Why personas are not suitable for pricing and selling

Vocatus Pricing & Selling Blog

Pricing and selling powered by Behavioral Economics

Why personas are not suitable for pricing and selling

On their way to customer-centricity, many companies start developing so-called personas: prototypical users. Although we should welcome this change of perspective, the use of personas bears some risks.
Vocatus Pricing & Selling Blog: Warum Personas beim Pricing & Selling nicht helfen. Segmentierung

Personas have initially been developed in the software industry to describe prototypical users that guide software design and development. For more customer-centric marketing and product development, personas are used increasingly in various areas. Although this change of perspective is certainly to be welcomed, personas bear the risk of drawing a false picture of the customer.

#1 Exaggeration: Personas aim to be a generalization of general empirical insights about the customer. On the other hand, they shall be as vivid and tangible as possible. A person shall describe the average customer but in the form of a very concrete person. However, the more precise a persona gets (e.g. Peter, 40 years old, two children, employed, average income, living in the city), the less likely it describes any given real customer out there.

#2 Over-consistency: As with any kind of story-telling (and, in fact, any description of the world), we tend to describe personas much more consistent and coherent than they actually are. We tend to assume that a given socio-economics background (well educated, living in the city) directly translates into specific values (e.g. eco-awareness) and respective consumer behavior (e.g. driving a fuel-efficient car).

 

However – and this is a core insight of behavioral economics – humans are much less consistent, and the link between values and behavior is much weaker than suggested by personas. Peter might actually drive an SUV – not very eco-friendly. And it is more the rule than the exception that situational factors (which are ignored when only looking at social-economic dimensions), have a greater impact on behavior. For example, Peter might be eco-aware, but only when it comes to food and nutrituion.

In a nutshell, personas are not very well suited to explain customer behavior. So what are they good for?

We believe that they work because they can describe not how people actually are, but how people would like to see themselves (in an aspirational sense). Hence, advertising that depicts personas is effective because people want to identify themselves with them by consuming the advertised products.


However, you should not expect personas to tell you anything about how customers make a purchase decision. That’s why they are not useful for pricing and selling. In this case, you need a fact-based, empirical customer segmentation that is based on real-life customer behavior.

 

 

Want us to keep you in the loop about content like this?

By sending this form, I accept the processing of my personal data according to the data protection regulations.

Share this

Share on facebook
Share on google
Share on twitter
Share on linkedin
Share on xing
Vocatus AG Preisstrategie Behavioral Economics