Human-centered marketing—why brands shouldn't segment consumers

Marketers have become enamored with—even addicted to—segmentation. They use data to group people based on how profitable they will be, then pour resources into the most efficient profiles to maximize short-term sales. Marketing’s job, which was once to manage customer relationships, is now to manage the algorithms.

When we define people by segments, we presume it’s the differences that drive decisions—but people aren’t that tidy. Consumers also make decisions based not just on what makes them different but what makes them the same. Every purchase is an attempt to satisfy a human need that we share with everyone on the planet, and that makes segmentation overly simplistic.

Customers want more than a bargain. Employees want more than a paycheck. Investors want more than capital gains. And communities want more than tax revenue. People want a million other things, including art and music, justice and equality, a nice dinner with friends and a sustainable environment for their children.

Segmentation-dominated marketing strategies actually limit a company’s success. When a marketer aligns on only a handful of attributes, it realizes only incremental gains. But when it satisfies the broader human needs that drive transactions, it can generate exponential gains. This is not just because people will pay more to be more fully satisfied, but because there are so many more people who will want what is being offered.

The best way for companies to succeed is to engage with people as complete human beings. Here are three ways to create a human-centric brand that people will buy from, work for, invest in and welcome into their communities.

Market by human condition

Companies need to stop defining themselves based on expertise in a particular industry or category. They should instead align their purpose with specific human conditions, generating whatever goods, services and experiences satisfy corresponding needs.

Most companies in the self-storage industry, for example, offer lockers or rooms where consumers can securely store possessions. They also offer ancillary products, such as boxes, tape and access to moving trucks—but these are all related to storing items in secure spaces for the long haul.

Storage, however, is only one solution to having too much stuff in the house. If a company was truly aligned with this human condition, it would also offer other solutions, including disposal, consignment or donation for a tax deduction—all of which eliminate extra stuff without storing it. Consumers could choose which solution or combination of solutions best satisfy their needs, and the company could charge accordingly.

Show the full cost

People care what it costs, beyond dollars, to satisfy their needs. Increasingly, they want to know how their decisions affect the wider world. How much does a product increase greenhouse gas emission, water pollution, deforestation and loss of biodiversity? And what is a brand’s track record on corporate diversity and pay equality, overseas labor practices, worker safety and data transparency?

All of these consequential costs can be measured. The methodologies have been part of international guidelines on social responsibility for more than a decade. If a company makes the time to calculate and share its total costs, consumers can trust that it is focused on all their needs. Market forces will ensure that companies with lower consequential costs are rewarded with more purchases, just as they are when they offer a lower monetary price.

Realign internally around human relations

Companies need to restructure to become more human-centric. Currently, the communications function in most companies is separated based on the role the recipient plays for the company. If the company needs to talk to a customer, it’s marketing’s responsibility. If they’re an employee, it’s human resources. If they’re a shareholder, that’s investor relations. And, if they’re a neighbor, that’s a job for community relations.

Unfortunately, these departments rarely communicate with each other. Their competing agendas increasingly create fragmented brands. It’s time to realign under a human relations structure, knowing that all these stakeholder groups share a multitude of human needs that the company could satisfy. Start by identifying the overlap in departmental databases—people who play multiple roles for the company. Chances are, a company has customers who are also investors, neighbors and even employees. Recognizing this makes the need to market to the whole person painfully obvious.

In the end, marketers need to better understand how all the facets of personality unlock a person’s needs value. When companies can satisfy people not just as customers, but also as employees, investors and neighbors, marketing will have strengthened the entire stakeholder ecosystem.