Apple’s launch this week of Apple Pay, its m-commerce product, could help finally move millions of mainstream consumers toward the promise of mobile payments, according to media reports. Given that Apple Pay will expose user preferences for payments and sharing data, this is a good time for companies to re-think how they segment their digital consumers, writes Mobiquity president Scott Snyder in this opinion piece.

With more than 1.8 billion smartphone users and nearly 2 billion people using social media worldwide, mobile and social are becoming the dominant modes of human interaction, notes the We Are Social Digital and Mobile Worldwide Research Report published last January. In addition, wearable devices in the form of activity trackers, smart watches and even connected clothing are quickly emerging with more than 150 million users worldwide, tracking everything from steps and calories to heart rate, breathing and even stress. This new breed of always connected and self-aware end-users is changing the rules for how companies do business and engage their customers.

Just this week, on October 20, Apple launched Apple Pay, an e-commerce product that lets users pay for their purchases with their iPhones. According to a report in The New York Times, by pushing a button consumers will be able to make a purchase at one of thousands of retail locations. The report adds that while “large tech and telecom companies like Google, Verizon and AT&T have tried for years to replace the traditional wallet with smartphone apps … commerce experts say they believe that the involvement of Apple, which helped revolutionize the mobile industry, could be the impetus that moves mainstream consumers to digital payments.”

With their growing numbers, ultra-connected users now have the power to make or break businesses. While these new technologies offer opportunities to create new business models and revenue streams, failure to deliver an engaging experience or clear benefit in exchange for the data being collected can just as easily mire a company in mediocrity because of a poor customer impression.

Bring Your Own Persona (BYOP)

At their core, digital users are individuals who bring a unique digital profile and set of behaviors to every situation. This new digital world of “Bring Your Own Persona” (BYOP) requires a fundamentally different way of thinking about customers. It used to be assumed that people exhibited predictable behaviors in their public and private lives based on their socio-demographics, allowing firms to use classic segmentation for targeted interactions. Those models are no longer sufficient. Almost all demographics have access to mobile, social and wearables. What distinguishes different digital user segments is their savvy in knowing how to use these tools and their comfort levels with the data they are willing to share in various scenarios.

New digital personas can be characterized along two important dimensions: digital capability and trust.

Digital capability takes into account the user’s ability to fully use all the latest technology features, functions and services available to improve their overall effectiveness and quality of life. This includes basic activities such as mobile apps and social communications as well as more advanced tools such as voice agents, video chat, location-based services, mobile payments and wearable devices.

Failure to deliver an engaging experience or clear benefit in exchange for the data being collected can just as easily mire a company in mediocrity because of a poor customer impression.

Trust involves the willingness of users to share personal data and, in some cases, relinquish privacy in exchange for a perceived benefit. As “Quantified-Self” technology races ahead with the ability to capture every aspect of our lives through smartphones, wearables and social media, we are still wrestling with the fundamental question of whether we prefer personalization to privacy. Some of this comes down to the value that companies and their customers place on different types of data. For instance, in the early days of E-ZPass, many people preferred to sit in long lines at tollbooths rather than have their whereabouts known by the government.

Using trust and capability as the core drivers of digital behavior, we have mapped out six digital user segments (shown below) to capture the new interaction models we expect to see and estimated the distribution across the general consumer population. These digital segments transcend traditional industry boundaries as people adopt behaviors across a range of settings and selectively apply those same behaviors in different settings depending on their level of trust and sophistication. BYOD — Bring Your Own Device — is old news. In the new digital age, a BYOP model will be crucial in optimizing mobile and social experiences for consumers.



These segments are:

Analogs: They are unwilling to and/or incapable of using digital technologies. They may have been capable digital users who decided to “unplug” due to privacy or life-balance concerns. At best, analogs might be willing to dip their toes into the digital waters via easy-to-use touch points like simple kiosks or websites before progressing to more advanced interactions like mobile and social.

Wannabes: Here we have embryonic users of mobile and social who are very eager to learn the basics so they can seem to be experienced. Wannabes are a group that you want to engage going through their peers who have more advanced capabilities. Once Wannabes see their friends doing something cool or valuable, they will educate themselves to at least get by. Think of seniors talking to their grandkids on Facebook. Once they realized this was the place their grandkids hung out, they put in the effort to become basic Facebook users (not many have progressed to be power users).

Mainstreamers: These are people willing to opt in to most digital solutions with a strong possibility of a benefit in the near future. Mainstreamers represent the pregnant middle of the market, ready to be nudged toward behaviors and outcomes that are good for them and others. Show them the value of each interaction, and they can quickly become loyal digital patrons. If the value equation diminishes (compared to competing offers), you may lose them.

Paranoids: These are cautious users who are very protective of their data and need to be persuaded that there’s a value in sharing their data. Paranoids represent a potentially dangerous group as they will lash out if they believe their personal information is being compromised or misused somehow. Companies that do not respect the privacy needs of this segment risk public scrutiny and bashing.

Chameleons: Here are digital savvy users who will change their digital behaviors and data sharing to suit each situation and personal interests. They are protective of their data when they perceive there is limited benefit or have low trust. Chameleons will educate themselves on the privacy policies of different brands and make sure they share only what they need to. It will take an extremely strong value proposition or clear privacy controls to engage them with highly personalized interactions.

Digital Nomads: People in this segment truly want to port their digital profiles anywhere in any setting. They are willing to share data on the promise of a future benefit for them or a broader group. Digital Nomads fully expect that you will not just collect their data, but use it to deliver an exceptional user experience and significant benefit for them and other users like them. Achieve this and they will be your greatest champions. Fall short, and they will become your biggest critics.

The distribution of users across these new digital profiles will obviously change over time with a general trend toward the upper right (Nomads) of the segmentation map. However, depending on shifts in customer attitudes toward privacy, regulation, market dynamics and the perceived value being delivered by digital solutions, this could go in the other direction or even fracture with a population of users choosing to disengage if the privacy-versus-benefit equation does not work.

Companies that are able to reorient their marketing and product-development efforts around digital customer segments and behaviors will tap into the hypergrowth that mobile, social and wearables are experiencing.

As we shift toward a BYOP model, how should companies change the way they engage their customers and target their products and services in order to win? The key areas firms and their leaders should focus on are:

Adopt a Digital Segmentation Model like BYOP. Companies need to modernize the way they target digital consumers to maximize value in each segment. A great example is eBay’s strategy with PayPal, a relationship that appeals to multiple demographics with more flexible payment options.

Be Transparent with Customers about Data Usage. Consumers and employees alike are willing to give up data for value. Clear and concise disclosure for what data is being used and why, as well as simple user controls to opt in and out of different levels of data sharing, are essential to establishing end-user trust.

Develop a Strong User-centered Design Capability. Whether through developing in-house capabilities or through third parties, companies must tailor the user experiences of applications and web interfaces for the specific needs of each BYOP segment. This requires creative thinking. An example is WellDoc’s behavioral approach in designing its DiabetesManager application that caters to both patients and caregivers.

Use Big Data and Predictive Analytics to drive more personalized interactions. Big data and analytics capability will allow you to fully leverage the rich data available from the range of new digital touchpoints and turn this into high impact interactions. It will also ensure you don’t treat a Digital Nomad like a Paranoid and vice-versa. Walmart is starting to personalize its mobile shopping experience based on the user situation and history.

Companies that are able to reorient their marketing and product-development efforts around digital customer segments and behaviors will tap into the hypergrowth that mobile, social and wearables are experiencing. By tailoring the interactions to their unique digital abilities and attitudes, successful companies will create more offerings that appeal to Wannabes, Nomads and Mainstreamers. Likewise, market leaders will be aware of the limited competency and privacy fears of Analogs and Paranoids, being sure to engage them with clear and transparent interactions or through trusted peers. Some will even find ways to engage Chameleons through digital interactions that build trust and nudge their behavior toward being a Nomad with respect to their brand. Now is the time to adapt your business to the digital personas across your customer base so you can make the next interaction the right one.

Scott Snyder is a senior fellow at Wharton as well as president and chief strategy officer of Mobiquity, a professional services firm headquartered in Wellesley, Massachusetts.