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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."
The psychographics movement is all about building better pigeonholes, and there is no single correct approach. But marketers agree that the old demographics-based categories are defective. "You can no longer use the previous generation as a model for today's generation," says Roger Brown, director of global research for the Principal Financial Group, the nation's largest firm that focuses on 401(k) retirement-plan administration. "Baby boomers are very different from their parents in terms of how they approach retirement. Even within this generation, there are key differences that are forcing us to look more closely at attitudinal and motivational information."