DEMOGRAPHICS ARE DEAD!

Ditch your old school customer segmentation research – it’s no longer fit for purpose!

MYTH: 

Gender, age and postcode are critical data points to help you understand what your consumers need.

MY LEARNING: 

Basic human needs and desires don’t change much over time and actually EVERYONE'S THE SAME!

Did that catch your attention? Great…let me share with you some stuff that really excites me and helps me strive to look at customers differently to they way we used to. 

I recently attended TrendWatching's 2015 Sydney Trend Seminar and yet again, I am hearing about old school marketing techniques that could be a critical route cause of businesses not remaining relevant to consumers.  TrendWatching (TW) was one of those events you need to make time to get to when you hit solid internal barriers & question if you are nuts, as it helps you rediscover that you are actually perfectly sane!

HBS Professor Clayton Christensen notes that conventional marketing techniques teach us to frame customers by attributes, using age ranges, race, marital status, and other categories that ultimately create products and entire categories too focused on what companies want to sell, rather than on what customers actually need.

From this insight, Christensen created his “Jobs to be done” model to help businesses see why consumers hire their products, in order to better understand they needs, desires and pain-points with current market solutions.

TW last week also believe there is a new way of viewing people.  TW noted that traditional market research is inherently backward looking because it is based on data about what consumers were doing and saying yesterday.  They also note that it is typically bound by what consumers themselves are able to articulate about their wants, needs and behavior.

TW reframe the definition of a Consumer Trends as:

“A new manifestation among consumers – in behaviour, attitude, or expectation – of a fundamental human need, want or desire.”

“Trends emerge when external change unlocks new ways to serve age-old human needs and desires.”

We are living in a world where life is fluid.  Too fluid for old school consumer need capturing tools as they cannot keep up with the rate of change.

TW research is unveiling a new “now”, an era of Post-Demographic Consumerism. With aspiration becoming increasingly globalised and age-agnostic, demographic segments are becoming less meaningful predictors of consumption patterns.

 

“POST-DEMOGRAPHIC CONSUMERISM | People – of all ages and in all markets – are constructing their own identities more freely than ever. As a result, consumption patterns are no longer defined by ‘traditional’ demographic segments such as age, gender, location, income, family status and more.”

 

What at the drivers of change?

I took away 4 key drivers of fluidity that are leading to the increase pace at which people’s lives change.

1.  ACCESS

Digital platforms have smashed the barriers of geography and we now see, hear and consume things across geographic boarders as they happen.  As a result behavioral change spreads quicker than ever before.

2.  PERMISSION   

Behave, as you like......well within reason!  But it is true.  Social acceptance of people being who they want to be is being embraced more and more.  No longer do you have to do things, wear things, or even marry people, the way social communities expected you to 60 years ago.

3.  ABILITY        

The rise of the Uber Driver is here and now.  The ease at which we can live our lives the way we want to is growing.  Live to work, or work to live?  Why should we go to work Monday to Friday, 9-5 and restrict the time available for us to live our personal lives…how about I work at times that suit me?

4.  DESIRE           

We now crave and look for experiences, not material goods.  Status is now more defined by our networks and self-actualisation, rather than the number of bedrooms our houses have and what car you drive.

A recent CIM webinar, on Brand, delivered by Rose Bentley of Wolff Olins noted that we are in the brand era of “Effect” and she introduced the term “experience ecosystem” - how people, behave and respond as a sum of the experience and how they are a part of it.

So what now?

Well it’s simply how you chose to answer the question…. how can you THRIVE IN THE NEW NORMAL?

Apple recognised we are not all yellow and now enables us to send emojis that more closely match the colour of our skin, reflecting who we really are.

If Elton John can, why can my gaming character not?  Nintendo, driven by consumer sentiment, has created sword and spear-wielding warriors in the new installment of Nintendo's hit 'Fire Emblem' series who will be able to marry whomever they like.

Selfridges created Agender - a celebration of fashion without definition, exploring and examining shifting gender boundaries through groundbreaking fashion.

 

ADAPTION & EXPANSION IS THEREFORE THE REAL KEY FOR FUTURE GROWTH AND SUCCESS.

 

How can you take your product and service and expand it into a new customer segment that you previously thought would not want your offer?  How can you take an emerging trend and adopt and adopt it to create new value in/for your organisation?

“…BUT…my Brand is a legacy brand, I cannot possibly do any of that!”

I get so frustrated when I hear and see people/agencies, waving Brand guideline books around and creating a frenzy of activity,  senior managment emergency phone calls with the aim to wrap people up in Duck Tape and forbid them to think and create differently.  There often can be an overwhelming fear someone will destroy any possibility of global world peace, shockingly pick another pantone shade of x, lay a square where there has always has been a curve, which of course will lead to total consumer brand confusion resulting in the end of the company overnight.

Ok, a little tongue in cheek comment there but I am sure I am not the only one who has seen fear of change result in some peculiar internal behaviour, the words "off brand" uttered repeatedly until creative transformational thinking is forced back into traditional boundaries.  The funniest part is, those who should be pushing the organisation to break boundaries the most, are sometimes the biggest opportunity killers!

Virgin Management has a wonderful set of Brand Guidelines.  One of the first pages you open reveals a pie chart declaring their guidelines are 10% Rules and 90% Creative Freedom.   Richard is also captured on an internal Brand hype real saying, “The answer is YES………………….now what was the question?”…I guess this won’t really surprise you.  A brand focused on changing the game for good could not have done so and will not continue to do so, without an open license to take a risk in pursuit of their purpose.

Forward thinking brand leaders relish the ability to overturn brand history and heritage baggage and do today, what you couldn’t yesterday in order to remain as relevant and loved tomorrow as you were yesterday.

TW noted that perhaps the biggest opportunity presenting itself to large businesses is “Big Brand Redemption”.

Start-ups tend to be seen as more ethical and despite being around 2 minutes, consumers deem them more trustworthy than legacy brands.  Start-ups are seen as just better and have the advantage of having no brand history.  No brand history means no brand baggage.

Big brands on the other hand have BIG capabilities, large pools of resources and reach.  So what if so-called big brands are actually the answer?  What if big brands put as much effort into solving the problems they create or solve big issue affecting consumers, rather than just making money through their service/product offer?  What new possibly would lead from this new reality?

Some old school business leaders will say, why would I bother, we are simply here to make money as we are a commercial business.

Richard Brandson has an alternative opinion:

“If you are unsure about what your business purpose is, except perhaps to make money, it might be a good time to rethink your approach.  Companies that survive and thrive over the long term have more significant interactions with their customers than just conducting transactions.  Great businesses are places where problems are solved and lives are improved.”

 Ok, enough of theory, viewpoints and examples.  Simply watching trends is not enough.  Innovation is turning ideas into invoices, creating change that adds value…so what are you going to do? 

Here are some practical things you may like to think about in order to help you start to take action today: 

 

1. SEEK CLARITY ABOUT THE “NOW”

Take time to really see your customers in the now and not through the metrics of yesterday.

 

2. TARGET CHECK

Reassess whom your current and future customers are in the new reality of today.

 

3. TAKE OFF YOUR INDUSTRY BLINKERS

Who are you really up against?  Are you benchmarking against your competitors marketing and user design when the world is benchmarking your marketing against that of Red Bull and your user experience against that of Apple?  Time for a re-think?

 

4. LOOK THROUGH YOUR BRAND LENS

Use your Brand Lens to understand how you will purposefully address basic human needs and wants in an irresistible new way.

You may like to use TrendWatching’s Consumer Canvas & Strategyzer’s Value Proposition Canvas to help you.

 

5. FALL IN LOVE WITH THE CHALLENGE NOT THE IDEA

Let your customers guide you to the solution.  Dare to try and run cheap, quick experiments to validate or invalidate your value hypothesis before you leap to a solution and build a full business case.

 

6. FAIL, LAUGH, LEARN, SHARE AND TRY AGAIN!

Just because you don’t get it right first time does not mean you are not on the right path.  Focus on staying on the pathway of discovering long-term consumer value.  The pathway of short-term goal smashing may look like it yields more results and is more rewarding but it will only be a matter of time before you realise the path ends quite abruptly.

 

7. CELEBRATE THE LEARNING MILESTONES AND SMALL PROGRESS STEPS AS MUCH AS THE WINNING FORMULAS YOU LAUNCH.

Who said Innovation is easy…it takes courage and resilience but just because is not the easiest path, does not mean only a few can do it.  It is a skill that can be learned and you should take pride and pat yourselves on the back as your make steps towards learning what really matters and makes a difference to your customers and company's bottom line.

 

8. ENJOY THE RIDE, LIFE IS TOO SHORT, MAKE SURE WORK IS FUN!

 

Also published on my Personal blog. Please note that opinions expressed are mine and not those of my employer.

iStock imagery by PeopleImages, warchi & alexsl