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Understanding BYOP and Digital Engagement Segmentation
The term BYOP—“Bring Your Own Persona”—was first introduced by Knowledge@Wharton to describe a method for identifying new customer segments based on their digital engagement. This approach focuses on two key attributes: digital capability and trust, offering a framework for understanding how consumers interact with and adopt digital technologies.
Using the Wharton definition, ‘digital capability’ is a consumers’ ability to maximize their usage of the latest technologies such as mobile apps, wearables, social interaction tools, video chat, mobile payments and location-based services.
‘Trust’ is the “willingness of users to share personal data and, in some cases, relinquish privacy in exchange for a perceived benefit.”
The grid in the below article link illustrates the various types of consumer profiles based on people’s degree of digital savvy, level of trust, willingness to share data and preferred frequency of interactions.
Using this insight to segment customers goes beyond socio-demographic data, because age, income and education are no longer reliable predictors of a consumer’s digital capability.
Read the full article at : Personas Must Better Define Digital Banking Consumer
Key Components of BYOP
1. Digital Capability
- Definition: A consumer’s ability to effectively use and benefit from modern technologies, including:
- Mobile apps
- Wearables (e.g., smartwatches, fitness trackers)
- Social interaction tools (e.g., social media platforms)
- Video chat services
- Mobile payment solutions (e.g., Apple Pay, Google Wallet)
- Location-based services (e.g., GPS-enabled discounts or notifications)
- Importance:
- Consumers with high digital capability are often early adopters of new technology, comfortable with navigating digital ecosystems, and tend to expect seamless, intuitive user experiences.
- Digital capability often correlates with engagement, as these users explore multiple features and functionalities.
- Example of Digital Capability in Practice:
- High Digital Capability: A customer who uses a smartwatch to track fitness, makes purchases via a mobile wallet, and relies on apps to manage banking and travel.
- Low Digital Capability: A customer who only uses basic features on their smartphone, such as calling or texting, and is hesitant to adopt newer technologies.
2. Trust
- Definition: The willingness of consumers to share personal data and, in some cases, sacrifice privacy in exchange for a perceived benefit, such as convenience, personalization, or rewards.
- Factors Influencing Trust:
- Transparency of data usage by brands.
- Perceived security of platforms.
- Demonstrated value from sharing data, such as personalized recommendations or exclusive offers.
- Importance:
- Consumers with high trust are more likely to engage in personalized experiences, share sensitive data (e.g., financial or health information), and use location-based or behavioral tracking services.
- Low-trust individuals are more cautious, avoiding services they perceive as intrusive.
- Example of Trust in Practice:
- High Trust: A consumer who enables location tracking to receive restaurant discounts or shares shopping preferences for targeted ads.
- Low Trust: A consumer who declines cookies on websites or avoids apps requiring excessive permissions.
Segmenting Consumers Using BYOP
The BYOP framework enables segmentation that transcends traditional socio-demographic categories like age, income, or education. This is increasingly relevant as digital behaviors often cut across these factors. For example:
- A 65-year-old tech-savvy retiree might be more comfortable using mobile payments than a 30-year-old professional who is skeptical of digital security.
BYOP Consumer Profiles
The grid from the Wharton article highlights four major consumer profiles based on digital capability (high vs. low) and trust (high vs. low):
| Profile | Digital Capability | Trust | Characteristics | Examples |
|---|---|---|---|---|
| Digital Enthusiasts | High | High | Early adopters, engage deeply with tech, trust brands with their data, seek highly personalized experiences. | A frequent smartwatch user who relies on AI-based fitness apps. |
| Skeptical Adopters | High | Low | Skilled with tech but cautious about sharing personal data, limit use to trusted brands or platforms. | A professional who uses secure video conferencing apps but avoids mobile wallets. |
| Cautious Users | Low | Low | Hesitant about technology and data sharing, prefer analog options or basic digital tools. | A senior citizen who uses a mobile phone only for calls. |
| Traditionalists | Low | High | Limited digital skills but willing to share data with brands they trust, often influenced by perceived value. | A coupon-clipping shopper who trusts a loyalty program app but struggles with its full functionality. |
Implications for Marketers
- Beyond Demographics:
- Traditional socio-demographic factors are no longer reliable predictors of digital behavior. Age, income, and education levels may not accurately indicate a person’s comfort with technology or willingness to share data.
- Example: A high-income millennial might avoid mobile payments for security concerns, while a lower-income Gen X consumer could adopt them for convenience.
- Personalized Marketing Strategies:
- Digital Enthusiasts: Leverage data-driven personalization and cross-channel engagement.
- Skeptical Adopters: Highlight security features and transparent data policies.
- Cautious Users: Focus on simplifying the user experience and offering tutorials.
- Traditionalists: Build trust through consistent, value-driven messaging and support.
- Product Design:
- High-capability users expect advanced functionality and seamless integration.
- Low-capability users require intuitive, user-friendly designs with minimal friction.
- Customer Trust-Building:
- Transparency about data collection and usage can convert low-trust users.
- Incentivizing data sharing (e.g., discounts, exclusive content) can encourage hesitant consumers to engage.
Real-World Application
Digital Banking:
- A bank using BYOP might tailor its offerings as follows:
- Digital Enthusiasts: AI-driven financial advice through apps and real-time transaction tracking.
- Skeptical Adopters: Emphasize end-to-end encryption and data security certifications.
- Cautious Users: Offer guided tutorials on online banking and maintain branch support.
- Traditionalists: Simplify app interfaces and reinforce trust with customer testimonials.
Retail:
- High Capability/High Trust: Implement location-based notifications for store discounts.
- Low Capability/High Trust: Use loyalty cards with an optional app for added simplicity.
