Do Business Well

Demographics tells who we are. Psychographics tells how we think and what we believe. The latter may be more difficult to predict than the former, but analyzing and understanding these human characteristics is necessary on several levels of marketing.

Northwestern Mutual Life Insurance Company hired the research firm of Louis Harris & Associates to conduct a study of college freshmen who would be the first graduating class of the new millennium. Here are a few indicative results of that survey:

• 77 percent of the students believe strongly that having close family relationships is a key to happiness.
• 61 percent at least somewhat agreed that divorce is an acceptable solution if two people are not happy in a marriage.
• 37 percent strongly agreed that marriage is a cornerstone of social values.
• 68 percent agreed that premarital sex is OK “when two people love each other,” and 64 percent agreed that living together before getting married is a good idea.
• 33 percent said that earning a high salary was a very important part of their careers, and only 26 percent agreed that high job prestige was very important.

These people, by the way, have already graduated, and it will be interesting to see whether their views changed during their college years.

Some of these opinions obviously represent changes from previous generations, such as feelings about premarital sex and living together before getting married. The increase in the percentage of births to unwed women, noted earlier, is evidence of another change in values. Not everybody is comfortable with these shifts, but they cannot be denied. This is part and parcel of the ongoing intergenerational conflicts in the world.

Changes in consumer psychographics are not easy to predict accurately, but marketers have to attempt it to be prepared for the future. They should also understand why these shifts take place.

For example, Census Bureau figures from the early 1990s indicated that 90 percent of young adults expected to get married at some time. The 10 percent share who didn’t expect to get married was twice as high as it was in earlier generations. Why? I would guess that greater economic independence for women and increasing acceptance of homosexuality are the two major factors. People are not as pressured by society to get married as they were in earlier eras.

There are many theories about the changing psychographics of Americans. Several are important for marketing and advertising, and the one I would like to mention is the growing importance of experiences, as opposed to money and material goods. I admit it is a pet theory of mine, but I truly believe it can be the basis of marketing.

What is the better way to motivate employees—offer a $500 color television set or a $500 stay at a spa? Unless you have the only remaining American who doesn’t have a color TV, the spa would always win out. It is a more powerful incentive because it involves an experience.

When people attain a certain level of wealth and material possessions, the only thing they yearn for are experiences. This includes trekking in Nepal, cruising the Nile, renting a villa in Tuscany, white- water rafting, wall climbing, hot-air ballooning, whale watching, bungee jumping, going to Walt Disney World, or anything else in which a person gets involved with an activity.

Isn’t the primary reason people in the upper middle class use illegal drugs the purpose of having a different kind of experience? A millionaire named Steve Fossett spent a good chunk of his money on trying to circumnavigate the globe in a hot-air balloon. He had earlier swum the English Channel and had run in Alaska’s Iditarod dogsled race. The only thing holding back millions of others from these pursuits is that they don’t have Fossett’s money to burn.

The most talked-about television programs of the last couple of years were so-called reality shows like “Survivor” and “Big Brother.” Despite the cheesy nature and low budgets of these programs, the unusual experiences of the participants attracted large audiences, especially the coveted eighteen- to thirty-four-year-olds that marketers lust after.

This isn’t necessarily a new idea at all. Many researchers believe that this craving for experiences is akin to a theory promulgated in the mid-1900s by psychologist Abraham Maslow, who determined that humans have a “hierarchy of needs.” These range from the basics, like food, safety, belonging, and love, to the highest need, self- actualization. When all of a person’s basic needs are taken care of, he or she reaches for something beyond. Today, we might propose that experiences can satisfy that need for self-actualization.

It is ironic that there might be such a sophisticated intellectual theory behind the low-minded television programs, but I bring it up as something for marketing people to chew on as they try to solve the mysteries of an ever-changing consumer universe. Aside from the high-minded stuff, the appeal of these television programs will continue only as long as they can offer push-the-envelope experiences and attract sizable audiences. We can probably predict that the next major step in the world of experiential television will be the offering of simultaneous interactivity to viewers, allowing them to participate in the programs.

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