Archive for January, 2021

Instead of segmentation, try inclusion – it will get you more sales.

Tuesday, January 5th, 2021

For years the marketing industry has been busy segmenting.  For a couple of decades it has been common best practice to segment customers into types of people to target everyone else who falls into the same segmentation.

These are often expensive exercises and can take months to complete.  They may be of huge use to the brand, although all too frequently they are conducted in isolation of media and therefore channel intelligence has to be merged on separately after the first party analysis, and digital behaviour cues now often are better signals of intent to purchase.

The naming of the segments seems to be crucial too and often involves alliteration.  There might be a “Savvy Sally”, an “Apathetic Annie” or a “Careless Katie”.

Segmentation like this has been challenged.  Firstly the Ehrenberg Bass institute advice is not to segment your audience.  So from “Hungry Henry”s and “Thirsty Theo”s some brands have instead moved to target for example “Anyone with a mouth”.

The Ehrenberg Bass Institute’s Professor Rachel Kennedy and Dr. Rachel Beal state that targeting should prioritise the buyers a brand hasn’t reached before.

Contrary to the view that marketers should target likely buyers by segment the EB Institute has found that brand share bears very little relationship to the segments that brands may try to appeal to. Instead, Beal said, “we really see it as a size game”.

“As brands grow they bring new people into their brand who have not bought from them in the past. This has really important implications for your priorities as to who you need to target,” Prof. Kennedy states.

“If you’re using targeting to get to people you haven’t got to in the past, fantastic. If you’re targeting at scale, the evidence supports that.” She continued: “If you’re using targeting in any way that’s limiting who you’re talking to … you are limiting your potential for growth.”

A second challenge is that these segmentations don’t take into account how the audience self-defines in terms of profile.  This information is available in the UK in terms of diversity profiles.  It is not uncommon for brands to be unaware of how they profile with different communities and therefore to not know if they are resonating or not even if they are being reached by advertising.

There is plenty of data about diverse audiences in Britain, and whether or not they buy a brand.  MediaCom analysis, spearheaded by Claire McAlpine and John Beardsworth, has discovered significant growth opportunities where a brand is not resonating with a minority ethnic community for example.  Or where they are underserving disabled people or LGBTQ+.

These opportunities can be worth millions in some cases, in terms of potential sales.

Sometimes the opportunity here may be because the advertising doesn’t include representative images of modern Britain.  This in turn may be because the creative team behind the advertising doesn’t do that either (a recent composite of UK creative directors images looks uncannily like Danny Dyer).   There is a long way to go in terms of change in this respect.  That’s why Project ADA – the Advertising Diversity Analysis tool that is piloting in Q1 of 2021 is so crucial.  That is also why we have detailed how to create a more diverse and inclusive working environment in our new book Belonging, the key to transforming and maintain diversity, inclusion and equality at work.  Creative chief Vicki Maguire is quoted on her previous experience of working in agencies saying: “Every day the battle came out of the blue, usually a battle against white masculine privilege”.

Resonance with diverse groups goes beyond who is depicted in advertising to how the campaign is built, what advice is taken at early stages of the work, and who the senior decision making team includes.  It may be that a partnership with a team of experts, for example at Scope the pan-disability charity, is crucial to ensure that the campaign really resonates with everyone who can be attracted to the brand.

First be inclusive.  For brand growth it is far more crucial than traditional segmentation.  Make 2021 the year where the strategy is to include everyone.