Why Marketers Should Segment Based on Life Stages, Not Generations

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Let’s say my friend and I are the same age - we grew up in the same town, graduated from the same high school, and even graduated college at the same time. Since we’re in the same age generation, a typical marketer would communicate to us in the same way. However, what if I’m still living at home and commuting to work while he has a wife, a child on the way, and is buying a home? While we may be in the same age generation, we’re certainly in different stages of our lives.

Marketers today often use generational marketing and segment consumers by age ranges. While an important part of segmentation, generational marketing creates broad, overgeneralized and ineffective messaging. 

For example: Consumers in the Millennial age generation (born in 1982-2004) could currently be going through one of the following life stages: college, moving out, getting married or having kids. An effective message to a Millennial in college is not the same message as a Millennial who is having kids. Instead, marketers need to use key milestones in consumers’ lives to reach them at the right moment with a personalized and relevant offer.

While age range or generational marketing has long been the dominant form of segmentation, life stage marketing has proven to be much more lucrative for the savvy marketer. Targeting life stages enables marketers to deeply segment a generation into specific phases of adulthood and craft a more relevant message and offering.

U.C.L.A. Professor Alan Andreason states life stage marketing is the most potentially game-breaking segmentation method as consumers are more likely to change their routine, low-involvement purchasing decisions when undergoing a life change. The New York Times later echoed these findings, saying that “a precisely timed advertisement, sent to a recent divorcee or new homebuyer, can change someone’s shopping patterns for years.”

Marketers need to learn to identify their audience in a similar fashion as the boundary between Generation X, Generation Y, Millennials, and Generation Z. However, for many, the thought still remains: is there a reliable way to market to a consumer regardless of life stage? The simple answer is yes. Word-of-mouth transcends life stage and is the most influential factor for prospective consumers. In fact, 92 percent of consumers worldwide and of all ages say they trust earned media and word of mouth recommendations more than any other form of advertising. 

Our research shows that a word-of-mouth recommendation scores highly across adults going through most milestones. To help understand how to effectively use word-of-mouth recommendations to reach consumers, we’ve gathered tips and stats on major life stages.

Newly Independent 

The Newly Independent phase sees young consumers transition to fully self-sufficient adults. This includes finishing upper education, beginning a career, moving out, and eventually, marriage.

Newly independent consumers are eager to move up in the world, often bouncing around between rented living spaces and career paths. They’re often purchasing high-cost technologies and appliances if they own a living space and are spending more than $9,500 in the first 180 days of moving. 

Another large part of the Newly Independent phase is finding a bank to open both a savings account and to take our their first long-term loan (excluding the increasingly common student loans) on an apartment, house or car.

Our research shows that 41 percent of consumers are influenced by reviews from friends or family when it comes to making a financial decision, and 49 percent recommend credit cards and banking services to others several times a year. Marketers scramble especially hard for newly independent consumers as they are five times more likely to become long-term customers when choosing a brand for the first time.

New Parents

Often not long after marriage, Newly Independents have established a long-term living situation and are starting families. Their primary purchases revolve around clothing, toys, electronics, food and furniture for their new child(ren). In fact, 43 percent of new parents plan on buying new furniture for their child, 33 percent are beginning a new home renovation and 61 percent of new parents intend to buy a new tablet or other technology. 

Since these products are for children, new parents often take a lot of time researching and looking for recommendations before making a purchase. Our research shows that for both moms and dads, social media and word-of-mouth recommendations are the most impactful in convincing them to purchase a product: 81 percent of moms say reviews with personal stories are most important, and 71 percent of dads say they turn to social media to receive recommendations for products or services for their children. 

Post-Parenting and Retirement

As children grow up and transition into college, most parents are thinking about retirement and dedicating time to personal hobbies. One major hobby during this life stage is traveling. In fact, 99 percent of retirees will take at least one leisure trip per year with an average of five or more trips throughout the year. 

However, while consumers in this life stage are frequent travelers, they are not as savvy with online resources for travel planning, and 70 percent will book travel through their loyalty program provider. This makes word-of-mouth recommendations crucial for travel marketers. 

Our research shows that 52 percent of consumers recommend airline or hotel loyalty programs to friends and family and 40 percent base travel decisions based on reviews and recommendations shared by friends and followers. 

Are you interested in learning how a brand community can help segment consumers based on life stages? Schedule a demo with Social Media Link today. 


Mike De PintoTwitterLinkedIn

Mike is an intern for the Marketing Team at Social Media Link. He spends a majority of his time focusing on Social Media Management and Strategic Research to aid in corporate marketing initiatives. Mike is a Senior as SUNY New Paltz and will graduate with a double major in Media Management and Public Relations.