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5 reasons why you shouldn’t rely on generation segmentation

Posted by Nikky Lee - 25 October, 2022

You’ve probably heard the stereotypes: Baby Boomers are hard-working but out-of-touch, Millennials are tech savvy but lazy, and Gen Z are progressive but narcissistic. While generational analysis may have its uses in understanding macro shifts in society and youth culture, it’s not something businesses should rely on for segmenting their market or customers.

Here's why.

 

Problem 1: Arbitrary parameters

Most sources agree that Baby Boomers are those born between 1946 and 1964, with the Silent Generation preceding them (born before 1945) and Gen X proceeding (1965-1976-ish). The problem is these cutoff dates are arbitrary (note the -ish on Gen X’s dates). There is no common methodology that determines where one generation ends and another begins. Moreover, different sources claim different brackets for each generation. For example, Pew Research states Gen Y/Millennials run from 1977 to 1995 (18 years) and Gen Z from 1997 to 2012, while other sources say Millennials run from 1981 to 1996. Meanwhile, Gen Z can be where from 1997 to 2010/2012/2015.

While we understand there is always a need to draw a line in the sand when it comes to using age demographics in segmentation, the weakness of these generational cut-offs is the lack of consistency to easily compare data. The second weakness is the huge span of years these cut-offs cover.

For example, people born in 1964, the last year of the Baby Boomer cutoff, are still labelled as Baby Boomers. If we rely on generational segmentation, they supposedly have more in common with their fellow Baby Boomers born at the beginning of their generational cutoff in 1946 than people born the year after them in 1965. The reality is people born in 1964 and 1965 are far more likely to share common experiences than those born in 1946 regardless of which side of the generational line they fall on.

For this reason, most research and segmentation that involves a form of demographic age data uses smaller time framers to better capture and understand the nuances between age groups.

 

C22-Segmentation_Blog4-Advanced-Strategies

 

Related content: Understanding Your Audience [Free Online Guide]

 

Problem 2: Defining by stereotypes

Many a Millennial will baulk at being called lazy or entitled just as Baby Boomers are apt to bristle at the 2019 buzz phrase ‘OK Boomer’—and with good reason. Just because people fall into one generation or another, doesn’t mean they are carbon copies of one another. Many a Baby Boomer has welcomed new ways of living and working with open arms, while not every Millennial spends irresponsibly or every Gen Z self-absorbed. Mistaking these broad-sweeping stereotypes for customer insights is dangerous for brands. Stereotypes are not real people and trying to develop products and market to consumers as if they are means you’re likely to miss the mark.

Instead, use needs-based or behavioural segmentation to target customers/consumers who share the same need or behaviour rather than relying on generalised and often inaccurate assumptions about people based on their generation.

Which also leads to our next point.

 

Problem 3: Risk of alienating

Because the generations are overgeneralised, many people don’t like being labelled as Gen this or Gen that. Using broad, generational characteristics as a basis for your segmentation means you not only risk missing the mark but alienating a sizable portion of the audience you’re trying to engage with.

As Paul Jankowski from Forbes noted about the ‘OK Boomer’ phenomenon, “It’s one thing if your 16-year-old niece doesn’t understand you, but if the brands you buy from mock your perspective, well, that’s just a recipe for brand loyalty disaster.”

 

Problem 4: Confusing generational effect

You’ve probably seen headlines like, ‘Gen Z more financially uncertain than Gen Ys’ or ‘Gen Zs the most unengaged generation’ and we have studies that compare current circumstances without accounting for age and career progression. Because of their age and being relative newcomers to the workforce, Gen Zs are more likely to be working casual, part-time and entry-level jobs and earning lower salaries, of course they are less financially secure. Of course they are more likely to be dissatisfied with their job since they have had less time to move up and sideways in their careers to find something that suits them. This is not a generational difference, it is an age and career experience difference.

Likewise, we often hear and read sentiments along the lines of ‘Gen Z is the most narcissistic generation’. But are they really? As Louis Menand noted in his New York Times article, “if you are basing your characterisation of a generation on what people say when they are young, you are doing astrology.” All teens and young adults, regardless of generation, tend to skew more heavily towards narcissism, which is normal as they transition from child to adult. Unless a study has compared narcissism in people of the same age over a period of decades, these so-called generational traits being reported are actually age traits.

 

Problem 5: Distracts from true understanding

There are 1.8 billion Millennials on Earth, and 9 million of them live in Oceania, according to the World Economic Forum. That’s a lot of people with a lot of variety in how they think, feel and behave. As a segment, it is far too big to deliver any meaningful consumer insights that marketers can make use of. Moreover, generalising consumers according to what generation they fall into is more likely to distract rather than help you distinguish unique groups of consumers. Instead, needs-based segmentation and psychographic segmentation are going to give you a far better picture of the different types of consumers in your market and, most importantly, how your business can best meet their needs.

 

Summary

While generational insights can provide an interesting snapshot of youth culture, trends, and the impact of social, economic, political, technological and environmental factors on society, there are a number of problems with using it to segment your market or customers. Generational analysis is often too overgeneralised to be useful for businesses, and there are far more effective types of segmentation available that provide more nuance and better understanding of specific customer types.

 

Learn more about the power of segmentation and how it can enhance your marketing and cut-through with our all-in-one guide: Understanding Your Audience.

 

Topics: Segmentation


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