Chasing the Holy Grail of Targeting Segment of 1

We all, as customers, would like to believe that we are not part of any arbitrary segment a marketer draws up. We believe we are unique and hence belong in a segment of 1.  Even marketers believe in this ultimate holy grail of targeting a segment of one – design and deliver each customer his/her own version of the product at their own price. Better yet, some just provide options and let the customers design their product version. From building stuffed bears, cars to breakfast cereals ( my friend’s Cereal venture that was TechCrunched) marketers bring the power of infinite customization to let the customers believe they are a segment of 1.

Is there such Holy Grail and is it worth searching for it?

The questions need to be answered from both customer and the marketer’s point of view

Customer:

  1. Despite what we tell ourselves and believe in we are not as unique as we think. What is the market size of blue jeans and iPod? (Sheena Iyengar, The Art of Choosing)
  2. Despite the need to stand out we want to fit in so we share with our clique (or tribe). We want to discuss the show we watched with our connections on twitter and facebook, we wanted to stand in line with other fans to get our hands on iPad (even though Apple will sell one to everyone who has wherewithal to pay or one).
  3. We are subject to conformity bias – despite our belief that we are a segment of one, our choice and behavior can be influenced even by very weak associations. (Cialdini, explains hotel guest behavior influenced by what they were told about previous guests of that room).
  4. We are limited in our cognitive abilities and resources to evaluate different choices and decide which version is uniquely ours.

Marketer:

  1. There are big costs to delivering options – you lose economies of scale, you incur versioning costs, your messaging is diffused.
  2. Your customers, despite what they say are not willing to pay for the choice.  Much maligned Henry Ford first found what the customer was willing to pay and decided that  he can only provide one version. Until cost structures improved there was just one color.
  3. Regardless of explicit reasons, there is an unstated reason  why a customer is buying a product. These reasons fortunately are not unique per customer, the reasons fall into categories based on what job the customer is hiring the product for. (Clayton Christensen)

Your customers can’t handle it, you can’t deliver it – so why chase the mythical Holy Grail? Marketing is about Segmentation, Targeting and Positioning – but more does not mean better.