Life Stage Marketing and Segmentation

Issue 29: November 11, 2021

When managing a multigenerational workforce and understanding a customer audience, there are many theories and models that tap into different segmentations. Creating personas and groupings is helpful to understand, interact, engage, inspire, motivate and convert. The current debate is whether segmentation approaches and practices should be based on chronological age, geolocation, life events, values, attitudes, and lifestyles – or even one’s journey to self-actualization with a nod to Maslow’s Hierarchy of Needs.

At 2040 we work with clients to find the perfect balance of combining segmentation models for both the workforce and audience. With the power of data and analytics, segmentation is made more relevant and can be targeted to specific audiences. However, we raise the red flag on the temptation to overclassify and stereotype generations, professions, and age bands, without recognizing the distinct influences of culture, situations and life stages. As an example, we know millennials have delayed life events, AKA getting married and having kids later, but that is a general statement that doesn’t recognize that many in that generation are already married with kids. Although we are grouped by age, location, ethnicity and the like, culture play a strong role. Therefore, less overstatement and more distinct groupings and segments are needed to better reflect who the market really is and how one approaches that market for conversion, engagement, and even brand loyalty.

More, not Less

Most organizations, seek to roll up their personas to a handful. This limited approach seems more manageable, easily understood, and minimizes the mental energy required to monitor, curate, and execute. Personas work across human resources, marketing, communication, customer service and even organizational leadership. The thinking is that a smaller number of personas is better controlled plus the related tasks are more easily managed.

The practice and desire to over-simplify leads to overgeneralization and poor results often without recognizing that the cause of poor performance isn’t because your current or desired customers are ignoring you or you hired the wrong people. Typically, oversimplification reflects the fact that the organization hasn’t taken the time, applied critical thinking, and represented in detail who the individuals are and in what life stages they exist in. Segmentation with more (not fewer) personas reflective of life stage nuances will yield greater success.

Over years of working with clients, we have brought forward, on average, 30-60 potential personas, depending on the client, its audience and how its products or services should be correlated to deliver value and desired results. This higher number is often met with gasps as the immediate default reaction is to resist the amount of work required to manage, curate, and execute communication, marketing, customer service and the like to all potential segments. It does indeed take a lot of work to excel in a more dynamic market where audiences are becoming more ethnically, culturally, and racially diverse — and their needs, wants and desires have become more fluid influenced by life stage.

Modern Leadership

As we have so often surfaced, default human behavior and resulting decision-making are based on the desire to do less work and make things less complicated. But in the end, that thinking has consequences. To be successful with a workforce and a customer base requires more work and more complexity to achieve results.

Designing the appropriate segmentation model is specific to an organization and its relationship with its workforce and its customer base. We offer a variety of factors, theories, and perspectives that we hope you consider when you define, describe, and represent who comprises your workforce and who your customers really are. These factors guide an organization in its interactions, engagement, inspiration, motivation and conversion efforts.

Before you continue reading, keep in mind what we have brought forward over the past issues of this newsletter, starting with The Fault in Ourselves where we demonstrated how strongly our biases play into how we perceive and define others and the world around us. We raised the issues on critical thinking, leading with courage allowing criticism, active listening, recognizing patterns, improving decision making, measuring what matters, curating first-party data, and mastering communications that actually communicate. Each of these themes separately and combined represent best practices that you should consider in creating deeper understanding of the humans that comprise your workforce, customers, and society at large.

The Life Stage Debate

According to author Laura Lake, “Lifestyle segmentation involves dividing an overall market into groups of people with shared buying preferences and other lifestyle characteristics.” This is achieved “by gathering insights about customers, dividing the market into different segments based on insights, and then selecting one or more markets to target in your marketing mix.” Segmentation can be very arbitrary. For example, “An audience can be categorized as innovators, thinkers, achievers, experiencers, believers, strivers, and makers.” Or an audience can be segmented by age-defined segments. Or an audience can be categorized by demographics, psychographics, geographics or behaviors. All models have benefits … and drawbacks. A better approach is to consider life stages taking into consideration cultural and societal implications.

Life Stages: Five Generations

While it’s important to understand that human default behaviors result from personal factors and variables, it is also key to gain clarity on how life stages play a role in changing personal and professional beliefs, values, needs and want. Technically, nine life stages are defined chronologically.

1. Prenatal Development

2. Infancy and Toddlerhood

3. Early Childhood

4. Middle Childhood

5. Adolescence

6. Early Adulthood

7. Middle Adulthood

8. Late Adulthood

9. Death and Dying

However, there are some deeply embedded risks to viewing an audience based on chronology. How many times have you heard, “I don’t feel my age!” And with the breakthroughs in stem cell therapies and cosmetic surgery, many privileged people don’t even look at their ages. Chronological segmentation does not allow for the recognition of attitudes, values, culture, personal knowledge, or life experiences, and it is subject to conscious and unconscious bias that leads to over-classification. Plus, there is a major elephant in the world: With life extension becoming the norm for the future, a reevaluation of chronological life stages is inevitable. Our current definition of life stages remains rooted in the past, and as we have continued to surface, the past is the past and not reflective of current or future environmental, human, or societal factors and variables. Therefore, using the past to define today and tomorrow is immediately based on faulty thought processes.

When you live to be over 100 years old, what then, is adolescence, which is already evident today in younger generations with delayed adolescence. What would be a mid-life crisis? The breakthroughs in bioscience are going to upend the chronological life stage construct. One thing that will remain true is that women are born with all the eggs they will ever have … naturally. And these eggs will continue to age along with them. It will require medical intervention to change the biological clock urge to have children when a mother could live to be over 100. The jury is out on 50-year-old eggs as a safe bet for having a first child. Harvesting eggs may become a big business. Chronological life stages, in our opinion, are too limited to be useful – especially, as mentioned, with the impressive breakthroughs in medical sciences.

Demographic Segmentation

For decades, marketers and organizational leaders believed that people could be well understood by their demographics. However, this model has little to do with character traits, behavior, or values. Demographic segmentation is objectively defined by age, gender, ethnicity, income level, education, religion, and profession/role in a company. It would seem efficient to target your audience based on income alone so you don’t waste resources on individuals who may not be able to afford your offerings. But income alone is a not a reliable marker; people choose products and services for different reasons whether or not they are in the same income brackets.
A subset of demographics is geolocation segmentation. On the surface, it may be the easiest to identify and group customers by their physical location, including country, region, city, and postal code. In our opinion, however, people have more in common with other people who read the same media than they do with those living in the same zip code. Neighbors are not as similar as one would think, and not a reliable way to market to them or even understand what motivates them. This is particularly dramatic today when countries, regions, cities and even neighborhoods are becoming so ethnically, culturally, and racially diverse. The recent 2020 census alone demonstrates that the United States is a very different country than it once was. The one-size-fits-all approach of the past has no currency today.

Values, Attitudes and Lifestyles

VALS (Values, Attitudes and Lifestyles) was created in 1978 by social scientist and consumer futurist Arnold Mitchell at SRI International as well as based on the work of Harvard sociologist David Riesman and psychologist Abraham Maslow.

The VALS framework plots resources and primary motivation into a matrix. At 2040, in our interactions with organizations across a variety of industries and organizational types, we have found the VALS structure is useful, but also believe VALS can lead to over classification and overgeneralization.

According to Wiki, VALS buckets people into eight segments:

1. Innovators. These individuals are on the leading edge of change, have the highest incomes, and such high self-esteem and abundant resources that they can indulge in any or all self-orientations. Image is important to them as an expression of taste, independence, and character. Their consumer choices are directed toward the “finer things in life.”

2. Thinkers. These are the high-resource group of those who are motivated by ideals. They are mature, responsible, well-educated professionals. Their leisure activities center on their homes, but they are well informed about what goes on in the world and are open to new ideas and social change. They have high incomes but are practical consumers and rational decision-makers.

3. Believers. These individuals are the low-resource group of those who are motivated by ideals. They are conservative and predictable consumers who favor local products and established brands. Their lives are centered on family, community, and the nation. They have modest incomes.

4. Achievers. These are the high-resource group of those who are motivated by achievement. They are successful work-oriented people who get their satisfaction from their jobs and families. They are politically conservative and respect authority and the status quo. They favor established products and services that show off their success to their peers.

5. Strivers. These people are the low-resource group of those who are motivated by achievements. They have values very similar to achievers but have fewer economic, social, and psychological resources. Style is extremely important to them as they strive to emulate people they admire.

6. Experiencers. These are the high-resource group of those who are motivated by self-expression. They are the youngest of all the segments, with a median age of 25. They have a lot of energy, which they pour into physical exercise and social activities. They are avid consumers, spending heavily on clothing, fast-foods, music, and other youthful favorites, with particular emphasis on new products and services.

7. Makers. These individuals are the low-resource group of those who are motivated by self-expression. They are practical people who value self-sufficiency. They are focused on the familiar — family, work, and physical recreation — and have little interest in the broader world. As consumers, they appreciate practical and functional products.

8. Survivors. These people have the lowest incomes. They have too few resources to be included in any consumer self-orientation and are thus located below the rectangle. They are the oldest of all the segments, with a median age of 61. Within their limited means, they tend to be brand-loyal consumers.”

What is interesting about using VALS is marketing to an audience based on psychological attitudes rather than life stages. For example, people who buy the same brands cannot be segmented into one convenient demographic or even psychographic group. Different people buy the same thing for completely different reasons. Therefore, marketers can customize messaging to align with one’s attitudes. In terms of a workforce, you can evaluate your employees according to the VALS matrix and then organize teams that are inclusive of different attitudes to deploy for problem-solving. These segments are also useful to understand the motivations of individuals and how their values and attitudes can be leveraged positively in a holistic, systems-thinking organizational model.

Life Events

A life stage can also be described by life events that inform behaviors and beliefs. A few key examples include being a student, young professional, newly married, becoming a parent, a grandparent, entering retirement and being critically ill. As history demonstrates, generations are most influenced by the life events surrounding them when they are young.

Those growing up in the depression of the 1920s were more frugal and resourceful, mindful of the scarcity of income and goods at the time. They were more suspect of institutions, kept money close and were more appreciative when times were good. Those growing up during World War II continued the frugal nature of their ancestors and took personal and family security more seriously as they or family members fought in the War. The atrocities of the War also beget a desire for greater societal respect and increased equality. Post-War, this generation sparked impressive growth in all aspects of society and were the parents of the Boomers. All generations prior to X, millennials, Z and Alpha trusted information sources via newspapers, books, broadcast television and radio, whereas today the paradigm of trust is completely different.

According to Danielle Caudill, there is wide interpretation in how each life stage is defined. For example, she says,” Being happily single is an early life stage, consumers are usually recent grads who are single with no children, have not purchased a home, and are focused on building their careers while still enjoying the thrills of youth. During this life stage, consumers tend to spend more on fashion items, vacations, and other forms of recreation. And then there is the “new nest to full nest life stage when the addition of children to a household dramatically alters behavior. This can even be segmented further, separating new nesters or those with children under six years of age from full nesters whose youngest child is over six. This is simply due to the changing needs of children as they age.” Another key life stage is the empty nest when “children of a household leave for college or venture out on their own, and the needs of the now empty-nester parents drastically change. Expenses can decrease as the household size decreases, freeing up more disposable income for vacations, travel, and other recreational activities. College tuition may become an expense and the need for medical products and services may continue to increase.” The retirement life stage is not static. For example, “retired empty-nester couples may seek warmer climates or choose to downsize their home. Both single and couple retirees spend more on vacations, traveling, and recreation. All consumers in the retirement stage of life, whether single or not, have an increasing need for medical-related services and products.”

A life stage impacts thought, opinion, needs and wants at specific points during a lifetime. Accordingly, life stages change over time, based on one’s situation, life events, and therefore changing attitudes, lifestyles, and values. An organization can manage a multi-generational workforce more effectively if it can categorize its workforce members into life-stage groups. This is also true for classifying the customers that comprise their market. Instead of seeing workers and customers as one homogenized group or a few high-level overly rolled-up groups, we should recognize and appreciate the attributes that truly reflect distinct groups and segments of individuals.

The Journey to Self-Actualization

At a higher level, segmentation of any audience based on the journey to self-actualization is an enlightened approach that is useful for both organizational leaders and marketers. Abraham Maslow created this construct in 1943 and it is still relevant and continues to resonate as a “classification system which reflects the universal needs of society as its base and then proceeding to more acquired emotions,” according to Wiki. The theory is usually illustrated as a pyramid with the largest, most fundamental needs at the bottom, and the need for self-actualization and transcendence at the top. “In other words, the idea is that individuals’ most basic needs must be met before they become motivated to achieve higher-level needs.” Although this may sound like New Age psychology, it has been validated that individuals cannot achieve a higher level without their basic needs having been met. In Maslow’s matrix, physiological needs ( air, water, food, sex, sleep, clothing, shelter) are the base of the hierarchy. Next are safety needs (health, emotional and financial security). Love and social belonging needs (family, friendship and intimacy) are the next level up. Then people have a need for stable esteem, based on both the need for respect from others (status, recognition, fame, prestige, and attention) the need for self-respect (strength, competence, mastery, self-confidence, independence, and freedom).

After esteem needs, cognitive needs such as creativity, foresight, curiosity, and meaning comes next, followed by aesthetic needs which require “beautiful imagery or novel and aesthetically pleasing experiences, including immersion in nature.” Self-actualization is the level that represents a human’s full potential, including finding a partner, being a parent, using and developing talents and abilities and pursuing goals. Finally at the apex is transcendence or spiritual needs, raising life to a higher plane of existence which is the major aspiration to have religious choice, spiritual explorations, choice of experiences, how we volunteer our time to help others or promote a cause.
As we have said, this model requires some deep thinking and understanding, but with next generations’ demand for social justice, sustainable practices, leveling of hierarchies, acceptance of individual choice, respect for diversity and inclusion and transparency, Maslow’s psychological model seems like a relevant roadmap to understanding younger workers and customers needs.

Transformation and Life Stages

Ultimately, life stages are windows into understanding our workforce and customers without the biases that cause us to create stereotypes that are aligned with us and those like us. It is precisely these biases that lead to faulty judgment of who the workforce and customer base are. We need to understand and respond to our audiences which may be in different stages of life with different circumstances, leading to specific attitudes, values, and behaviors.

When considering organizational change, transformation or adaptations needed to relate to and grow a changing and more diverse population, one must take a holistic approach that does indeed require a significant expenditure of energy, creates complexity, takes resources to manage, demands critical thinking, and leads to a true recognition of the environment and reality. Remember, our default perception (comprised of our biases) is our reality. Often that perception is very different than the true reality.

Recognizing the contextual factors and variables, removing our biases and perceptions, provides insight on the transformation type and structure reflecting across both the macrosystem (world, country, region, and locality) and the microsystem (individuals representing the customer market and the workforce).

Understanding generational and life stage nuances including factors of culture and individuality across ethnicity, nationality and gender identification can inform an organization, in the context of its mesosystem (the organization itself and how it is operated and structured), in its redefining of the current or desired customer base and in how it builds, manages, and interacts with its workforce. The exercise will create surety as to how the organization (mesosystem) needs to orient, change, and transform to adapt and be relevant in current and future societal terms. Reach out to us at 2040 and we can help you navigate the exciting and complex world of life stages and intelligent strategies to empathetically connect with all your stakeholders.