The perils of generational segmentation

Millennials are tech-savvy, entitled and lazy. Gen X are cynical and hard-working. And Boomers are out of sync with technology, set in their ways and itching to retire.

Right? How often do we hear these stereotypes bandied around, as if it’s totally logical that an entire generation of people – living in different places, working in different jobs, with different past times – would act the same way.

The problem with demographic or generational segmentation in market research is just that – in many cases, age is just about all that two people have in common.

“A segment of the market is not a group that share similar demographics. A segment of the market is a group of consumers who think, behave or respond in a similar fashion.” – Professor Mark Ritson

If you give the data you hold on your customers more than a cursory glance, you’ll likely find that the way they interact with your brand has little to do with their age and a lot to do with their inherent preferences, lifestyles and opinions.

By all means, demographic segmentation is better than no customer segmentation at all. But such a rudimentary grouping fails to take into account the psychographic drivers that shape the way customers behave.

It’s not easy, but it’s worth it

There is a reason why so many businesses segment their customers by demographic factors. It’s far easier to collect this data – in fact, businesses that transact with customers in an online environment will likely know the gender, age, and postcode of their customers without having to interact with them at all beyond the business transaction.

Psychographics, on the other hand, in many cases require primary research. While you may have data on the behavioural engagement of your customers – for example, how often they contact you; the size and type of purchases they make; the frequency from which they buy from you – you most likely don’t have information to hand on their attitude towards your brand, their satisfaction with your customer service or their intention to remain a customer in the future.

If you don’t have this additional layer of information, and don’t have the means or the budget to get it – don’t fret.

Sending a 50 year old that doesn’t intend to retire information about retirement is less likely to cause them to disengage than failing to communicate with them at all. But you need to recognise that in order to develop deep, long-lasting relationships with your customers, you have to meet them where they’re at – and that means truly understanding what makes them tick, and why.

If you’re thinking about segmenting your customer base, demographics are a good starting point. But if you stop there, you may end up perpetuating a bunch of stereotypes that don’t represent the bulk of the market you’re talking to.

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