Sell It to the Psyche

ANN STATES FOR TIME
MIND READER: J. Walker Smith, president of the consultancy Yankelovich, knows why you buy what you do

Hallmark cards prides itself on its ability to translate societal trends into greeting cards. So a few years ago, when Hallmark's marketing group looked into its demographic crystal ball and saw 78 million baby boomers hitting age 50, the company created boxes and boxes of friendship, birthday, anniversary and thinking-of-you cards, all designed to subtly flatter the aging boomer's flagging middle-aged ego. Shipped to Hallmark stores in 2000, the Time of Your Life line of cards was displayed in its own section and featured active midlifers looking youthful as they frolicked on beaches and dived into swimming pools. "We had done a lot of research showing that baby boomers don't want to get old, but that if it's going to happen, they want to emphasize the positive side of aging," says Rachel Bolton, a spokeswoman for Hallmark. But Hallmark missed one tiny yet telling psychological detail: no self-respecting boomer wants to be seen shopping in the "old-people's cards" section. Faced with a choice between regular greeting cards and the 50-plus corner, potential customers avoided the cards as if they were a window display of geriatric diapers. In 2002 the Time of Your Life line was scrapped.

Knowing your customer well enough to avoid costly business goofs has always been an elusive goal of marketing strategists. Standard demographic data age, gender, employment status, income, place of residence are usually insufficient to forecast consumer behavior with any precision. That's why during the past five years market researchers have been developing more sophisticated tools to get inside consumers' heads. It's no longer enough for companies to know you are a 35-year-old white male making $45,000 a year and have a wife, 2.5 kids and a mortgage. To predict accurately what you'll buy and what you won't, marketers these days are more interested in whether you donate to Greenpeace or if you believe in creationism. Says Dawn Iacobucci, a professor at Northwestern University's Kellogg School of Management and editor of the Journal of Consumer Research: "Companies need to know what's on your mind. What's in your heart? What do you really want to do with your life?"

404 Not Found

nginx/1.14.0 (Ubuntu)

The answers, marketers hope, can be discovered through an emerging quasi-science known broadly as psychographics. Market researchers supplement conventional marketing data with informed assumptions about personality traits and human behavior gleaned from other disciplines, including psychology, sociology and probability theory. Using computers to organize and manipulate vast storehouses of such consumer information, they believe they are getting much better at sorting people into categories of like-minded individuals. And once the sorting is done, they are getting better at predicting how people are likely to behave.

A prime example is LifeMatrix, a psychographic-marketing tool launched in December 2002 by market-research giants RoperASW and Mediamark Research (both owned by NOP World). LifeMatrix considers hundreds of personal variables, including religious affiliation and political leaning, and uses them to sort people into 10 basic psychographic categories with jargon-rich titles like "priority parents" and "tribe wired." To each category is attached a battery of personality traits and purchasing preferences. Are you a working mom trying to balance job, family and cultural activities? LifeMatrix assigns you to the category "Renaissance women." But that's not all. LifeMatrix makes some rather intimate and sweeping assumptions about Renaissance women: they're involved, caring and optimistic; they're altruistic rather than hedonistic; they're likely to be heavy Internet users who enjoy museums and eschew radio and TV.

It may sound as if psychographics and the Psychic Friends Network have a lot in common. But LifeMatrix's proponents say the system isn't guesswork. A variety of inputs, including public- opinion polls and media usage, is used to create categories that accurately reflect personality types. Ed Keller, president of RoperASW, says companies applying LifeMatrix to their customer databases will have far greater success in predicting what those customers will buy. Keller says researchers using demographic data alone can correctly guess what kind of car an individual will buy only 18% of the time. But "when you combine people's attitudes, behaviors, life stages and values," Keller claims, "you can predict 82% of the time what car a person will buy next."

That's not to say psychographics is an exact science. In fact, there are numerous companies racing to build and sell tools similar to LifeMatrix, among them Monitor MindBase, offered by the market-research firm Yankelovich, and BehaviorGraphics, a joint venture between Simmons Market Research Bureau and Nielsen Media Research. All use different assumptions and psychological profiles to sort consumers into categories variously referred to as segments, clusters, affinity groups or passion groups and identified by such titles as "shotguns and pickups," "struggling singles," "band leaders" and "succeeders." MindBase, for example, extrapolates from a combination of attitudes gleaned from opinion polls and life-stage data: where you are in terms of marriage, children, home ownership. "Life stage is a much stronger way of looking at demographics," says J. Walker Smith, president of Yankelovich, "because age isn't really a predictor of everything. Knowing someone is recently married with one child is much more telling to a marketer than knowing whether she is 25 or 41."