Segmentation allows you to place your audience into neat categories.
But with the seismic shifts in consumer behaviors and attitudes we’ve witnessed lately, the lines that defined these categories have blurred.
The once predictable segmentations businesses banked on to inform their brand, product and marketing strategies, may no longer be relevant.
Instead, we’re asking: why do businesses need to rethink their segmentations in the wake of the coronavirus outbreak?
Using our waves of coronavirus research to inform our thinking, here’s what we know.
The business benefits of segmentation
The reasons for using up-to-date segments remain the same as pre-outbreak. Only now with such sudden and dramatic changes to the daily lives of consumers, they carry more weight.
Segmenting your audience allows you to:
1. Attract and retain the right customers.
Segmented audience data ultimately helps you market your solutions to the people who might want them. That means better targeting, and less wasted spend when budgets are tight.
2. Create a focused brand and product offering.
With segmented groups, you can adapt your messaging to the audience segment, offering benefits-driven messages that reflect their needs.
3. Create more targeted brands and products.
Presenting ads to those who won’t engage has proven to have a negative impact on brand affinity. So it’s not just about reaching the right people, it’s about avoiding the wrong ones.
4. Reveal new opportunities:
With change comes new horizons, and with the state of play shifting faster than ever, it’s important to keep up with your audience, because they’re the key to unlocking a competitive advantage.
The risks of relying on outdated segments
As with the benefits, the risks become more pronounced when markets are unsteady. Segments aren’t just ‘nice to have’ anymore, they’re required to avoid pitfalls, and inform strategic decision-making.
- The consequences of miss-messaging are heightened. It pays to be sensitive to consumer preferences now. With the amount of civil and social unrest we’ve seen lately, consumers are hyper-sensitive to inappropriate or miss-targeted messaging.
- Inaccurate forecasting. Relying on inaccurate segments undermines sales forecasts and targets, leading to further problems down the line.
- Leaving yourself open to smarter rivals. With many businesses looking to identify lucrative segments, the ones that know how and where to reach them best will thrive.
Proof that attitudes have shifted, globally
It’s easy to suggest that attitudes and behaviors have changed, but it carries more weight when it’s grounded in solid research.
Using our fifth wave of research collected during the outbreak, let’s focus on one of the most impactful psychological shifts we’ve seen, which itself had huge knock-on effects across multiple sectors: attitudes towards risk.
Consumers are concerned about a number of personal, social, financial and economic factors brought on by the outbreak, which has in turn affected their attitudes towards risk.
Across the 18 countries surveyed, two-thirds of consumers are extremely, very, or quite concerned about a second wave of the pandemic.
We expect this to greatly influence behaviors and attitudes throughout 2020, leading to a safety-first mindset.
What does this mean for brands? A safety-first mindset doesn’t just involve avoiding coronavirus transmission, it massively influences purchasing habits, and wider commercial behaviors at a category level, for example:
- Health: Consumers are more conscious about their own physical and mental wellbeing.
- Food and drink: How they choose and purchase from brands, retailers and restaurants has shifted.
- Travel: Restrictions on flights, coupled with the fear of health risks of travel has led to a huge drop off in travel for business and leisure.
- Big ticket purchases: Financial and economic insecurity means delays to pricey purchases.
Just looking at the last in that list, already we’ve seen high proportions of consumers are putting off buying expensive goods (80%) such as cars (21%) and luxury items (26%). It is likely that consumers see high ticket purchases as an unnecessary risk to personal finance security.
For businesses that haven’t been directly impacted by the outbreak, there are still developments in consumer rational happening on a fundamental level. So it’s important to acknowledge these global shifts, then look towards your own audience to try and understand how these may directly impact your business.
Psychographics in action: mothers during a crisis
Psychographics provide you with the all-important thought processes that drive commercial behavior, and as demonstrated above, global attitudes and sentiments have altered.
Now let’s take a more niche example, zeroing in one category – grocery shopping – and one of its core audiences: mothers.
A direct-to-consumer grocery brand is wanting to get to grips with how mothers are responding to the crisis. Specifically, they want to uncover the factors that might influence a mother’s decision to buy certain food products, how they’re purchasing them, and where best to promote content.
Looking at mothers’ unique reactions to the pandemic, here are some key findings from our latest waves of coronavirus research:
- 45% say corporate sustainability has become a lot more important to them during the outbreak, ahead of reducing their personal use of single-use plastic (40%) and reducing their carbon footprint (42%).
- 70% feel it’s important for companies to behave more responsibly.
- 37% believe the outbreak will have a big or dramatic impact on their personal finances.
- 51% say they’ll shop online more frequently.
- 51% they spend more time cooking, and 27% say they intend to continue.
These five top-level insights alone shed light on how the food brand can pivot its offering to strengthen relationships with existing customers, as well as how and where to attract new ones.
Being social and environmentally responsible is something the brand should look to prioritize and leverage in its messaging. If personal finances are a concern for mothers, offering sign-up/loyalty promotions and discounts via their favourite online shopping site could improve uptake and retention.
Layering accurate, up-to-date psychographic data into your segments can help you develop a brand that mirrors your audience’s new sentiments, with an offering that adds value in the here-and-now.
Keep your segments agile and strategy versatile
In times of uncertainty, a modern segmentation should be a lighter touch. It needs to be:
- Agile: Can support multiple business objectives and can be deployed quickly
- Adaptable: Can be added to, adjusted and refreshed when required.
- Insightful: Both on local and global scales.
An effective segmentation sets you up for success – especially if your goal is to build a brand that meets today’s consumer requirements and connects on a deeper level.
Your target segments and the markets they live in are constantly changing, so it pays to keep your finger on the pulse.
With refreshed segments and the renewed perspective it offers, brands can push forward with greater confidence, guided by the insights that paint a clearer picture of the new consumer landscape.
When it comes down to it, the more agile your segments and the strategy that accompanies it, the more stable your ROI.