Bancography | Branch Planning, Marketing Research, Brand Strategy, Products & Profitabilty

‘All People Ages 18-55′ Is Not Your Target Audience

Ask a retail financial institution to define its target audience and you will frequently hear something like, “All people ages 18-55.” They might say it “skews slightly towards women.”

Reality Check: This is essentially the same thing as saying, “We’re targeting everyone with money and a pulse.” That isn’t a targeted market segmentation strategy, it’s basically the same thing as saying “we serve the entire market.”

“Try to appeal to everyone, and you will end up appealing to no one.”
— David Ogilvy, ad legend

Everyone’s heard the expression, “You can’t be all things to all people.” But when you define your target audience so broadly, you’ve committed a major error in branding. You should be concentrating your brand on a specific, focused segment. Instead, by essentially targeting “all people,” you have to offer all the things those people want — all the product, services, rewards, benefits, features, online access, service options, etc.

The rationale behind this common branding mistake is understandable. Most financial institutions attract deposits — usually from a more mature audience — in order to make loans to younger, credit-driven consumers. But this only defines your basic business model. You still need to build your brand around a specific market segment.

It seems many organizations view marketing as “an entire company” communicating with “a target audience.” But groups don’t talk to groups. That’s not how human communication works. People talk to people, one-to-one. The marketing messages you send aren’t being received by “all people ages 18-55.” They are being received by real people, individuals like your husband, or your sister, or your mother, or your daughter.

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Beyond Demographics

Demographic data can hurt as much as it helps. Putting everyone into buckets based on age, income and gender is easy and manageable, but in most cases, it grossly oversimplifies the definition of a real target audience. Demographics may have been sufficient for the marketers of yesteryear, back when concepts like “target marketing” were in their infancy. But these days, you need to be placing more importance on things like lifestyle and psychographic profiles.

Reality Check: Knowing someone’s age, income and gender may give you a vague idea of the financial situation they’re in, but it really doesn’t give you any insight into the real issues and concerns they face.

The essence of branding hinges on two central concepts: relevance and differentiation. The more you focus your brand around a narrow market segment, the more relevant you can become. You can tailor your products, messages and experiences specifically for this audience, thereby maximizing the relevancy of your brand. On the other hand, as you widen your target audience, your brand will increasingly be forced to share its position in the marketplace with more and more competitors. Simply put, the more people you target, the more competition you’re going to face. Or, in other words, you end up competing on the lowest common denominator: price, fees and rate.

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Key Question: What is the largest audience segment that provides the most growth opportunity for your brand in the next 10-20 years?

“Standing in the middle of the road is very dangerous. You get knocked down by traffic from both sides.”
— Margaret Thatcher

It’s hard — very hard — to get everyone in your organization to agree on a single, focused, well-defined target audience. But until you do, your brand will suffer. Your team must work together and have hard discussions to strip out all the subjective opinions of what the correct, most-profitable segment is. (Hint: Research will probably be needed.)

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  1. Jeffry, thanks for writing this – we talk about these points with bankers everyday. Something that we often find is that bankers will talk about their ‘target’ as 18-55; but this is the target because it represents a group that is younger than many of their current customers. These bankers still want to serve (and market to) these older customers, so this only makes the group that much bigger…it really can be ‘all people’ for some institutions.

    On another note, we are seeing more institutions using psychographic data for targeting, which is encouraging. It will be interesting to see how that data changes as consumer behaviors change given the current economy.

  2. Thanks for the comment Brady. I have always respected the insights of you and your team.

    The problem is commonly stated this way: “Our average age is older, around 58, and it’s aging, so we need to appeal to a younger demographic… But!!! without alienating our existing, long term customers.”

    Unfortunately, they often seem to think that means creating an identity that is “middle of the road” instead of committing to a more contemporary identity with a more progressive message — something with real appeal for the younger demographic they seek. (Note: that does not necessarily mean “hip,” “cool,” “funny,” Web 2.0, etc.)

    The reality is that you have to target the customers you want (i.e., younger members) and do so 100%, with absolute commitment.

    No matter how progressive a financial institution takes their brand, existing long term customers seldom defect — a truth I’ve seen borne out dozens of times with data from my real world, first hand experiences. Surely, there are always a few curmudgeons who hate change of any kind. They may decide to leave, but more often than not, their departure is largely symbolic. So what if they close their $200 savings accounts or their $500 CDs? It isn’t a large group of people who protest.

    Most existing customers are unaffected by a brand overhaul. Some even see it for what it should be: a positive change to keep the organization fresh and relevant, growing for the future.


    Re: Targeting “18-55.” Yes, there could very well be a target audience that encompasses this demographic. ING Direct is a good example. They are targeting “Savers,” with an emphasis on those who are online, fairly tech savvy and prefer self-service. That group does include people of almost any age. I’m guessing their sweet spot is Gen X though. I could be wrong.

    Also, the larger banks do target everyone. Like Bank of America. They want to be America’s bank, the bank for all Americans. Same thing for Wells Fargo, Chase, Citi, etc. But it takes a pretty big infrastructure to be a bank for everyone. Besides, that brand position is locked up in the market by large banks, so trying to compete on that basis is pretty tough.

    I suppose the point is that if you haven’t defined your target audience any further than demographics or if your focus isn’t any more narrow than “18-55,” you’ve still got some work to do.

  3. As always, great post Jeffery! We see such broad definitions of “target markets” that they really aren’t targets at all. The more specific a target, the better the target. Relevance and differentiation are they keys to marketing now.

    “Why should I do business with your financial institution” is a question most banks and credit unions struggle with. And the answer to that question is NOT “service!” If you can’t answer that key question in less than 15 seconds people won’t listen to you.

    Thanks again for a thought-provoking post!

  4. Thanks for the comment Mark. You’re absolutely correct.

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