The Death of Consumer Segmentation?

One of the most important paradigms governing today's marketing world is the constant drive to better segment a brand's customer and prospect base. Conventional wisdom says that the better we segment consumers, the better we can market to them. Consumer segmentation is viewed as a "best-in-class" practice across the marketing world.

But are we on the right track? …

…I am challenging that belief based on three observations. The first is that the rather static definition of consumer segments is becoming less reliable in our extremely volatile society, especially in today's economic climate. …

…Second, consumers are never just part of one segment. Rather, they feel, rightfully, that they belong to a multitude of segments. … This is particularly true for the growing multicultural groups in the U.S. who are moving through several segment identities every single day.

Finally, consumers are gaining more control of any marketing activity. And they like it. Yes, they like to receive relevant information, but even more, they prefer to choose their own relevant information. And in truth, it's easier to let them choose and decide what is relevant for them than to predict relevance based on any expensively calculated segment identity. This is a plea to marketers for a stronger focus on enabling the consumer to self-segment. …

It's not surprising that two of the most successful product and retail companies, Apple and Amazon, are not masters of consumer segmentation but experts in building relevant products that consumers choose. Their marketing communication is segment-based but does not depend on pursuing an ever-increasing level of micro-segment-specific relevance. They are far more focused on building and communicating relevance relationships than in micro-segmenting consumers by any kind of attributes. Facebook, MySpace and even Google are behaving similarly. They are enablers of self-segmentation and self-identification through group and interest identities. They do not place targeted, direct communications at the center of their marketing activities, but rather enable consumers to self-target by their own individual choices and network preferences. … [emphasis is mine]