments, and proprietary, client defined segments with the comScore online panel.

The first segmentation model that has been released (and which is probably the easiest to do) allows marketers to analyze online activity by heavy, medium and light users of the Internet and of any category of sites reported by comScore.

The full details of the model are explained in this press release.

comScore uses the Travel Industry to make the point about the importance of understanding the segmentation of online traffic. It is a great example.

One might assume that ‘heavy’ travel category visitors are so-called “road warriors,” or frequent business travellers. However, when the behaviour of this group on non-travel sites is studied it reveals they are also heavy users of shipping (FedEx, UPS and USPS), office supplies (Staples and Office Depot), and entertainment planning (Ticketmaster and Citysearch) sites. This implies this group is most likely administrative assistants to the “road warriors” than the “road warriors” themselves.

You might say that this is common sense but it I doubt if many companies have thought through the implications of this fact. It will be interesting to know when comScore launch a segmentation model that helps understand the 50-plus’s online behaviour. Dick Stroud

Beware stereotyping

There is an article in the Telegraph about market segmentation from the viewpoint of a professor of psychology. It makes some good points and also illustrates a mega danger - stereotyping.

The author asks: why not segment by political values or religion or sexual orientation or any other variable that comes to mind. Good questions.

The answer is that you should BUT make sure these factors really influence consumer behaviour AND influence it in a way that is established by research not hunch.
I suspect (hope) that he was joking when he differentiated Old vs New Labour on the basis of their culinary tastes: “Remember, Old Labour like mushy peas, while New Labour eat guacamole”.

Unfortunately, too many marketers really think this way and allow their personal prejudices and opinions to drive their vision of consumers. Dick Stroud

Marketing Week article about the Charmed Generation

My latest article about the Charmed Generation is published in this week’s Marketing Week magazine. You can read a more detailed explanation of this generation in this article. Dick Stroud