SEGMENTATION

Humanize Customers to Imbue Your Brand with Trust

The path to building brand trust follows an unexpected sequence. Rather than starting with your brand's voice or market position, begin by walking in your customers' shoes. Study their hopes, dreams, fears, and priorities until these human characteristics become vivid and real. This deep understanding then becomes the natural foundation from which your positioning, offering, and messaging can authentically emerge. The work of discovering these things about your customers is called segmentation.

PITFALLS OF DEMOGRAPHICS
Segmentation is how we reveal and better understand the distinct preferences, needs, and behaviors that exist in a larger population. But most of what we know about segmentation comes from demographic and geographic methods, which illuminate differences in income, age, gender, zip codes, etc. This data, which is straightforward and easily quantifiable, reduces people to marketing targets. It dehumanizes people for the benefit of marketers who prefer working with concrete, easily measurable variables. And if we reduce people to nothing more than a pile of data, we never build trust with them, because the clues that inform relationship-building are absent from our models. Demographics are useful for many aspects of marketing, but they are also inherently risky for brands.

BRING CUSTOMERS TO LIFE AND ENGENDER TRUST

Another form of segmentation--referred to as psychographic or mindset segmentation--illuminates customers' psychological attributes, values, and emotional needs. While it takes more effort to elucidate people's emotional needs through empirical segmentation methods, the results can be incredibly fruitful in terms of revenue, brand equity, sustained customer affinity, and word-of-mouth advertising.

Psychographics generate highly personalized and emotionally resonant marketing strategies because they enable intuitive decision-making. Understanding customers' hopes and fears creates a foundation for trust (Simpson, 2007). When brands know customers' deepest fears, they can avoid trust-damaging missteps, while understanding aspirations allows them to strengthen relationships.

Additionally, psychographic segmentation catalyzes trust throughout an organization in three key ways:

• It creates a shared understanding of customers' hopes, fears, and preferences across all levels of an organization. This shared vision helps ensure that all teams - from design to marketing to production - are working toward the same customer-focused goals, rather than making decisions based on personal preferences or disconnected demographic data.

• Psychographic personas transform data into actionable insights that resonate emotionally with employees. By humanizing customers' needs, fears, and hopes, employees in different functional areas can anticipate how customers would react to changes in real-life scenarios. These personas enable employees to empathize with and truly understand customer needs--leading to effective product and service design.

• These personas naturally bridge cultural and departmental divides within global organizations. Focusing on common values and attitudes through psychographic segmentation can transcend cultural boundaries. This shared psychological understanding facilitates trust and alignment across diverse teams and markets.

By developing this deeper understanding of customers' personal motivations, marketing teams can better empathize with their audience and anticipate their reactions, ultimately building stronger, more trustworthy relationships in an increasingly data-driven world. Inside organizations, alignment around lifelike customer personas creates a transparency that is intrinsically motivating for employee problem-solving and spontaneous collaboration.

A CLASSIC EXAMPLE FROM NETFLIX VS BLOCKBUSTER

In 1997, Netflix launched its movie business that enabled people to order movies (DVDs) by mail. Blockbuster was a familiar brick-and-mortar retail operation with over 9,000 locations globally in 2004. But this incredibly successful business had a problem. Over 16% of its annual revenue, totaling $800 million in 2000, was from late fees. While people could return videos freely in the drop-off bins, paying for late fees required standing in line.

Invariably, this line was full of moms with kids in soccer cleats and shin guards growing late for practice by the minute. The last thing a soccer mom wants to do is stand in line to pay a fee for a video. So when Netflix ran an ad campaign in 2005 called "The End of Late Fees," it spoke directly to Blockbuster customers' deepest pain point--a mom's precious resource of time.

In 2008, profit at Blockbuster was down 28%, and in 2010, the company filed for bankruptcy protection.

MOTIVATION IS ESSENTIAL INFORMATION FOR BRANDS

The contrast between demographics and psychographics illuminates a fundamental truth about customer relationships. While demographics tell us what customers do, psychographics reveal why they make those choices. As the Netflix vs. Blockbuster example illustrates, understanding why customers make decisions is far more powerful and important than simply knowing what they do. When you truly understand what matters to your audience, you can position your brand, services, and even messaging to connect with them in a way that transcends competition and builds lasting relationships.