databasics; Head Trips - Yankelovich Partners Inc.'s consumer behavior tool

American Demographics, Oct, 2000

A new way to understand consumer psychology. Anne-Marie Wong, 31, a pediatrician, and Yanik Wagner, 38, a photographer, both live in Manhattan's Greenwich Village neighborhood, just two blocks apart. They share many similar patterns of consumer behavior - both use Colgate toothpaste, own iMacs (one graphite, one tangerine), drink Starbucks coffee, belong to health clubs, and use the Internet several hours a week. To a marketer examining their brand preferences and lifestyles, their consumer profiles would be very similar, and they would be prime targets for identical product pitches and marketing messages.

However, while Wong's and Wagner's consumer profiles are alike, they are, of course, two unique individuals. In fact, when you dig below their superficial spending patterns, it becomes readily apparent that they have widely divergent lifestyles, political and social beliefs, outlooks on life, and reasons for choosing the brands they do. Because of these differences, each responds to marketing messages in a different way. For a marketer wooing them for a particular product or service, it would be more effective to approach them as individuals, not consumer clones.

This is one of the challenges facing traditional consumer segmentation systems, which group people together by demographics, geography, and consumer behavior. "Really getting into the mind of the consumer is obviously the `holy grail' of marketing," says J. Walker Smith, president of Yankelovich Partners Inc. And Smith believes he has come up with a unique tool for marketers in their quest to get inside the consumer mind: Yankelovich's new psychographic segmentation system, called Monitor Mindbase.

There are numerous commercial segmentation tools available to marketers today - the latest EPM Consumer Segmentation Survey lists 60 - which slice and dice the American public into a multitude of classes, categories, and clusters. Segmentation has become somewhat of a cottage industry among market researchers, and the introduction of a new one could be yawn-inducing. However, Mindbase is premised on the idea of segmenting individuals by values, attitudes, and mindsets, rather than by geography, demographics, consumption patterns, and brand preferences. In essence, the program sets the ambitious goal of uncovering the underlying psychology of consumer behavior, on an individual level, in an actionable, database-compatible format. It does this by segmenting people into categories of consumers with varying degrees of materialism, ambition, orientation to family life, cynicism, openness to technology, and a host of other elements.

Marketers have used specialized segmentation techniques to find the most fruitful target audiences since Jonathan Robbin, the founder of Claritas Inc., created the PRIZM (Potential Rating Index for ZIP Markets) clustering system in 1974. Robbin, considered the father of geodemography, grouped people who had similar demographics and lifestyles into neighborhood clusters, on the theory that "birds of a feather, flock together."

A slew of similar programs have popped up to compete with PRIZM - such as CACI's Acorn and SRI's VALS - all based on the premise that people in the same zip code or neighborhood tend to buy the same products, prefer similar brands, and use the same media. VALS (Values, Attitudes, and Lifestyle Survey), like Mindbase, strives to segment consumer psychology, but does so only on a larger neighborhood basis, while Mindbase reaches the individual household level. Smith points out that, "While two families on the same block may appear similar based on demographics, their perspectives of the world around them will influence how they respond to messaging." Understanding these perspectives on an individual level can provide important insight into how and why one person will respond to a particular message while others in the same geographic segment do not.

In creating Mindbase, Yankelovich examined four years of in-depth data on American values and attitudes from its annual Monitor survey - a comprehensive study of American opinions on topics such as government, health, sex, business, and religion, which it has carried out since 1971. From this data, Yankelovich identified eight major consumer groups with shared life attitudes and motivations. These eight groups were further divided into 32 distinct sub-segments for greater differentiation and clarification. "We conduct 2,500 interviews a year for Monitor, which is one of the last door-to-door surveys in America," says Doug Haley, chief knowledge officer at Yankolovich. "Each survey lasts about 2 1/2 hours, so we have really gained some deep insights into the American psyche, and consumer mindset."

Haley believes that while databases devised on a geographic or consumer behavior model are highly valid, "there is an increasing diversity in values among people who live closely together." Further, knowing that someone is a frequent consumer of a product or service doesn't explain the story behind their purchase pattern, and understanding this motivating factor is a key benefit of the new segmentation system. Geographic models can be successful in locating prime targets, while this psychological model can provide guidance in tailoring the right message to the right audience. For this reason, Yankelovich encourages use of Mindbase in conjunction with other segmentation systems, such as PRIZM.