When was the last time you researched customer segmentation for your business? When was the last time you mapped your customer’s decision journey?
If your business is like most others, you probably studied how customers interact on the web and in the real world some years ago. But, have you observed how customers use mobile, apps, blogs, and social networks to grok how they find you and how they decide for or against you? Believe it or not, there’s a stark difference in behavior between the online customers we know and the connected customers of today.
With the onslaught of disruptive technology, consumer behavior and ultimately decision-making is changing. As a result, specialized research is now necessary to reveal to what extent your connected customers are redefining a new landscape for engagement and where their preferred touchpoints emerge. Whether it’s in mobile apps, social networks, or in the digital conversations defining the social web, how consumers discover, influence and are influenced is evolving in real-time.
There is a coming “C” change in consumerism where the “C” represents the more connected, agile, and discerning customer as well as the need for an adaptive culture in your erning customer as well as the need for an adaptive culture in your organization. I refer to this converging class of connected consumers as Generation-C, in my new book, What’s the Future of Business.
And not only is a new breed of consumerism taking shape, the customers and popular culture you once knew and modeled your business around are simultaneously decreasing in size and impact.
Age Ain’t Nothing But a Number: Segmenting Connected Customers
It’s a horrible thing to consider, but we have to start thinking about the implications of generation shifts in business. Older generations of customers will not be your customer forever. Your markets will give way to younger generations of customers who may or may not know about or connect with your organization in the same ways as other customer relationships you’ve developed over the years.
So what affect will Millennials and Generation Z behind them have on your markets. And, to what extent is their behavior different than the generations before them? The non-profit sector is already giving us an idea. And if we can connect what charity activity with everyday consumerism, we might find new ways to market, sell, and serve in commercial markets.
In The Next Generation of American Giving, a study published by non-profit technology provider Covio, researchers found that younger generations are already loyal to less charities than their predecessors.
Although the amount of giving goes up with age, Millennials are loyal to a smaller group of organizations. The study found that Matures give on average $1,066 annually to 6.3 charities, Boomers give $901 to 5.2 charities, Gen X’ers donate $796 to 4.2 charities and Millennials give $341 to 3.6 charities. Perhaps we can also take this to mean that younger generations will be loyal to fewer brands than that of their predecessors.
The amount donated and the quantity of charities younger generations support is only part of the story. How organizations reach the Millennial vs. Gen X vs. Boomers or Matures represents the segmentation that’s necessary for a new genre of focused customer engagement.
At a high level, the study found that Matures and Boomers respond well to direct mail whereas Millennials do not. On the contrary, online engagement proves far more effective for Millennials, including social networks such as Facebook, Twitter, and social media overall.
The Coming C-Change in Customer Relationships
In the non-profit world, organizations need to embrace no less than 11 separate channel strategies to reach all demographic segments, each with a unique supporting network and value proposition to appeal to different people uniquely.
As the study found, Facebook, Twitter and other social networks are reproducing a similar effect to real world conversations and awareness. A donor, for example, might learn of a cause, or be motivated to support a cause, because of a friend’s post on their Facebook wall. From there, they may donate online or send a check. But, awareness and ultimately a decision were sparked within a new medium where a link facilitated an action and transaction. It’s interesting to note that in the study, 50% of Matures and 30% of Boomers report using Facebook regularly.
What does this mean?
It means that how you think about consumers and how your business is designed to attract and nurture relationships with them requires an updated and segmented approach. Each must be designed with tailored messages and engagement strategies to reach your designed segments as inspired by behavior and preference. Engagement is just the first part. Equally important, your supporting channels must make the desired actions and transactions seamless…their way.
The End of Bureaucracy and the Rise of Adhocracy
The Convio study found that in most non-profit organizations, direct mail, online fundraising, web strategy, social marketing, and email communications are managed in separate departments.
While some or all functions may report up to the same leader, each are run with dedicated goals and in many cases are in direct competition with one another. Naturally silos arise for political reasons causing strife, preventing alignment, and preventing efficiencies in processes and overall strategies. The report drops a bombshell, that suggests businesses may perish at their own hands, “While these outcomes may have reduced internal strife, this approach is fatal to effective multichannel marketing.”
To active new touchpoints first requires the recognition that they exist and how they’re used. The next step is to follow a series of important steps to enlighten leaders and bring the organization together to bring about the next chapter of business and relevance.
1. The first step is to survey the customer landscape to learn about how the coming “C” change is affecting your business and current channel strategy.
2. Review the findings from the customer segment and behavioral analysis to document important findings.
3. Organize a steering committee or group with representatives from each channel, function, and/or line of business to present the research to the broader team and have it cascade from there.
4. The group must be empowered to lead incremental transformation. It must meet regularly, impartially, to analyze opportunities and best adapt to them without jeopardizing current initiatives.
5. Continue to research and monitor consumer behavior and preferences.