Yes, you read that correctly: How NOT to use customer demographics in your marketing. In an attempt to make research-based marketing decisions, many small businesses and nonprofits rely too heavily on the copious, free demographic data available today. Relying on numbers without context obscures your view because it invites misleading conclusions and implicit bias. Let’s look at two examples that illustrate the 'data fog' problem, as well as tips to avoid making faulty demographic assumptions about your customers, prospects and communities.
The customer demographics trap
The Google trend line for the increased use of the term “demographics” over the past 50 years is dramatic. A term once used only by professional researchers in government, policy, and large consumer product goods companies, has become commonplace.
Today you are urged to remember that “buyers are people too,” and thus customer and prospect demographics should be relevant for every size and type of organization. But I find many smaller organizations, if not most of them, live in an environment with relatively sparse affordable data for narrow B2B industry sectors, niche nonprofit or advocacy markets, highly specialized or concentrated markets, and so forth. (Many of our change marketing clients work in such markets.)
Surrounded by free 'facts' and statistics on age, ethnic origin and geographic region, it is far too easy to succumb to the pressure to present ‘research-based recommendations’ and simply insert the demographic data you have available, skimming over an important qualifying statement such as “Millennials are more likely to,” or failing to parse through the implications of “Forty percent of Boomers do such and such.” For me, two common experiences highlight the risks of generalizing from demographic data.
Example of trap #1: Age is everything
Millennials this, millennials that… Capturing new, younger buyers, customers, voters, or contributors is a matter of survival and near obsession in many circles. This has lead to a set of unquestioned characteristics and behaviors based solely on age. (Think of how often you’ve heard “computer savvy” or “smartphone” in the same sentence as “young people.”) The risks here are ignoring younger people who are less comfortable with technology, as well as those older people who are. Marketers who thought they could safely ignore social networks or mobile advertising because their community skews older saw a wake-up call from emarketer.com: “Rates of smartphone vs. PC usage the same regardless of demo group.”
Example of trap #2: Rural versus urban is everything
Another readily available but misleading demographic characteristic when used in isolation is geography, especially the classification “rural versus urban.” In Vermont – one of the country’s most rural states -- it can be convenient to discredit unfamiliar communication strategies or media channels as “only working in urban areas” or “only working for large city restaurants.” I heard such statements most recently from a retailer and from a nonprofit organization. Looking at location-based services and monitoring tools such as Google, Yelp, Facebook, and Twitter, it is easy to find the risks in using such a single factor without context.
- There is no longer a significant difference in the use of social media services based on urban-suburban-rural users.
- According to the Pew Internet Center, 83% of arts and cultural organizations say digital technologies have made their audiences more diverse and 35% use location services such as Yelp, Google or Foursquare to interact with patrons.
- If you’re in or near a tourist area or business center, you may miss visitors to the area, as well as active local “super-users” if you continue to assume no one is using such tools in Vermont.
Tips to avoid the customer demographics trap
It’s hardly news that you want to avoid generalizing about your audience based on an isolated demographic factor. What’s new is the ready availability of such information and the pressure you may feel to use it. In future posts I will dive deeper into this subject, but meanwhile here are three tips to help you changemakers lead a concerted effort to make better use of the data that is available to you (imperfect as it may be) or to use low-cost ways to create new data.
- Listen to your existing and your potential customers. How can you mine the knowledge your front-line or customer-support people hear daily?
- Ask your customers what they value most about your product, your service, your organization. Ask if they would refer you to a friend, and if so, what would they say? Ask which friends they would refer you to, and why. (This additional question can yield amazing insights.)
- You and your team may know many of your customers personally. Add psychographic information to the basic demographic information you find. (Psychographics is the study of personality, values, attitudes, interests, and lifestyles.) Rather than search for large numbers of new customers with demographics similar to your existing customers, brainstorm about where clusters of people with similar interests or values can be found.
No single data point guarantees success. But adding context to get a clearer picture of who connects with your organization, and why, will substantially increase your odds.
Editor's Note: This post originally appeared in December 2013 and has been updated for accuracy and comprehensiveness.