The end of the year is approaching and if you are looking to update your business and/or marketing plan, now is the time to examine your target market and consider segmenting it into categories that can be used to inform your decision making.
Essentially, segmentation is grouping together similar characteristics or attributes of your clients. Understanding these attributes allows you to identify patterns of behaviour, attitudes and preferences, and therefore devise targeted products and services based on these.
One of the most common ways to segment an audience is via generational segmentation.
The generational segmentation categorisation method is not new; market researchers have been examining the characteristics of different generations for decades. So what are the generations and how are they categorised?
For most purposes, categorising generations who are in the workplace todays the best way to segment an audience. These categories are:
- The Silent Generation – born before 1946
- Baby Boomers – born between 1946 and 1964
- Gen X – born between 1965 and 1980
- Gen Y – often referred to as Millennials – born between 1981 and 2000
The assumption behind generational theories is that during each time period, or as a result of the previous period, significant events occurred, shaping the way each generation behave and act.
The Silent Generation were influenced by two world wars and the depression. Called ‘Silent’ because of a perceived lack of interest in raising issues or speaking publically for change, they were also cautious, conventional and somewhat fatalistic. Because of the depression and World War II, they were also smaller in number than the previous generation and the Baby Boomers after them.
Baby Boomers grew up in times of great social change and, to some extent, freedom. As a result, they are characterised as experimental, individualistic and social-cause oriented, which is why they are often attracted to associations, charities and not for profit organisations.
Gen X was the first generation of ‘latch-key’ kids – where both parents were likely to be in the workforce. They were also exposed to rising divorce rates and corporate ‘down-sizing’, which saw parents lose their jobs. Accordingly, they value their independence, are less loyal to employers, and favour a good work-life balance.
Millennials, or Gen Y, are the technology generation – the first to grow up with the internet and the age of instant communication. Consequently, they rely far less on the traditional methods of information dissemination – they have the internet at their fingertips and are more likely to question the ‘norms’ that have existed in business. They are also more aspirational and, unlike Gen X before them, are attracted to successful brands.
Segmenting your client and prospect base will allow you gather more information from them which enables you to:
- Devise products and services that appeal to each segment
- Understand the propensity for each segment to recommend your organisation to others
- Demonstrate to your clients that you understand their differing requirements
- Differentiate your business from competitors
If your organisation is to remain relevant into the future, you need to know what your clients value. Segmenting your client base is a good way to understand your client’s preferences, so you can develop relevant marketing strategies for success.