Tribes Trump Generations

Marketing Based on Psychographics vs Demographics

Last week I was watching a movie with two family friends, who are 28 and 24. During the movie, generation gaps and the “OK, Boomer” movement came up. Emily (24) told my husband (65) that “Boomer” is a mindset, not an age, and the phrase “OK, Boomer” would never apply to him.

That comment got me thinking about the way we define personas in advertising, and how we group people into clusters to market to them more effectively.

At TEEM, our strategic planning and audience definition process has always focused far more on psychographics than demographics. I’d guess that for every 10 minutes we spend talking about people’s ages, where they live, and their education level or job title, we spend 50 minutes talking about how they think, what they value, and what their buying triggers are.

Let’s take a simple example, and take a look at the impact of psychographics vs. demographics on how we market.

Expectant and new mothers are a hot audience. Brands – selling everything from diapers to baby food to nursery furnishings – do all they can to find, engage, and sell to these prospective customers.

But just knowing that a woman has recently given birth, or where she lives, or how much money she has doesn’t necessarily give you a clue as to what kind of mother she will be. Purchasing decisions around the baby may be driven to a far greater extent by her ethos as mother, or less tangible lifestyle factors.

For instance, if a new mother has a robust personal and familial network, she may get a lot of equipment, clothes, and support outside of purchasing. If a new mother has a mindset that her baby is the center of the universe, she may invest in far more expensive items than her income bracket would indicate. And if a new mother believes in an all-natural, back-to-basics parenting experience, she may not buy canned baby food or plastic diapers, no matter how many ads you show her.

Empathy was the buzz word at last year’s Marketing to Moms conference, and it truly is the most crucial element in cutting through the noise and getting the attention of new mothers.

More and more, generational lines and demographic buckets are blurring. People are naturally segmenting themselves (especially online) by their passions, beliefs, hobbies, and attitudes, as opposed to their age, physical location, industry. These tribal lines are organic, self-selected, and often invisible. But they are incredibly powerful in terms of accurately targeting, influencing, and selling to unique groups of people with similar minds and interests.

One of the great things about this tribal movement is what inspired this post to begin with – age doesn’t necessarily matter!

What does matter is shared belief systems. And really, aren’t those belief systems more indicative of who we want to hang out with and how we want to spend our time? Tribes bond over an authentic shared mindset, regardless of geography, age, education, career, gender, sexuality, or all the other societal and generational dividing lines that separate individual members in everyday life. Danone has shifted their targeting strategy completely to tribes, abandoning the old segmenting tactic of relying on demographics, and it is predicted that more and more companies will follow in their wake.

One of the negative things about tribes is the potential for “group think”… the danger of operating in an echo chamber, surrounded only by people and posts that agree with your predetermined position.

Back to our prior example of new mothers, tribal groupthink and misinformation are responsible for the recent dip of vaccination rates, and subsequent worldwide measles outbreaks. It’s easy to make bad decisions (buying or otherwise) when you are surrounded only with people who believe exactly as you do.

Group think inherently discourages independent thought and accountability. But it does make people easy to find online! Whether you are focusing in on men who eat a macrobiotic diet, Brexit supporters in Wales, or new mothers concerned about car safety for their baby (a great audience for high-end car seats) – you can track them down online by their behavioral and search cues.

Gallup estimates that companies that lean into behavioral insights outperform competitors by 25% in gross margin and 85% in sales growth. Some behavioral economists theorize that up to 70% of decision-making in financial arenas is emotional, and only 30% is rational. We want to believe that we are logical and engage in rational decision-making based on data, but the harsh reality is that our preferences are far more nuanced and anchored in emotion deep in our nature.

The good news?

Treasure troves of data that were never available before now allow brands and their agencies to build a multi-dimensional picture of a person. We can ideally market products and services to audiences who will really appreciate them, and reach new customers in the places they already connect.

By employing tribe-based consumer targeting grounded in qualitative and behavioral data, brands can create new, trusting relationships with lifelong customers who actually want what they are selling.