Demographics

Everybody talks about "demographics" but do they know what demographic variables really are? "Demographics? is a term in the marketing literature that has gotten so generalized as to be bland beyond belief. I blogged about the term "demographics" December 30, 2008, so it's time to do it again.

The term comes from the science of demography a branch of the social sciences with studies the nature of and changes in populations. Demographic analysis focuses on the following variables: the birth rate, the death rate, and net migration. They also incorporate other variables such as age at marriage, socio-economic status, social practices, attitudes and norms, etc., in trying to understand demographic phenomena. But these three variables are the key independent variables in a demographic analysis.

You can go on talking about demographics, which has been taken to mean "personal characteristics," but just be clear about what you mean. But also realize that demographic groups don't buy products. Interconnected individuals in networks buy products.

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The Big Kahuna, or, Michael Gerber's Second Standard: Who is my customer?

This is the big kahuna. The whole enchilada. The 800# gorilla in the room. Here's what he says on p. 155:

Every business has a Central Demographic Model. That is, a most probable customer. And that customer has a whole set of characteristics through which you can define him--age, sex [we call it gender], income, family status, education, profession, and so forth.

Demographics is the science of marketplace reality. I tells you who your customer is.

I cannot stress more how right Gerber is on this issue. If the customer is king, knowing who the customer is, is paramount.

Of course, we don't think quite this way anymore. What he means by "demographic" is really "customer characteristic." Somebody a long time ago heard the term "demographic" and started it and everybody jumped on the bandwagon. Gerber jumped on the bandwagon.

Demography is the study of the composition of and changes in populations over time. Historical demography, one of the sources of my intellectual property, is the study of those things in the past. Demography is that discipline from which "demographics" became bastardized.

There are only a three real demographic variables: births, deaths, and net migration. Demographers also study age at marriage, age at first birth, fertility, fecundity, as well as all those other things we now call "demographics." But no worries: common parlance now is "demographics" so that's what we use.

But no matter what you call them, the most important thing to understand is who your customer is. If he's 64, married C-level, major corporation executive living in Manhattan, that's one thing. But if she's 25, unmarried with a 10 year old son, living with her ex-boyfriend's parents in a trailer on the outskirts of Aho, Arizona, and working at the local Wal-Mart, it's something different.

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Demographics

the term "Demographics", a corruption of the term "Demographic Characteristics" is pretty much poorly understood in most marketing literature. Take this from Wikipedia, the free, on-line encyclopedia:

Demographics or demographic data refers to selected population characteristics as used in government, marketing or opinion research, or the demographic profiles used in such research. Note the distinction from the term "demography" Commonly-used demographics include race, age, income, disabilities, mobility (in terms of travel time to work or number of vehicles available), educational attainment, home ownership, employment status, and even location. Distributions of values within a demographic variable, and across households, are both of interest, as well as trends over time. Demographics are frequently used in economic and marketing research.

"Demographics" comes from demography, the study of the composition of and changes in a population. Strictly speaking, there are only 3 demographic variables: birth, death, and net-migration (in-migration less out-migration). These are the only ways that populations change. Most of what is called "demographics" should be called "socioeconomic characteristics.

But, we now have this term and entrepreneurs have to think in terms of the characteristics of the users of their product. But whether you call the characteristics of people "demographic" or "socio-economic", you have to pay attention to them. Are they young, old, etc., rich or poor, healthy or infirm? I saw a note on a door in my 100-year-old father-in-law's apartment that said "Leave the paper in the bag, not on the floor." There was an arrow to a plastic bag hanging from the door knob. I wondered at first why not just pick it up. I quickly realized that the residents probably had a lot of trouble stooping. Duh.

So, is your product designed for elderly? For example, are you marketing a devise that allows elderly users to communicate with emergency services if they've fallen or otherwise are unable to get to the phone? Well, you'd better watch some of them use it so you understand how to make it better suited to people who have more constraints placed on them by their deteriorating physical condition.

What do you think about this? Does this mean anything to you? I'd like to know. And post a comment.

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