Sit back for a moment, and have a think about your target market. How do you segment them? Chances are, you combine geographic, demographic, psychographic and behavioural considerations when assessing your target market. And chances are, you have viewed these categories through the lens of generation labels when you visualise that “person”.
TRADITIONAL MARKET SEGMENTATION
For a long time (and today still) marketers and business owners have been segmenting their audience by age. At the surface, this seems plausible. Surely we share more traits with people our age compared to the next generation?
The general theory that drives generational segmentation is that across each time period, certain events have taken place, which will have influenced the way each generation will behave or act.
In reality, marketers and business owners have long continued to use generation labels to define their target market because… it’s easy. In reality, battling the complexities of real human traits, emotions and behaviours, without reliance on generation labels, takes immense effort.
The Reality: Generation Labels Have Little Value
Incredibly, research has shown that lumping together age groups with the labels Baby Boomer, Gen X and Millennials is not a productive way to segment markets. In fact, it’s practically pointless.
A 2020 report by marketing research house BBH Labs determined that “generations” are no more than a random collection of people who share no innate similarities beyond being born within the same period.
If that comes to you as a shock, we don’t blame you.
But when we take a closer look, it makes sense. Millennials span roughly 1980 to 1996. Gen Z spans roughly 1997 to 2013. Can we honestly expect each distinct generation of individuals, some born 15-20 years apart, to share the same distinct, defining characteristics?
The report used what they called a “Group Cohesion Score” to assess the likemindedness (or lack thereof) between a group of people.
It was found that, in its entirety, the UK’s Group Cohesion Score was 48.7 per cent. This meant the average majority opinion was held by 48.7 per cent of the population.
Astoundingly, it was found that generations have a Group Cohesion Score of +1.3, making them only marginally more like-minded than the UK as a whole.
For Gen Z, this fell to +0.2. This means they have no greater connection to each other than the rest of their country.
UNDERSTANDING CONSUMER BEHAVIOUR
The data is clear. Our habits, temperament and passions are what bring us together. Whether or not we were born within 20 years of each other no longer holds value when it comes to defining groups of people.
It’s incredibly exciting that more and more marketers are seeing the value in targeting consumers by temperament, rather than age.