In the past, the business world adhered to the theory of positioning: find a “market segment,” use the “market” as your compass, and eventually achieve success. However, as times change, so do the rules of the game. “User-centric” strategies have emerged as the new winning formula, and “user personas” are one of the key tools in this approach.
But let’s be clear—user personas are not market segments. Market segments belong to a market-centric paradigm. Companies traditionally use them to categorize products or services. User personas, on the other hand, are specific representations of abstract user groups. They are tools within the user-centric paradigm. The distinction lies here: the core of being user-centric is user culture. This approach emphasizes connections among users, shared mental models, common values, norms, and unspoken understandings.
Apple and Xiaomi exemplify user-centric business models. Apple fans (often referred to as “Apple enthusiasts”) eagerly stay up late to watch product launches or camp outside stores overnight to be the first to buy new releases. Similarly, Xiaomi users take pride in being “Mi fans,” enthusiastically spreading the word about Lei Jun’s speeches. This near-religious brand loyalty turns every user into a believer in the brand’s spirit of innovation.
In contrast, brands like P&G’s Rejoice operate within a classic market segmentation framework, focusing on product functionality—such as anti-dandruff benefits. Another example is a Chinese electric vehicle company targeting parents with young children. While this may appear to be a user group, it’s actually a market segment. The product’s selling points—spacious interiors and alleviating “range anxiety”—address specific functional needs of that segment. In a market-centric model, competition often revolves around product functionality, pushing brands to differentiate themselves. But in a user-centric model, product differentiation starts with user culture, emphasizing cultural resonance. Take the smartphone holder in Xiaomi’s cars, for instance—a feature born out of user culture rather than a drive for uniqueness. Even seemingly minor design decisions, such as a car’s exterior, reflect this cultural alignment rather than a pursuit of functional distinctiveness.
For businesses, market segmentation is typically based on quantitative market research, while user personas rely on qualitative user studies. The former emphasizes numbers; the latter prioritizes empathy.
It’s important to note, however, that these two approaches are not mutually exclusive. They aren’t a black-and-white choice. The application of these methods depends on the company’s operating model. Even for user-centric businesses, the concept of market segmentation can still be valuable. Many traditional business theories—such as starting with a niche market for innovation—are rooted in market-centric thinking. These principles remain relevant even within user-centric models.
That said, new business rules are emerging in the user-centric paradigm. Take Dunbar’s number, for instance. A company might start with a relatively small core user group (e.g., 150 people) and gradually expand its user base through deep interactions and connections. In this scenario, an accurate user persona allows the business to truly understand its users, fostering trust and engagement. Clearly, user personas are critical to achieving success in today’s landscape.