Demographics are dead: Why personality is more important than postcode
How would you describe your friends? We’re willing to bet that gender, age and marital status aren’t among their defining features. You can’t understand people just by knowing that kind of stuff – you need to learn about their characteristics, their opinions and their personality types. When it comes to your customers and potential customers though, how old they are and where they live, for example, are probably considered pretty defining factors. But so long as your customers also happen to be humans, that kind of data is going to have its limits.
With many companies struggling with online – and offline, for that matter – conversion rates, it’s crucial that they start to understand better what makes consumers tick (or click, as the case may be). While it’s all very well analysing past behaviours to try and predict future actions, it’s a rather restricting approach. If you understood customers like you do your friends, you could actually have a chance to influence their behaviour, and build a pretty good relationship with them in the process.
After all, as VisualDNA’s business development director Ed Weatherall knows, everyone has a desire to be understood – and the consumer is no exception. “Being understood is actually one of the core things that make us human,” he says. “Customers want to be understood and companies are doing all they can to understand them, but the data that they’re using just isn’t working.”
While technology has given us so many additional touchpoints and commerce platforms to help us gather data on and interact with our customers more, it has simultaneously depersonalised our relationships with them. “The relationship has deteriorated slightly,” admits Ed. “With offline relationships people used to react to the person that they met, so they developed a human contact. As humans, we’re drawn towards each other, so if you met someone in the store, then it had a face.
“Online, even though brands may talk about emotional engagement, talk about creating emotional experience, the way they measure and the way they communicate are driven more around function. There are more opportunities to support customers [online] and more touchpoints, but I think most customers see most digital marketing as spam, so it gives you an idea of what that relationship is like.”
If there is a limit to the digital world, it’s right there. No matter how much your business might focus on targeting new customers and building relationships, there is only so far you can get by using traditional data and online marketing tactics. “The underlying data that drives what people receive and when is all based on the device someone used, the last thing that someone purchased, where they purchased it from, the amount of time they spent on the website,” explains Ed. “It’s got very little to do with the human behind that behaviour, or the reason they behaved in that way.
“That’s why I think a lot of these metrics are going down. Businesses are putting lots and lots of money into customer insight, analytics and all of those things, but why then still are we only seeing things like 0.05% click-through rates?”
There is no denying that traditional data has its uses, but we can see here that it also presents us with undeniable limitations. However, if you take this data and the technology that allows you to collect it and throw psychology into the mix, you create some real potential. You can then stop relying on out-dated demographics and start focusing as well on psychographic profiling, and emotive segmentation.
“No single brand owns a demographic,” Ed points out. “You know, not every 25-year-old girl who lives in a certain postcode buys one particular brand – it comes down to emotional connection, or the brand values that connect with that individual.”
This is where traditional demographics really fall down – they’re far too reductionist. “Customers go through demographic groups, but someone doesn’t just become 35 years old and their personality changes. Your personality is what stays true to you all the way through your life; your personality doesn’t change. There may be things you work on or some cultural difference which mean you temper your reaction, but your immediate reaction is still driven by your personality type. So if you’re segmenting people by personality, it doesn’t matter how old they are. And that’s why you start thinking just because someone has moved into a different age group or changed postcode, you can’t just talk to them the same as their next-door neighbour, for example.”
So, learning consumers’ personalities is a long-term investment. That data is going to be relevant for their whole lifetime, and can help inform your business in everything from targeting to predicting and influencing buying behaviour.
One of the main ways that Visual DNA measure personality is using the OCEAN model. “OCEAN stands for openness, conscientiousness, extroversion, agreeableness and neuroticism,” says Ed. “They are some of the key things that help you understand the differences in personality and how different people react in different situations.
“So a good example is if someone is, say, high on the agreeableness scale, they’re much more focused on social proof ethics, much more concerned by society, and their values are driven that way. That’s compared to someone who’s low on agreeableness; they’re much more competitive and tend to make decisions on their own. So people high on agreeableness are going to react more to social proofs – ‘people like you are doing this’ for example, and the ethics of the brand, while someone who is low on agreeableness is going to react better to competitions and gamification.”
It’s clear to see, then, how this deeper understanding can translate into business value. But it can also provide quick, insightful data where there was none before – for new customers, for example. Ed tells us how VisualDNA’s psychographic data has been used in this instance. “We work a lot within credit and risk and banking, where we’ve proven the link between personality and risk. So in that instance, where there isn’t necessarily historical data, we’re allowing banks to lend in emerging markets based on personality types.”
Not your average survey
In terms of how this psychographic data is collected, you can forget tickboxes and written forms or surveys. VisualDNA work purely with online quizzes, and you wont find any run-of-the-mill survey questions in any of them. “It’s questions like ‘if you were an animal what would you be?’, or ‘if you’re taking the morning off what would you do to make the best of it?’, he explains. “So, we don’t explicitly ask the questions [which businesses want to know], but from using our psychologists and our data scientists – and we test a lot of theories – we can then build the psychographic profile behind the [selected] images.”
Images are used for answers instead of words in these quizzes for a number of reasons. “If you look at it from the consumer point of view, it’s very enjoyable, so we have around 80% completion rate of our quizzes. The other thing as well is that when they’re images it becomes harder to lie and it’s a much more emotional answer. If you think about the growth of things like Pinterest and Instagram, those kinds of things, we express ourselves a lot through imagery. If you ask someone a question with words, it becomes a very functional question so you get a very functional answer. If you ask a question with images it becomes a much more emotional response.”
This strategy limits the conscious effort of the respondents to control the outcome, allowing the analysis – and by extension the businesses – a richer insight into the psychology of the consumer. “It can be very difficult for someone to give you an honest answer because they don’t necessarily understand their motivations personally. If you think about it, if any brand asked you the question ‘what’s more important to you, the ethics of our company or the price of our products?’, most people would say the ethics of your company, but will then still go and buy from someone cheaper. It’s not necessarily lying, it’s what they think is more important but when they actually do something, it’s motivated by something that they don’t necessarily understand.”
And if a customer is struggling to understand their own motivations and buying habits, you, as a brand using traditional surveys, have pretty much no hope at all.