Having recently worked at an organisation that uses fairly traditional customer segmentation methodologies, I have begun questioning the relevance of segmentation in the digital age at all …… and certainly within the next 3-4 years.
My reasoning is this: whilst the broad categorisations of socio-economic segments do have some relevance to digital behaviour, it is increasingly clear that digital proliferation (both hardware and services) have increasing eliminated the barriers to interaction across all demographic and age groups. Grandparents and their grandchildren both shop online (and thus begin to demand the same quality of service and interaction), mobile saturation (especially in the UK) and services such as Skype are creating a sense of being able to communicate where, when and however you want (again, across all age and social categories).
Even the drive to deliver government and banking services online are no longer limited to those more ‘digitally literate’, as the user interfaces on these services have become so intuitive that any demographic can effectively interact with them in a matter of minutes.
As a business, should I simply be looking at my customer base as a group whose core behaviour is similar (increasing unified by the common expectations set by greater proliferation of digital services) and only look to the more traditional segmentation as a means for implying more subtle behavioural nuances?
Taken to its logical extreme, very soon we could easily see a global population (or certainly a UK population), that at a macro level behaves the same in all key vertical markets: 24/7 access and always on services, seamless transition from mobile, online and face to face, being able to transact when I want and how I want to, tailored interactions specific to me and my demands and delivery to my door at a time of my choosing.
Whilst I know that there will be variations within this – for instance a biking enthusiast versus a fledgling App developer will have different demands at different points of their customer journey – broadly they will be looking for all of the items noted above, with further convergence likely at the macro scale, even when there is a sense of individuality and divergence at a micro level.
The challenge for businesses remains in having the flexibility of approach and underlying capability to be able to deliver services this way; with product owners focusing on the unique micro requirements of their customers to achieve differentiation, without the need to worry about the ubiquity and quality of how these services are delivered.