It's all relative: Focusing on market segments

April 28, 2010 at 08:00 PM
Share & Print

Today, more than ever before, insurance agents need to focus their marketing efforts on those segments of the marketplace that will be most receptive to their product and service offerings. Many segmentation techniques use databases and sophisticated computer-based demographic analysis. There is, however, another highly effective segmentation approach that can help agents focus their marketing resources where they will achieve greater returns, with or without database support.

Early in the last century, social scientists created the concept of "cohorts" or groups of people born in a particular period of time and bound together by shared experiences and historical events. The premise is that people shaped by a particular series of influences share a common value system. As a result, members of different generations react very differently to the same stimulus. Generational cohorts can provide agents with unique insights concerning the biases, priorities and preferences of market segments. The resulting information can inform the decision-making process and help agents develop targeted campaigns that will resonate with their target markets.

Market segmentation using generational cohorts goes beyond demographic profiling. For example, many demographic studies assume that people entering a certain age group will display the same preferences and behaviors as those who preceded them. This is generally not true because each generation is shaped by different sets of events and influences that are often radically different. An excellent case in point is how different generations view retirement. (Segmenting the senior market)

Of course, agents also have their own particular generational perspectives which must be put aside if they are to make sound decisions regarding marketing strategies for another generational cohort. While it may be difficult to remove personal values from these types of judgments, the ability to do so can often make the difference between connecting with the target market and misjudging it entirely.

This article is adapted from The Professional's Guide to Financial Services Marketing: Bite-Sized Insights for Creating Effective Approaches (Wiley Publishing), by Jay Nagdeman. For more information, visit www.SuasionResources.com.

Check out more of Jay's Marketing Tips.

NOT FOR REPRINT

© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.

Related Stories

Resource Center