Psychographics – understanding trends and patterns in human behavior.
While demographics talk mainly about measurable characteristics such as age, income, owning vs renting residencies, etc, psychographics go one level deeper and talk about consumer behaviors. They categorize based on spending patterns, marital status, number of children and several other factors.
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transcript
Austin (00:01):
All right. So I am here with a special guest today. One of our partners here at leaders, real estate JJ Robson. And so JJ is going to be helping us just kind of go through a new category in our segment about market strategies called psychographics. So we’ve been through already demographics. Uh, we’ve talked about, you know, target demographics, synergistic users, stuff like that, but psychographics is another important variable that Warren’s its whole entire lesson. And so JJ has a thorough understanding of this cause he’s been doing this over a decade. So we invited him on to kind of just explain to us what this term means and how we can apply it to our business. So, JJ, can you start with like a thousand foot overview kind of explaining, you know, what are psychographics and how do they differ from some of the other metrics that we use?
JJ (00:47):
Yeah, no problem. So essentially psychographics, if you look at traditional demographics where you know, you’re really looking at numbers to describe the population as a whole psychographics and socioeconomic numbers are really focusing on people, groups and behaviors stages of life those kinds of factors. Uh, and it’s a better way to understand the population. It’s really the next evolution of demographics, of basic demographics that we’re kind of all used to, the companies have been using, you know, for decades. So in, in looking at that, you know these socioeconomic factors will typically take into account things like how many kids are in the household are, are, you know, is there a marriage in the household or are they divorced things like that, a household income you know, among many other factors, like even age of the kids, right?
So you have these companies you know, I mean Neil, some Axiom, you know, everyone has their own kind of flavor of socioeconomics. So you’ll kind of, you’ll hear tapestry, which is a brand of, of that. Uh, Axiom has per Sonics I believe, and the Nielsen has prism or Claritas has prison. Um, and these are just, you know, different systems and they have their own names for these types of groups that, that people are, tend to be categorized by. Um, and they’re really just using multiple demographic factors to put households or people into these categories. Um, and really that’s, that’s really what it is. It’s kind of that the next step after basic demographics is really applying multiple variables, not just looking at how one individual thing works, but, you know, how does population meeting income, household size and marital status? You know, for example, how does that all blend together to create more of a type of person that lives in this area rather than looking at every person in that population the same way.
Austin (02:48):
Okay. Yeah. So let’s start, you know, what are some of the most important psychographics? Like how would you kind of rank them in order for what you start to look at and what are the, what are the, like, let’s just go through a couple examples of the most important ones.
JJ (03:03):
Yeah. So, you know, it really depends. Um, and when you say the types they’re, they’re typically divided into groups and then subgroups, so groups will typically have to do with stage of life. Uh, so you’ll have groups that are highly affluent and then you’ll have groups that are maybe up and coming groups that are, you know, they have these trendy names, like for example, golden oldies, right. Which would be really just kind of the elderly populations that maybe don’t have kids living at home. The kids are gone have a fixed income that, that kind of thing, and that, you know, so really there’s really not a, I would say a, a most important, but to the specific business that you’re looking at it could be important to different types of businesses. Right. So if you’re dealing with, you know, a medical facility that, that really is focused on taking care of the elderly, maybe some of those older people groups are what you’re after. Right.
Austin (04:01):
So, yeah. So let’s talk about that. So where are you going to find the term golden oldies? Like, where’s that going to pop?
JJ (04:08):
So, so that’s basically say you’re using a demographics system like SSRI, right. And they have there’s this called tapestry. So that’s their brand of the socioeconomic breakdowns. Um, now that’s just an example. I think that may have been one they’ve done revisions since then, and there are many different companies, so that’s just an example of a term they would use. It’s, it’s typically just a catchy term that you can kind of almost infer just by hearing it, you know, the type of people group you’re looking at. And so what you would do is run a report essentially on an address or an area, or you can do a shading map that really tells you okay. If I select this people group and it would just be in a list of, of, you know, 70, some people groups I can select that people groups see where they’re at on the map, or I can run a poor report and say, you know, of this population, this percentage of people fall into this category. So really it’s something you’d see as a line item on a report. Um, but then a lot of these systems have, you know, documentation and books that explain what each of these categories really means. And kind of really more of a colorful definition. It’s really kind of taking traditional demographics and, and, you know, making them digestible, you know, to, to, to the average human that isn’t used to just looking at numbers and trying to draw their own conclusions.
Austin (05:29):
Okay. Yeah. So do you have any examples that we could go through of, you know, somebody that we’ve helped find, identify a location where psychographics came into, came into effect and maybe you’re going one way. Um, and then you started examining the psychographics and that helped you identify a better location for the client.
JJ (05:50):
Yeah. So, and you know, this has applications in healthcare and entertainment, you know, retail a of different arenas. Um, so urgent care, for example typically, you know, we would have our, our general market strategy, which is really anchor driven. I know you’ve talked about anchors and other podcasts and, and kind of how those assist in site growth. Um, but in, in really understanding and looking at an area aside from that, you know, there’s been examples. Um, you know, so we had, we had a guy in New Jersey in New Jersey is very dense and somewhat complicated depending on the area you’re looking at. Um, and we basically had had, you know, had our sights set on the site. And then we, we take a look at the site graphics as one of the things that we look at. Um, you know, as we dig deeper into a site, typically on a high level, we’ll look for things like, you know, population density population per specific kinds of competition and categorical competition.
But then when we get into further diligence, we’ll understand, okay, well, if this site doesn’t really have a lot of the people groups that your portfolio analysis unveiled and that, and, you know, taking a step backward, you know, that’s how we would typically you know, get, get to this point of knowing what kind of people groups we’re looking for. We’ll take their locations. I think they have like 12 locations and we took all of those locations and really tried to understand after doing an analysis on them, higher performing sites, essentially doing a type of regression model where we’re looking at their higher performing sites, trying to understand what people groups appeared the most or were the highest occurring. Uh, and then from there, you know, really target those types of people, groups. So really for us, you know, we understand just from our experience and our research that, you know, the older populations, aren’t a high user of urgent care traditionally. It was found that, you know, this area had essentially a lot of those, you know, if you want to call it golden oldies type of people in that area as a core, you know, that’s not essentially great for us. Um, we’re really typically looking for those young families, the soccer moms, if you will, right. Which is, which is another sub-grouping of those categories that a lot of these can fall into. Um, and so, you know, we, we diverted attention from that site and found another site in an area that was somewhat nearby but had all the right ingredients as well as a good makeup of those target people groups.
Austin (08:25):
Okay. Yeah. No, that makes sense. So, and then I think to help clarify it, help some of our listeners to understand a little bit better, like when, in this example, looking at the golden oldies as a, as a psychographic, you know, it’s, I understand how that relates to their age directly, which would fall under the demographic category.
So just based on someone’s age, that would be a demographic. So how, like, what is the difference between somebody who’s just, you know, a baby boomer or whatever agency is for golden oldie, what’s the difference between going from categorizing that as a demographic to a psychographic?
JJ (09:00):
So again, it takes several, several things into account. Um, so you know, for example, someone who fits into this category, and again, I’m not, I’m not dictating specifics on this this is, this is just, I’m just giving an example for explanation. So, you know, say for example, yeah, right. You know, you’re going to have the old older population and that’s just strictly based on age, but what what it also takes into account engine in conjunction with age is, you know, median income. So if their median household income is lower, you know, we can assume that they’re likely on uh, you know, some type of social security, maybe a fixed income, right. Uh, if they have no kids living with them or their household is just two people, they’re basically approaching retirement age, if, if not, you know, retired as opposed to, you know, and if, you know, for example, if, if they’re divorced and it’s just a one person household, then we understand that they may not fall into that goal. MozCon they may fall into a, you know, an elderly single category. Right. So they’re using, you know, age, in addition to other demographics, we’re able to further refine and qualify you know, households into, into these groupings,
Austin (10:15):
Essentially psychographics can further differentiate between the demographics that you’re looking at.
JJ:
Yes.
Austin:
So you’re able to more accurately pinpoint,
JJ: (10:22):
Right. Exactly what you’re looking for. Yes. So in that example, it’s, it’s, you know, we started with age as kind of our broad category, and then you further refine it based on the other variables.
Austin (10:32):
And so, you know, in the example that you gave working with urgent care, what was the end result?
JJ (10:37):
Uh, you know, like I said, the end result was we essentially stopped focusing and pursuing the site we were looking at and, and went to a site that was basically kind of in the same region that we had targeted for growth, but we were able to really just, even by moving, you know, a mile down the road or into just the next retail trade area have a more, you know positive representation of these numbers that were more important to that particular urgent care based on the previous studies that we’d done.
Austin (11:09):
Yeah. And I think that’s super important because, I mean, you know, these are a lot of times these demographics and psychographics and metrics that you use are not commonly thought about. It’s not very, it’s not like it’s common sensical per se. And so you could open up a location wherever, where the demographics make sense, and the trade area makes sense, but you’re not performing as well as you expect it to perform. And you’re sitting there, you’re kicking yourself, right? Like you’re trying to do more marketing and you’re trying to hire better staff and all along, if you had identified a better psychographic area for your practice, you could have shortcutted all that headache to get a more profitable location, you know, a location that has it seemed more patients, you know, has higher patient flow and that’s why it’s important. And, and, and really a lot of it comes down to, you know, none of these things really guarantee success, right? There are so many X factors related to the operation of the business. You know, how efficient is the flow? How good is the marketing, you know, we try to do, and really the site selection portion, all it’s about is trying to, you know, give the business the best chance of success it can have, right. Based on the site location, you want that to be very strong and you have a great foundation to work off for the rest of your business. So, you know, and, and you look at socioeconomics have really done a lot to kind of modernize that the old world or the demographics. Now you could say, you could argue that the further evolution of that is mobile foot traffic.
JJ (12:32):
Right. And you could hear a lot about people looking at mobile foot traffic. Um, I tend to, I tend to think that that still has a ways to go before it really kind of reaches peak efficacy, where you can really depend on it, you know, as it relates to site selection, just because someone’s driving a certain way, doesn’t mean that, you know, it, it, it, they are the type of person that is going to stop, even though a lot of it is based on traffic. So I think the future of socioeconomics will be combining that with traffic data to understand where are the people that are important to you actually going. So I guess if you’re looking down the road kind of where this evolves too, I think there’ll be a lot of that in the future.
Austin (13:10):
Yeah. That’s good. So at the time of this recording, you know, it’s not something we’re mid 20, 20, not something that we need to worry about right now, but maybe down the line, that’ll be something that we look at. So yeah. Well, this is great, JJ. Uh, thanks for coming on. We appreciate having you. Yeah, absolutely. And we hope you guys tune in and stick around for the rest of this season
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