With the novelty and excitement of Internet companies giving way to sober demands for bottom-line results, marketers must get serious about matching their site strategies to the needs of their target customer segments. The first step should be to identify those segments that do (or could) make up the audience of a site and to tailor its value proposition or consumer experience accordingly.

Our research suggests that current active on-line consumers fall into six segments: Simplifiers, Surfers, Bargainers, Connectors, Routiners, and Sportsters. Each segment is defined by the on-line behavior of its members—traits such as the amount of time they actively spend on-line, the number of pages and sites they access, the time they spend actively viewing each page, and the kinds of sites they visit (Exhibit 1). The challenge is that each of these segments has different needs, so marketers must distinguish among the segments their sites attract and match their site strategies to the needs of the target. Otherwise, those marketers risk attracting unprofitable visitors and alienating the most profitable ones.¹

For marketers whose profitability depends on the number of transactions at their sites, Simplifiers are the most attractive consumers, since they account for more than 50 percent of all on-line transactions. But Simplifiers are challenging to serve and easy to lose, for they want ease of access and end-to-end convenience. Simplifiers like readily available product information, reliable customer service, and easy returns, and they respond positively to any evidence—conveyed through advertising or on-site messages—that it is easier or faster to do business on- than off-line. They dislike unsolicited e-mail, uninviting chat rooms, pop-up windows intended to encourage impulse buys, and other features that complicate their on- and off-line experience. Few sites give Simplifiers everything they want: other research we have conducted shows that even heavy on-line shoppers think that off-line customer service is better than its on-line counterpart. Amazon.com’s one-click ordering process is a good example of a feature designed for Simplifiers.

Surfers account for only 8 percent of the user population but for 32 percent of all time spent on-line—far more than any other segment—and they access upward of four times as many pages as do average users. Surfers use the Internet for many reasons (for example, to explore, shop, find information, and be entertained) but move quickly among sites, continually seeking new on-line experiences. To attract and, more important, retain Surfers, a site must offer a strong on-line brand, cutting-edge design and features, constant updates, and a rich variety of products and services.

Bargainers care mainly about getting a good deal. Although they make up just 8 percent of the active on-line population and spend less time on-line than average users do, they generate 52 percent of all visits to eBay, the busiest auction site. Other favorite sites include uBid and Priceline.com (two other auction sites) as well as the financial-information site Quote.com. Bargainers enjoy the search for a good price, control over transactions, and the sense of community that sites such as eBay offer.

Sixty-four percent of all Bargainers have made on-line purchases from standard categories such as books, compact discs, and software.² To get Bargainers to repeat their visits, a site must appeal to them on both the rational and the emotional levels; eBay, for example, devotes an entire section to a newsletter, chat groups, a library, and opportunities to make donations to charities.

Connectors, as their name suggests, use the Internet mainly to relate to other people through chat services such as ICQ and through sites such as Blue Mountain Arts, which permits them to send electronic greeting cards for free. Connectors tend to be novices: 40 percent have been on-line for less than two years, and only 42 percent have made purchases on-line (against 61 percent overall). Connectors are trying to figure out what is available to them and what has value.

Marketers must focus on ways to shape the habits of Connectors so that they graduate to a more attractive segment, such as the Simplifiers. One approach is to help Connectors find their way around the Internet, earning their trust as they go. Readersdigest.com is particularly good at this approach, giving special help to subscribers over the age of 50. The site includes features explaining how users can protect themselves on-line and how e-mail works as well as simple explanations of technology, "netiquette" lessons, and features such as "Create a family newsletter on your PC!" Wal-Mart Stores, Staples, and other brick and mortar-based brands that make their Internet addresses highly visible on packaging, advertising, and mailings have an advantage with Connectors, whose inexperience makes them willing to accept advice from trusted guides about on-line content.

Routiners use the Internet for content—usually news and financial information—and spend more than 80 percent of their on-line time surfing through their ten favorite sites. The Wall Street Journal’s interactive edition and MSNBC’s on-line site are among the most popular sites for the members of this group. The superior and exclusive content of those sites makes Routiners feel like insiders.

Sportsters behave like Routiners but gravitate to sports and entertainment sites. They view content as entertainment, so sites must be fresh, colorful, and interactive to attract them. The popular home page of the sports site ESPN.com, for instance, features sports results, polls, chat rooms, fantasy games, news updates, and radio broadcasts.

Generating revenue from the efforts of the Sportsters and the Routiners to find information is a real challenge. An obvious way of meeting it—though probably the most difficult—is to transform visitors from consumers of free content into paying subscribers. Quote.com, for instance, provides some information free of charge but offers considerably more to the site’s paid-up subscribers. ESPN.com generates significant revenue from subscription fees for its fantasy sports leagues. Other options include the creation of links to transaction-based sites and the use of targeted advertising and promotions to influence the off-line purchasing behavior of visitors.

Whatever approach marketers take, they should avoid trying to span all segments with a single offer and thus diluting the Internet experience so that it appeals to no one, least of all their core segment. They are better off cultivating core-segment customers who repeatedly purchase items of greater than average value. In time, new technologies will permit marketers to display the content and products that most appeal to particular user segments. Ultimately, segments based on demographics will give way to offerings informed by the tastes and needs of individuals.