Showing posts with label segmentation. Show all posts
Showing posts with label segmentation. Show all posts

Friday, 14 January 2011

In search of the ‘real’ digital native

We live in a digital world, but are we natives or immigrants?

In the summer I wrote a blog post about Digital Natives and Digital Immigrants, explaining the theory and outlining some of the commonly held opinions and assumptions. Since then, I have performed primary research in the field and can now share some of my findings.

The intended outcome for the study was to discover the differences in generational use of digital technology, with the premise that the generation born before 1980 found it harder to adapt to new technology and therefore used it in less abundance.

To sum up all the questions asked by the study in one blog post is difficult, so I will concentrate on the main three:
1. Are the generational groupings correct and a valid demographic segmentation for marketers to use?
2. Are immigrants being undervalued by some businesses?
3. What is the role of attitude?

The findings
The research revealed ‘natives’ to be more active than ‘immigrants’ in a wide range of digital uses.

The ‘neo’ natives, those born after 1990, showed a wider range and more frequent use of digital media than the natives. With this in mind, the fundamental tenant of Prensky's theory appears to be correct.

Based purely on these facts, segmenting a market by digital domicile would appear to make sense to marketers.

Marketers must not, however, make the mistake of disregarding online marketing when targeting the immigrant generation.

The results showed that around 70% of immigrants use a range of digital technologies four times a week or more - not as often as the generations that follow them, but they were found to be the most frequent users of e-commerce. Online marketing therefore needs to be at the heart of any strategy that targets the older generations.

But how old is old? If Prensky’s age grouping is to be believed, the youngest immigrants will be in their early thirties and the oldest well past retirement. Further research is needed into the segmentation of the immigrant population, but they surely cannot all be banded together as one demographic.

The qualitative research offered up a form of segmentation other than age, ones' attitude and willingness to use digital technology. This is where we find the real difference between a digital native and an immigrant. We can all think of examples of keen adopters and staunch 'refuseniks' amongst our networks of friends and contacts, be it in the use of computers in general or particular applications, for example social media.

Natives have grown up with the technology, it has always been there, they don’t have to ‘try’ to use it, they just do. The research discovered that many immigrants were determined to use it, whether to talk to a family member on the other side of the world, or to order shopping and make life that little bit easier. These immigrants went out their way to learn.

Another interesting finding was that natives and neo-natives, having always had technology, do not appear to push their digital technology skills to their potential boundaries. Indeed the results indicated that only a handful of natives or neo-natives have knowledge of ‘advanced’ technology, such as writing HTML code or using applications such as Photoshop to a high standard. The immigrant is much more inclined to explore and discover new territories.

In conclusion, it still seems to makes sense to segment generational use of digital technology into immigrant and native as the academics suggest, but a level of sub-segmentation is needed too - both by age and attitude. Businesses and marketers need to take note of the immigrants' determination to use digital technology and also of the risks of assuming advanced skills in the native generation.

We would like to hear how people perceive themselves without the restriction of given age groupings. Do you think you are a native or an immigrant?

Tuesday, 10 March 2009

Finding your niche

This guest post is by Sharon Wilding, Chartered Marketer and an associate of The Marketing Eye

One of the most important factors in any business, and therefore in any marketing plan, is knowing and understanding the customers you are going after. You have to recognise that it is impossible to market your product or service successfully to all people equally. It doesn't matter if you are a large or small business, you should still be defining the groups or segments of customers you want to appeal to.

The trick is to define the segment as tightly as possible. This is the essence of niche marketing - focus down on a group of customers that you can get to know very well and then ensure what you offer gives them the value they are looking for. Niche marketing helps you develop your products directly for their needs, and can save you a lot of wasted time and money in communications.

At the Healthy Business event I attended recently, a number of previous attendees gave testimonials about what they had gained from the last sessions. The most powerful one came from Alan Noakes of
The ICELAB. His business was developing websites, but he knew this was a crowded market where it is hard to differentiate yourself. The business seminars he went to helped him think differently about what he could offer to make him stand out from the crowd. The answer was to focus on the niche of ecommerce where companies are looking to create or upgrade their website to expand their online sales. Alan researched the local market and found that direct competition in this niche was limited. This gave him the opportunity to claim the ground for his own and establish himself as a real authority in this area, for example by establishing the Ecommerce in Kent Awards.

Of course you can target as many niche markets as you can handle, as long as you stay true to your brand. Alternatively, you can create new brands to target customer groups who might be very different to that for your core offering (there are sound strategic reasons for not wanting to be limited long-term to just one market - if it contracts or disappears you may be left high and dry).

Once you are clear who your customer is (and who is not) so many other things fall into place. Decisions about how you let them know about you and what you do come more easily the more you understand what your customers' needs are and how they tend to buy. If you feel really creative you can give them fully-rounded personalities and lifestyles: age, gender, life stage, where they live, what is happening in their lives and when they need you. Give them a name if it helps!

Narrowing your target audience through niche marketing does not narrow your chances of success - it actually improves them by narrowing your options in that particular circumstance and helping you choose more wisely where you put your effort. Limited resources mean that even products with mass market appeal have to start somewhere!

So grab a piece of paper and answer this question now for your business - who are your customers? How much do you really know about them? And are your marketing efforts really tightly targeted to what they need? If not - do something different!

Friday, 30 January 2009

Segmentation - divide and conquer

We will shortly be starting a segmentation project for one our clients.

Locked inside the firm's client records will be a wealth of information about its clients' needs and how to make them more profitable. Tapped strategically, this information should generate enormous value for the firm.

Turning the theory into practice will be a challenge. We agreed the value of the approach with the firm at the end of last year and now need to maintain the momentum through to implementation.

To put the programme into operation, we will need to rank the clients according to existing and potential profitability, group them and then investigate in detail the needs and behaviours of each segment.

Segmenting and analysing the data will be one thing: changing the core skills and behaviours of the staff to make best use of the emerging knowledge about each segment's needs and profitability will be another. Getting the information and the organisation to work together in this way will be the key to the success or failure of this initiative.

We are prepared for a long journey, but hope it will turn into a successful and useful case study. Look out for reports on progress in future posts.