How to Group Customers by Lifestage in Data Driven Marketing - dummies

How to Group Customers by Lifestage in Data Driven Marketing

By David Semmelroth

Knowing about your customers by the stages of their life is important in data driven marketing. Though useful, age groupings only tell you about broad similarities among your customers. Even within age groups, there is wide variation in people’s preferences and needs.

Age is often combined with other variables to classify customers by their lifestage. In marketing, the notion of lifestage revolves around traditional rites of passage in our society. People grow up, go to college or straight to work, get married, have kids, send their kids to college, retire, and so on.

The simplest and most common lifestage groupings make use of age data combined with marital status and information about the presence and number of children in the household. Clearly, any particular age group will vary with respect to these other two factors — it will contain both single and married people as well as large families and childless couples.

Young newlyweds, families with young children, empty nesters, and grandparents are all examples of traditional lifestage segments. But you also have unmarried couples, single parents, and countless other variations that comprise a significant portion of your customer base.

The value of lifestage groupings to you as a marketer is largely, though not exclusively, related to the unique product needs of different segments. Young single mothers are probably not going to be your primary audience for a golf-club membership campaign, for example. But empty nesters might finally have the time to play golf regularly.

When you try to define a target audience for a particular product, look at the way previous purchases are distributed across lifestage segments. Don’t prejudge the groups that you think might be interested. Often you’ll find surprising niche groups that are buying a particular product more often than you would have expected.

It may not occur to you to market pacifiers and baby blankets to single women in their 30s without children. But after a look at your data, you may realize that this group of women gets invited to a lot of baby showers.

On the other hand, you may find lifestage segments that do not perform as well as you would have expected. Knowing that allows you to investigate why these segments are underpenetrated and take corrective action.

When developing or customizing a lifestage segmentation that fits your particular business, work with your advertising group. Lifestage segments are a fundamental part of how TV, radio, and other media are categorized. A particular cable station may be popular with young single women.