Identifying the Preferences and Priorities of Your Target Market Segments
Financial services marketing professionals are constantly seeking ways to identify and refine appropriate target market segments for their offerings. Their ongoing goal is to narrow the focus of product/service marketing efforts to the most receptive groups in order to reduce costs and increase positive response rates.
Database marketing has played an important role in systemizing the segmentation process and introducing a higher degree of science to the art of marketing. Database marketing may not, however, be applicable or available in all cases. There is another highly effective segmentation approach that can help marketers focus marketing resources where they will achieve greater returns, with or without database support.
Birds of a Feather
Early in the last century, social scientists created the concept of “cohorts” or groups of people born in a particular period of time and bound together by shared experiences and historical events. The premise is that people shaped by a particular series of influences share a common value system. As a result, members of different generations react very differently to the same stimulus.
Influences that shape generational perspectives and behavior can arise from many elements or events—e.g., cultural, economic, technological or political. Every generation has comparable rites of passage as they pass through a given life cycle. However, the events that distinguish those formative experiences change from generation to generation and create the basis for a set of associations and responses that help shape common generational values. The chart below cites a number of formative year influences for major generational groups.
Examples of Generational Influences
(born before 1943)
|Event||Civil Rights||Vietnam||9/11||Global Warming|
|Fast Food||Automat||Drive-In||McDonalds||Red Bull/Power Bars|
|Sports||Babe Ruth||Muhammad Ali||Michael Jordan||Tiger Woods|
|Night Talk||Jack Parr||Johnny Carson||Dave or Jay||Stewart/Colbert|
|Media||Radio||Network TV||Cable TV||Internet|
|Comedy||Bob Hope||Lucy||Seinfeld||Adam Sandler|
|For Kids||Howdy Doody||Sesame Street||Mr. Rodgers||Barney|
|Movies||Gone With the Wind||Godfather||Animal House||High School Musical|
|Fads||Pogo Stick||Hula Hoop||Cabbage Patch||Pokémon|
|TV||Ed Sullivan||MASH||Dallas||Reality TV|
|Glamour||Betty Grable||Marilyn Monroe||Farah Fawcett||Paris Hilton|
|Heart Throbs||Clark Gable||Paul Newman||George Clooney||Justin Timberlake|
|Hosts||Arthur Godfrey||Dick Clark||Oprah||Ryan Seacrest|
While financial marketers should consider the compelling generational orientation of their target markets when refining messaging and value propositions, they should also be aware of the potential pitfalls. The most common mistake is an over-reliance on demographic profiling, a process that ignores the strong values of generational cohorts. For example, many demographic studies assume that people entering a certain age group will display the same preferences and behaviors as those who preceded them. Savvy marketers, however, recognize that, even though the priorities of Baby Boomers will change as they reach their sixties, they will not mimic the behavior of the last generation of retirees.
Smart financial marketers also realize that they have their own particular generational perspectives that must be put aside if they are to make sound decisions regarding marketing strategies or product/service development for another generational cohort. While it is extremely difficult for marketers to remove personal values from these types of judgments, it is critical if they are to develop effective marketing initiatives. It often means the difference between connecting with the target market and misjudging it entirely.
The Bottom Line
Good marketing is about satisfying the needs and wants of target markets. Generational cohorts can provide marketers with unique insights into to the biases, priorities and preferences of market segments. The resulting information can inform the decision-making process and help marketers develop targeted campaigns that will resonate with their target markets.