In our last post, we introduced the concept of psychometrics and why it is ever important in the age of AI
Briefly, psychometrics is about the WHY behind underlying behaviors and takes into account factors such as personality, values, attitudes, lifestyles, the influence of peer groups, etc. in understanding customer purchase behaviors and decisions.
We dive deeper in today's post to explore the differences between more traditionally known methods of gathering and using demographics in market research versus psychometrics, how we gather data for each, and most importantly, when to use each-what problems in Marketing Research does it help solve.
The table below summarizes the differences between the two:
|
|
Demographics |
Psychometrics |
|
Purpose |
Defines customers based on measurable objective facts about who they are-age, gender, income, etc. that influence their purchase behaviors and decisions |
Scientifically measures values, attitudes, lifestyles and personality characteristics that influence their purchase behaviors and decisions |
|
Data sources |
Quantitative data from surveys, product registrations forms, US Census Bureau data, etc. |
Data from surveys and other sources that use previously validated psychological tests and scales |
|
When to use |
Determining market size Market segmentation |
Message development Product positioning Customer Journey Mapping |
Three additional considerations we should add here:
- You will also hear the term Psychographics. While it also refers to attributes such as values, attitudes, lifestyles and personality, where it differs from Psychometrics is in the data collection methods used which are qualitative methods such as focus groups and individual in-depth interviews. While the results are not projectible to the population at large due to much smaller sample sizes, the value of this type of data when combined with quantitative data is immeasurable in helping to gain a deep understanding of customer motivations.
- Ethnographic research, a technique borrowed from the field of Sociology and adopted for market research, involves spending large amounts of time observing a relatively small sample of customers. Here the objective is not just to understand factors that influence their purchase decisions, but to go beyond to uncover how your products integrate into their daily lives. Typically, this type of research is conducted by observing customers in their homes or places of work, i.e., interacting with your products in their natural environments.
- Last, but not least, an increasingly popular trend, especially among digital products, is to combine these data sources with telemetry data. This type of data is generated from the digital footprints customers leave in their wake as they interact with a company's digital assets including websites, content, landing pages and, where relevant, the company's digital products. These data sources provide context for how customers actually interacted with your company's assets. Recently, the trend has been to combine telemetry data with the above-mentioned data sources to create even richer data sets to understand customers.
And with the power of AI, analysis and pattern recognition from such combined data sets has now become easier and ever more powerful!
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Alan Nazarelli is Founder & CEO of Silicon Valley Research Group. Based in San Jose, CA with offices in Seattle and New York, the company works with the world’s most innovative brands to provide timely and actionable market intelligence and strategic guidance to enable them to make well-informed decisions to positively impact revenues and profits and to achieve their growth targets. Connect with Al on Linked in
