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Ethnography is described in a recent MIT Sloan Management Review article as “artful in situ investigation into what customers do and feel, and how they talk about what they do and feel.” It’s a disciplined way to try to understand how consumers live, work and play — and how their lives make them more or less receptive to a company’s products and services.
In the article “Stories That Deliver Business Insights,” in the Winter 2014 issue of MIT Sloan Management Review, Julien Cayla, Robin Beers and Eric Arnould give an example of how ethnographic insight helped Wells Fargo Bank develop a behavior-based segmentation that divided retirement-planning approaches of its customers into three categories.
“Only a few years ago, the corporate view of retirement planning at San Francisco-based Wells Fargo Bank tended to focus on dollars and cents — how much an individual needed to invest, by when and for how many years,” write the authors. This segmentation did not account for context such as whether a person was inclined to think about long-term financial goals.
“As part of an ethnographic project commissioned by the bank, researchers had customers walk through a life timeline and recount activities they engaged in that related to retirement planning in each decade of their lives — their 20s, 30s, 40s, 50s and beyond,” write the authors. The stories showed that baby boomers faced “a complex phenomenon of continually negotiated personal travails and marketplace dynamics.”
As a result of what they heard, the Wells Fargo team reworked how they think of customers. The bank developed a behavior-based segmentation that divided retirement approaches into three groups — Reactor, Pooler and Maximizer. These groups represented how people felt about and addressed retirement planning: Reactors are stuck in the now; Poolers tackle financial goals one at a time and tend to be risk averse; and Maximizers, the smallest group, think strategically and are willing to make their money work for them.