Why You Can't Ignore Psychometrics in the Age of AI

This week's post focuses on an area that we find is increasingly overlooked or ignored these days with the advent of AI: Psychometrics.

One reason for this is that AI is highly focused on large data sets, which is turn leads to a focus on quantitatively measurable variables such as demographics that are easily projectable to populations at large.

Definitionally, 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.

As an example, let's take a financial services firm wanting to pitch a new investment opportunity to accredited potential investors. It would go about creating content assets such as webpages, landing pages, outbound emails and offers, highly assisted by AI of course these days. It may procure or build a list of potential investors to target with its enticing messages and offers

An area where psychometrics can boost campaign effectiveness is micro-segmenting its target list with psychometric variables. In this scenario, a highly valuable metric would be the risk tolerance profile of the list members.

Layering the list risk tolerance profiles would yield a list further segmented according to their risk tolerances and enable the company to create and pitch different messages and calls-to-action based on their respective profiles. For more risk-verse individuals, the company may design additional steps in the buy cycle to provide additional comfort levels without lengthening the cycle for those who don’t need additional assurances (a caveat here, of course, is doing this while adhering to financial industry regulations on messaging such as "blue sky" laws).

So. what prevents organizations from doing so? The following is a list of obstacles:

1. Lack of awareness and education. Marketing research education of late has focused on measuring more concrete variables. As I stated in a recent post: “Quants rule the world today”
2. Another challenge is validating that survey instruments used are accurately measuring and portraying these variables and that scales and assessments used are valid. In a recent example from a pharmaceutical client wanting to assess risk tolerance for a new drug therapy among potential patients, creating and validating a risk tolerance profile survey instrument and scales that were relevant to the industry and audiences had to be developed, adding significant complexity and time to the completion of the survey. However, for more typical commercial use cases, there are enough measurement scales for values, attitudes and life-style factors developed and validated in the fields of Psychology and Sociology that can be easily adapted for market research application.
3. The assumption among many marketers is that psychometric factors do not play an important role with their target buyers, particularly in B2B scenarios. Yet, most sales training and literature are quick to highlight the importance of emotional factors in even the most objective buying scenarios. Ultimately, it's humans making high impact decisions for their organizations and getting a handle on the emotional and personality factors that come into play with individual buyers or groups of buyers can have a significant impact on sales win/loss rations.

The impact of ignoring psychometrics is that your audience profiling and persona development efforts will therefore not be as rich and robust as they could be, thereby impacting overall effectiveness and ROI from marketing investments. This is particularly wasteful in this day and age when marketing automation tools infused with powerful AI capabilities have become so feature rich and provide easy facilitation for the inclusion of psychometrics. To learn more, contact us at info@siliconvalleyrg.com.

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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