BrainTrust Query: Adding Psychographics to Your Demographics
Through a special arrangement, presented here for discussion is an excerpt from a current article from Insight-Driven Retailing Blog.
At Crosstalk, Oracle Retail’s user’s conference, renowned wine guru Gary Vaynerchuk told the story of researching a first-time wine customer and finding out he was an avid Chicago Bears fan. To thank him for his first purchase (which was fairly large), Gary’s team sent the man an autographed jersey they bought on eBay. So impressed, the customer said he’d only buy from Gary’s wine store.
Progressive auto insurance offers customers the option of installing a device in their cars called the Snapshot. It records driving habits such as hard braking, quick acceleration, and speed driven for a set period. Based on the data collected, Progressive can offer good drivers up to a 30 percent discount on their premiums.
What do these two seemingly unrelated stories have in common? In both cases we’ve moved beyond demographics and looked more closely at individual traits, like loving a sports team or a having a particular driving style.
Demographics — such as white, male, age 35-45, married, employed — can help with targeting at a gross level, but to continue moving the needle we must incorporate psychographics — such as college football fan, mountain biker, boy scout leader and fiscal conservative. Today’s population shares personal information via social networks, and tomorrow’s population will continue to be less concerned about privacy.
This presents an opportunity for marketers to collect activities, interests and opinions that help hone marketing, which benefits both retailers and consumers.
Today, technology can process so-called “big data” to create profiles that contain both demographic and psychographic data about consumers. In many cases, consumers will give up this data voluntarily in exchange for a better shopping experience.
Retailers need to start extending their CRM systems today to house such information so they are able to compete as shopping gets more personal.
Discussion Questions: What’s the likelihood that marketing will increasingly move beyond demographics to build campaigns driven by psychographic data? What are the challenges of making that transition?