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Demographics – you’ve been brainwashed!

Are you one of the many who think that you can predict customer behavior by demographics (age, income, wealth, location, etc.)?  Sorry to break it to  you… but you’ve been brainwashed!

Confusedbydemographics_2In years past, demographics were the only data available.  So, everyone learned how to use demographics because there was nothing better.  Just about any marketing textbook you open today will have a chapter on how to use demographic information.  It seems like just about everyone in the marketing  profession has been educated that using demographics is the one and only way to go.

But lo and behold, while providing lift over nothing at all, marketers have found that demographics alone did not work very well.  So, enterprising companies recognized the shortcomings of demographics and have built statistical models that improve the usefulness of demographic data.  And those models work better than demographics alone.  A classic example is Claritas’ Prizm Models.

But that’s still not enough… do you know why?  In many (most?) marketing projects, demographics is not a good predictor of customer behavior. 

Demographics don’t predict behavior

Suppose you are trying to sell coffee.  Your target audience, therefore, is coffee drinkers.  While I am sure you could get a PhD in statistics to identify a demographic segment that is 10% more likely than the average to consume coffee, you’d still be wasting a lot of money if you used that model in your marketing efforts.  After all, not all 35-year-old white males living in New Hampshire (or whatever the high value segment) drink coffee.

There is a better way… Do you want to know what really predicts behavior? 

Behavior predicts behavior!

If someone drank a cup of coffee yesterday, the day before, and every other day, the chances that they will drink a cup of coffee today is pretty darn close to 100%.  I don’t care if that person is black, white, green, or yellow, young or old, rich or poor, east coast, west coast, or no coast — the fact they regularly drink coffee is a far better predictor of drinking more coffee than any demographic data or model you can find. Past behavior is the best predictor of future behavior.

Isn’t that a simple concept?  It’s much simpler to use behavioral data than demographic data.  There’s no requirement for fancy models.  There is no intellectual "leap of faith."  If you want to sell coffee, find coffee drinkers.

So, why have we been brainwashed by demographics?  And why isn’t the use of behavioral data widespread?  Until recently, behavioral data was hard to get.  What little was out there was hard to find.  Not anymore.

Today, there are more than 70,000 mailing lists available to you.  I’ve come to conclude there’s a perfect mailing list for just about any marketing application.  Don’t believe me?  Try finding your perfect list using our mailing lists search tool (http://lists.nextmark.com/).  I think you will be amazed at what you find.

Start using behavioral data today… you will impress your colleagues when you show them you are part of the next generation of marketing!

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