It's all relative: Focusing on market segments

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)