What lies beneath: today's consumers no longer fit into yesterday's molds. Here's how to get a grip on the new demographics—and get inside your customers' heads

Entrepreneur, May, 2005 by Chris Penttila

Sunlight Saunas, a 5-year-old Lenexa, Kansas, company that makes saunas that retail for between $1,695 and $5,595, separates its customer base into luxury and health markets based on data it gathers from visits to its website and conversations with potential customers. Two different markets require two different marketing messages, says CEO Aaron Zack, 29, who co-founded the company with his wife, Connie, 37, and Jason Lincoln Jeffers, 39.

"A lot of entrepreneurs get caught up in making sales, but they don't understand why and how they're making those sales," Zack says. "When you take the time to understand why and how, you can better take that product to your market." Company sales hit $6.8 million in 2004, and Zack projects sales of $12 million this year.

Demographics aren't becoming obsolete, Chung says--they're just taking on a new role as marketers get smarter in how to apply them. "People have become more interested in the range of data available," he explains. "There are other ways of looking at your customers."

Smith believes consumer attitudes will replace demographics as the basis for marketing execution, and companies will have to incorporate attitudes into their databases the same way they've used demographics in the past. "If you don't speak with lifestyle relevance to your customers, they'll tune you out," he says.

Understanding their lifestyles is crucial to understanding your customers, agrees Amy Jo Gladstone, whose $1 million-plus New York City company of the same name designs and manufactures women's footwear. "Without that, you're just a flat brand," she says.

For Gladstone, 44, understanding her customer is one part intuition and one part data mining. She uses an outside company to gather customer household income, age and other lifestyle information that helps her make marketing and product-design decisions. "[The internet] is how we learn about our customers," she says. "It's much more alive than an old [demographics] list."

The Age of Genergraphics

Understanding the influence one generation has on another will be the key to successful marketing in the future, contends Phil Goodman, president of market research and planning company Generation Transitional Marketing in San Diego. He's the creator of "Genergraphics," a method of marketing to customers of different generations by taking into account their generational mind-sets.

The internet, Goodman says, is tailor-made for Genergraphics. Companies will retool their websites using buzzwords geared to each of the major generations: seniors, boomers, Gen X and echo boomers. Customers visiting a company's website will click intuitively on the link meant for their generation, and then they'll see products and services described with generational buzzwords and images that fit their mind-sets.

Goodman claims Genergraphics will triple the chance of making a sale. "People buy different products and services according to their generations," he says. "You're not just wasting space or time on whatever advertising and marketing you're doing. You're gearing it toward that mind-set."