Life Style Marketing

The Mind of the Affluent Consumer: Intrapersonal Conflict

Durkheim proposed that society imposes restraints that limit the behavior of individuals. This proposal was part of the rationale for believing that society has a reality independent of the wills of individuals.

We have just completed a review of our data from this perspective. Our surveys ask affluent consumers to rate the relative importance of almost 2 dozen motives related to the acquisition of discretionary goods and services. One statistical group of these "personal drivers" describe how important a purchase is to, in effect, "being oneself." The two other group of persoal drivers describe (a) various types of feedback that a person might get from others and (b) reactions the individual might have to that feedback.

In a stratistical test that observes the relationship among these various personal drivers it was determined that there are signficant negative relationships bewteen satisfying a driver related to "being myself" and the majority of drivers related to feedback from others and the response to that feedback.

We interpret these results that Durkheim's premise is correct at least to the extent that a consumer anticipates how others will react and how the consumer him/herself will respond to that feedback.

The implication for merchants is to recognize that each potential choice of a good or service carries with it a consideration of others reactions. Anything that can be done to mitigate anticipated negative feedback, or the impact of that feedback, will be useful. (This phenomenon is also related to the issue of "avoidance of regret" mentioned by Thaler in his research.)

Our next step is to look at consumer preferences in brands in light of their sensitivity to feedback from others. One interesting note is that the personal driver of "show good taste" was not in opposition to any of the drivers associated with "being myself."

Customer Capital and Quasi Rational Marketing

The information in this blog entry summarizes new information about what individual customers value in a firm's products and services. This information (called "customer capital") will be used to calculate the value of customers on a much more accurate and actionable basis .

For some time sociologists have known that affluent people purchase discretionary goods and services for symbolic as well as practical value. Some have argued that the primary value of these goods and services is their effectiveness in communicating status. The benefits of these insights have been available to marketers of luxury brands in the form of marketing consulting and/or market research.

Economists have also studied luxury goods and recognize that these goods provide "utilities" in addition to their functionality. Economists recognize the importance of "personal taste" in influcing these decisions at the individual level. As a result they have not attempted to measure the decision making process of affluent individuals due to the lack of reliable "preference" metrics. In this case "reliable" means metrics that are repeatable over multiple purchases and are applicable across multiple product categories. The classic economic problem might be identifying and measuring the preferences of individuals for using the same amount of money for the purpose of making a down payment on an automobile versus taking a vacation. Some economists (Richard Thaler, for example) refer to this type of decision as "quasi rational" since factors other than economic play such an important role.(https://www.russellsage.org/publications/quasi-rational-economics).

We are very pleased that our research regarding "personal drivers of consumption" may provide a set of preference metrics that economists can include in their designs. These preference metrics claerly differentiate the "tastes" of individuals and correlate with spending behavior across multiple product and service categories. We are looking for a University that would like to have access to our data base. And we are working with several clients to help them achieve the benefits of what we may call Quasi Rational Marketing.

Increasing Revenue Per Email (RPE) by 500%

Recent applications of PRI-STAT(TM) LifeStyles to CRM emails for a major retailer demonstrated a significant increase in revenue per email versus a control group.

PRI-STAT increased "Open" rates by 74%, "click through" by 368% and conversion by 336%. The combined result was an increase in RPE of 514%.

Learn how you can achieve these improvements, GUARANTEED. Email Richard.Baker@PremiumKnowledge.net for a white paper.

IT’S FIT, NOT FREQUENCY, THAT COUNTS

PRI-STAT™ is a new approach to marketing to the affluent. It is a complete and integrated platform based on research and proven effective by measured application.

PRI-STAT is based on a different way of thinking about marketing to the affluent and requires some explanation. It requires shifting perspective from a mechanistic view of the consumer (“triggering needs,” “frequency of response,” etc.) to a systems view of the consumer (inputs and purchases must mesh with an existing system each consumer already has). Put simply, affluent consumers only purchase products and services that “fit with the stuff” they have already chosen. The totality of this “stuff” (as Dave Carlin called it) is a LifeStyle.

When you look at affluent consumers’ behavior from this perspective, a whole new set of opportunities develops. First, you can detect patterns in past purchases that you might otherwise have missed. Now the focus is on the context for which the consumer buys not just the frequency or recency of the buy. “Context” is about more than “life stage.”   Context is about meaning.

What PRI-STAT does is provide insight regarding the meaning that the affluent consumer sees and seeks in a discretionary purchase. This insight enables a different level of communications, a more effective form of messaging. (Up to 500% more effective in some cases.)

PRI-STAT creates the basis for a relationship based on meaning and value rather than a transaction based on price.

There are 10 different LifeStyles. Ten different patterns of meaning. In future newsletters we will give examples of each LifeStyle and how it drives a different consideration set and a different set of acquisitions. (If you want to read ahead, please visit www.premiumknowledge.net.)

For example, the chart View this photo relates to brands preferred by 4 different LifeStyle when purchasing furniture. As you can see there is a significant difference in actual behavior. Consumers with a “Precise” LifeStyle are almost 2.5 times more likely to buy Baker brand furniture than consumers with the “Me” LifeStyle.

If you are head of Marketing at Baker Furniture, or a retailer carrying Baker Furniture, this insight can dramatically increase the effectiveness of your marketing. Because PRI-STAT can also identify all the individuals (or households) with that LifeStyle in the total U.S. or in a specific market.

Updated Website Launched

Today we launched a totally new www.premiumknowledge.net Please take a look. We are very interested in your comments and suggestions.

The site is designed to provide a quick and comprehensive overview of PRI-STAT, the on-line application of LifeStyle marketing, and the benefits (e.g., 500% increase in response rates) it has delivered for others. There are white papers and case histories available on the site.

We will also be launching a newsletter. The newsletter will provide insights about how to leverage LifeStyle marketing to increase your business results.If you would like to be on the distribution, please leave your contact information on the "contact" page of the website.

Knowledge Base Marketing Now Offers Life$tyle Segmentation

Knowledge Base Markeing (KBM) is a leader in providing direct marketing services to major companies (www.kbm1.com) We are very proud to note that KBM has just included our segmentation system on their AmeriLINK offering.

This means that any AmeriLINK subsciber can easily access and appy LifeStyle segmentation to their marketing opportunity/challenge. For more information contact an AmeriLINK representative at  1-866-
(275-4526.

How to Refocus Your Advertising Dollars

During the last month we have had the opportunity to demonstrate the power of LifeStyle segmentation to make advertising and communications dollars more effectiveDownload Presentation_3Print. The attached presentation shows how the process works. Note the ability of LifeStyle segmentation to predict the purchase behavior of customers. In this case, a furniture store, in terms of what room and what brand each LifeStyle is most likely to purchase. Information like this makes CRM and prospecting messages up to 500% more likely to be opened.