The Four Latest Consumer Types
Marketers That Fail to Take Into Account the Diversity of Consumers' Recession Experiences Will Fall Short
A sentimentalist might regard the current recession as a unifying experience for people of all sorts -- a common ordeal that has narrowed the pre-recession differences between those of different classes and conditions. Marketers, who feel obliged to be more hardheaded about such matters, will instead focus on the distinct ways in which the recession has affected various consumer cohorts and will influence their post-recession behavior.
Along those lines, a report released last month by Decitica Marketing Strategy & Research identifies four consumer types that will emerge from the recession, each posing its own challenges for marketers. Marketing strategies that fail to take account of "the diversity of consumers' recession experiences" will fall short, it warns. Based on survey data gathered over the summer, the report says the adult population is divisible into Steadfast Frugalists (20 percent of the population), Involuntary Penny-Pinchers (29 percent), Pragmatic Spenders (29 percent) and Apathetic Materialists (22 percent), with the names giving a quick hint at what each is like.
Because the Pragmatic Spenders have an upper-income skew (accounting for 37 percent of all those with household income of $75,000-plus), the report identifies this group as "the most attractive to marketers." Compared to the other population segments, they "have the greatest capacity -- both financial and psychological -- to willfully resurrect their past spending patterns." But the "Pragmatic" part of their makeup also means marketers have a challenge in getting these people to spend freely. Sixty-nine percent are "highly confident" in their ability to control their spending; 73 percent are highly confident about "resisting the temptation to spend now and worry later"; 59 percent are highly confident when it comes to sticking to a budget.
Appreciating the 'simple things'?
That's not to say Pragmatic Spenders (who also skew older than any of the other groups) have become fans of the simple life. One part of the report's polling asked respondents to say whether they agree with the statement, "This recession has made me appreciate the simple things in life." Among those identified as Pragmatic Spenders, fewer than half (45 percent) agreed that this is true for them, vs. 77 percent of the Steadfast Frugalists and 60 percent of the Involuntary Penny-Pinchers. Only the Apathetic Materialists were less likely to say they've come to appreciate the simple things (31 percent).
"I would venture to guess that many of the Pragmatic Spenders are somewhat conflicted these days," says Val Srinivas, principal of Decitica. "They like the good life, they can afford it more so than others, but they might feel compelled to accept austerity until they feel more comfortable with their finances or until a time when societal values revert back to the way it was in the past." And, despite their comparatively strong finances, their approach to spending is "tempered with caution," Srinivas adds.
Moreover, the recession has made them skeptical about the worth of brand-name goods. Thirty-two percent of Pragmatic Spenders agreed that "I have come to realize that brand-name products are not worth the extra price," putting them second only to the survey's Steadfast Frugalists (49 percent agreed) in this respect. Similarly, 52 percent of Pragmatic Spenders subscribed to the statement, "I am the kind who first looks at prices before I consider other features," again putting them second only to the Steadfast Frugalists (66 percent).
In light of their conflicted attitudes, what sort of advertising might resonate best with Pragmatic Spenders? "These individuals should be receptive to advertising that takes an emotional approach," Srinivas suggests. "In fact, it may be this kind of advertising that is more effective in making them more comfortable about their spending choices." And despite their relative lack of enthusiasm for the "simple things," their self-control as consumers can be a point of contact for advertisers. As such, says Srinivas, "brand alignment with values such as thrift and simplicity may in fact be influential as long as such associations are credible." One plus for advertisers in approaching this consumer segment: Comparatively few Pragmatic Spenders (28 percent) agreed that they're "paying less attention to product commercials and advertising these days."
Paying less attention to advertising
By contrast, nearly half (47 percent) of those identified as Steadfast Frugalists said they're paying less attention to advertising. And that's quite in sync with their general inclination to keep their spending in check. For one thing, they're willing to spend time in the interest of not spending more money than they have to. The report says the Steadfast Frugalists (who are most common in the 40-49 age bracket and scarcest among 20- and 30somethings) "are the most disciplined in their behaviors and seriously committed to self-restraint." In many cases, that was so even before the economy put a premium on such behavior: "It is likely that many of these individuals deemed themselves tightwads even before the recession," notes the report.
And while people of all sorts have been obliged to economize during the downturn, the Steadfast Frugalists positively enjoy doing so. The survey asked people whether they have a propensity for "buying on sale or using coupons and discounts." Not only did 71 percent of Steadfast Frugalists say they "always" engage in this behavior; 87 percent said they "find this behavior satisfying." In both instances, the Steadfast Frugalists far outpaced the other three cohorts. When it comes to "buying store or generic brands," Steadfast Frugalists were just a shade less likely than Involuntary Penny-Pinchers to say they always do this (53 percent vs. 56 percent). But they were in a class by themselves in deriving satisfaction from this behavior, with 59 percent saying they do so (vs. a mere 17 percent of the Involuntary Penny-Pinchers). As mentioned above, a large majority say the recession has given them an appreciation of the simple things in life.
It's no surprise, given these proclivities, that the Steadfast Frugalists "will be the most averse to impulse buying," as the report says. Nor, more broadly, are they apt to be rushed into a purchase decision. By a wide margin, they were the ones most likely to say they always compare prices before buying (78 percent) and that they derive satisfaction from doing so (85 percent). The report describes them as "meticulous in their pre-purchase activities, seeking and processing more product and price information, and arriving at purchase decisions after careful deliberations." Little wonder that the report says marketers "will find this group to be the most challenging."
Make an emotional appeal
Srinivas describes Steadfast Frugalists' information seeking as "largely self-directed and highly goal-oriented," adding that they're very skilled "in filtering out noise and operating with singular focus." And while paying less heed to advertising, they're apt to browse (whether in stores or via catalogs and the Internet). How, then, should advertisers approach them? You might assume Steadfast Frugalists would be most responsive to a just-the-facts, informational approach. But Srinivas points to a reason to believe quite the opposite is true: "I suspect many of the Steadfast Frugalists are skeptical of advertising, and as such discount information communicated through advertising. The way to get their attention is to appeal to them on an emotional basis, and after you raise their awareness level, interest them with facts that they find credible. I realize this sounds counterintuitive -- but that is my hypothesis."
In their current spending (or lack thereof), the Steadfast Frugalists might not look to the naked eye all that different from Involuntary Penny-Pinchers. But this is a case where the constraints imposed by the recession tend to mask some basic attitudinal differences. As the name applied to their cohort suggests, the Involuntary Penny-Pinchers are none too pleased about the austerities they've been compelled to make since the economy got bad. "Their new-found frugality for the most part has been forced upon them," the report says of this group, which is disproportionately at the lower end of the income scale. That dovetails with the observation that Involuntary Penny-Pinchers "are the most severely affected -- financially and emotionally -- by the recession."While 60 percent of the Involuntary Penny-Pinchers say they always compare prices before buying something, barely half as many (32 percent) find it satisfying to do so. And though their finances compel them to keep their spending under control, just 34 percent are highly confident of their ability to stick to a budget. Forty-eight percent say they've "begun to appreciate the benefits of thrifty living as a result of my experience during this recession," but their broader pattern of response suggests there's something grudging about that appreciation -- a quality that makes them a tough audience for marketing messages.
Given this group's disinclination to take pleasure in the austerities they've had to adopt, is there leeway for an advertiser to foster brand loyalty by helping them feel some satisfaction in these money-saving efforts? "I think so," responds Srinivas, "but this has to be done delicately. My guess is that Involuntary Penny-Pinchers don't want to be reminded of why they need to practice austerity. So the way to increase their satisfaction with prudence and self-restraint is to focus more on the outcomes rather than the process, which no doubt many find less rewarding." While Steadfast Frugalists are predisposed to feel satisfaction in their economizing, says Srinivas, "Involuntary Penny-Pinchers may need to be reassured that in spite of their financial situation, they can still derive pleasure and happiness from the simple things in life."
The young and apathetic
While the three other groups have strong feelings, negative or positive, about some aspects of their consumer activity, the Apathetic Materialists live up to the adjective in their label. They're "less perturbed by the recession," says the report, and are "the least changed in terms of their spending habits and future intentions." This is at least partly a function of their age, with the Apathetic Materialists concentrated in the 21-29 and (to a lesser degree) 30-39 age brackets. "It is likely that their relative indifference springs from their life stage -- more younger, single people with limited disposable income at the moment."
They're the least likely of the four groups to say they always buy on sale or use coupons/discounts (12 percent) and the least likely to say they find this behavior satisfying (11 percent). They're also, by far, the least likely to say they always compare prices before buying (7 percent) and take satisfaction in doing so (6 percent). Scarcely any of them are highly confident that they can control their spending (4 percent), resist temptation to spend now (5 percent) or stick to a budget (4 percent). And they're the least likely to say the recession has taught them to appreciate the benefits of thrifty living (20 percent).
Then again, they are Materialists as well as Apathetic. So, while there's been a decline in their tendency to get pleasure from buying things, they still outstrip the other cohorts in this respect. Fifty-eight percent of the Apathetic Materialists say they get a lot of pleasure from buying things, more than double the figure for the Steadfast Frugalists (25 percent).
Better entertain them
In light of this mix of attitudes, Srinivas suggests of the Apathetic Materialists that "in general, they would be more receptive to advertising that is entertaining" than to ads that are chiefly informative. There's not much to be gained with this audience in aligning a brand with the simple life. "I don't think they care much for the simple life," Srinivas remarks. "They enjoy materialistic consumption more so than others."
Finally, the report took a look at whether people in each consumer cohort think the changes wrought on their behavior by the recession (if any) will be permanent. True to form, the Apathetic Materialists were the least likely (21 percent) to agree, "This recession has changed what and how I buy forever." Twenty-eight percent of the Pragmatic Spenders said their buying behavior has been changed forever, as did 52 percent of the Involuntary Penny-Pinchers and 55 percent of the Steadfast Frugalists. Time will tell how accurate these self-assessments are.
(Source: Adweek, 12/07/09)
A sentimentalist might regard the current recession as a unifying experience for people of all sorts -- a common ordeal that has narrowed the pre-recession differences between those of different classes and conditions. Marketers, who feel obliged to be more hardheaded about such matters, will instead focus on the distinct ways in which the recession has affected various consumer cohorts and will influence their post-recession behavior.
Along those lines, a report released last month by Decitica Marketing Strategy & Research identifies four consumer types that will emerge from the recession, each posing its own challenges for marketers. Marketing strategies that fail to take account of "the diversity of consumers' recession experiences" will fall short, it warns. Based on survey data gathered over the summer, the report says the adult population is divisible into Steadfast Frugalists (20 percent of the population), Involuntary Penny-Pinchers (29 percent), Pragmatic Spenders (29 percent) and Apathetic Materialists (22 percent), with the names giving a quick hint at what each is like.
Because the Pragmatic Spenders have an upper-income skew (accounting for 37 percent of all those with household income of $75,000-plus), the report identifies this group as "the most attractive to marketers." Compared to the other population segments, they "have the greatest capacity -- both financial and psychological -- to willfully resurrect their past spending patterns." But the "Pragmatic" part of their makeup also means marketers have a challenge in getting these people to spend freely. Sixty-nine percent are "highly confident" in their ability to control their spending; 73 percent are highly confident about "resisting the temptation to spend now and worry later"; 59 percent are highly confident when it comes to sticking to a budget.
Appreciating the 'simple things'?
That's not to say Pragmatic Spenders (who also skew older than any of the other groups) have become fans of the simple life. One part of the report's polling asked respondents to say whether they agree with the statement, "This recession has made me appreciate the simple things in life." Among those identified as Pragmatic Spenders, fewer than half (45 percent) agreed that this is true for them, vs. 77 percent of the Steadfast Frugalists and 60 percent of the Involuntary Penny-Pinchers. Only the Apathetic Materialists were less likely to say they've come to appreciate the simple things (31 percent).
"I would venture to guess that many of the Pragmatic Spenders are somewhat conflicted these days," says Val Srinivas, principal of Decitica. "They like the good life, they can afford it more so than others, but they might feel compelled to accept austerity until they feel more comfortable with their finances or until a time when societal values revert back to the way it was in the past." And, despite their comparatively strong finances, their approach to spending is "tempered with caution," Srinivas adds.
Moreover, the recession has made them skeptical about the worth of brand-name goods. Thirty-two percent of Pragmatic Spenders agreed that "I have come to realize that brand-name products are not worth the extra price," putting them second only to the survey's Steadfast Frugalists (49 percent agreed) in this respect. Similarly, 52 percent of Pragmatic Spenders subscribed to the statement, "I am the kind who first looks at prices before I consider other features," again putting them second only to the Steadfast Frugalists (66 percent).
In light of their conflicted attitudes, what sort of advertising might resonate best with Pragmatic Spenders? "These individuals should be receptive to advertising that takes an emotional approach," Srinivas suggests. "In fact, it may be this kind of advertising that is more effective in making them more comfortable about their spending choices." And despite their relative lack of enthusiasm for the "simple things," their self-control as consumers can be a point of contact for advertisers. As such, says Srinivas, "brand alignment with values such as thrift and simplicity may in fact be influential as long as such associations are credible." One plus for advertisers in approaching this consumer segment: Comparatively few Pragmatic Spenders (28 percent) agreed that they're "paying less attention to product commercials and advertising these days."
Paying less attention to advertising
By contrast, nearly half (47 percent) of those identified as Steadfast Frugalists said they're paying less attention to advertising. And that's quite in sync with their general inclination to keep their spending in check. For one thing, they're willing to spend time in the interest of not spending more money than they have to. The report says the Steadfast Frugalists (who are most common in the 40-49 age bracket and scarcest among 20- and 30somethings) "are the most disciplined in their behaviors and seriously committed to self-restraint." In many cases, that was so even before the economy put a premium on such behavior: "It is likely that many of these individuals deemed themselves tightwads even before the recession," notes the report.
And while people of all sorts have been obliged to economize during the downturn, the Steadfast Frugalists positively enjoy doing so. The survey asked people whether they have a propensity for "buying on sale or using coupons and discounts." Not only did 71 percent of Steadfast Frugalists say they "always" engage in this behavior; 87 percent said they "find this behavior satisfying." In both instances, the Steadfast Frugalists far outpaced the other three cohorts. When it comes to "buying store or generic brands," Steadfast Frugalists were just a shade less likely than Involuntary Penny-Pinchers to say they always do this (53 percent vs. 56 percent). But they were in a class by themselves in deriving satisfaction from this behavior, with 59 percent saying they do so (vs. a mere 17 percent of the Involuntary Penny-Pinchers). As mentioned above, a large majority say the recession has given them an appreciation of the simple things in life.
It's no surprise, given these proclivities, that the Steadfast Frugalists "will be the most averse to impulse buying," as the report says. Nor, more broadly, are they apt to be rushed into a purchase decision. By a wide margin, they were the ones most likely to say they always compare prices before buying (78 percent) and that they derive satisfaction from doing so (85 percent). The report describes them as "meticulous in their pre-purchase activities, seeking and processing more product and price information, and arriving at purchase decisions after careful deliberations." Little wonder that the report says marketers "will find this group to be the most challenging."
Make an emotional appeal
Srinivas describes Steadfast Frugalists' information seeking as "largely self-directed and highly goal-oriented," adding that they're very skilled "in filtering out noise and operating with singular focus." And while paying less heed to advertising, they're apt to browse (whether in stores or via catalogs and the Internet). How, then, should advertisers approach them? You might assume Steadfast Frugalists would be most responsive to a just-the-facts, informational approach. But Srinivas points to a reason to believe quite the opposite is true: "I suspect many of the Steadfast Frugalists are skeptical of advertising, and as such discount information communicated through advertising. The way to get their attention is to appeal to them on an emotional basis, and after you raise their awareness level, interest them with facts that they find credible. I realize this sounds counterintuitive -- but that is my hypothesis."
In their current spending (or lack thereof), the Steadfast Frugalists might not look to the naked eye all that different from Involuntary Penny-Pinchers. But this is a case where the constraints imposed by the recession tend to mask some basic attitudinal differences. As the name applied to their cohort suggests, the Involuntary Penny-Pinchers are none too pleased about the austerities they've been compelled to make since the economy got bad. "Their new-found frugality for the most part has been forced upon them," the report says of this group, which is disproportionately at the lower end of the income scale. That dovetails with the observation that Involuntary Penny-Pinchers "are the most severely affected -- financially and emotionally -- by the recession."While 60 percent of the Involuntary Penny-Pinchers say they always compare prices before buying something, barely half as many (32 percent) find it satisfying to do so. And though their finances compel them to keep their spending under control, just 34 percent are highly confident of their ability to stick to a budget. Forty-eight percent say they've "begun to appreciate the benefits of thrifty living as a result of my experience during this recession," but their broader pattern of response suggests there's something grudging about that appreciation -- a quality that makes them a tough audience for marketing messages.
Given this group's disinclination to take pleasure in the austerities they've had to adopt, is there leeway for an advertiser to foster brand loyalty by helping them feel some satisfaction in these money-saving efforts? "I think so," responds Srinivas, "but this has to be done delicately. My guess is that Involuntary Penny-Pinchers don't want to be reminded of why they need to practice austerity. So the way to increase their satisfaction with prudence and self-restraint is to focus more on the outcomes rather than the process, which no doubt many find less rewarding." While Steadfast Frugalists are predisposed to feel satisfaction in their economizing, says Srinivas, "Involuntary Penny-Pinchers may need to be reassured that in spite of their financial situation, they can still derive pleasure and happiness from the simple things in life."
The young and apathetic
While the three other groups have strong feelings, negative or positive, about some aspects of their consumer activity, the Apathetic Materialists live up to the adjective in their label. They're "less perturbed by the recession," says the report, and are "the least changed in terms of their spending habits and future intentions." This is at least partly a function of their age, with the Apathetic Materialists concentrated in the 21-29 and (to a lesser degree) 30-39 age brackets. "It is likely that their relative indifference springs from their life stage -- more younger, single people with limited disposable income at the moment."
They're the least likely of the four groups to say they always buy on sale or use coupons/discounts (12 percent) and the least likely to say they find this behavior satisfying (11 percent). They're also, by far, the least likely to say they always compare prices before buying (7 percent) and take satisfaction in doing so (6 percent). Scarcely any of them are highly confident that they can control their spending (4 percent), resist temptation to spend now (5 percent) or stick to a budget (4 percent). And they're the least likely to say the recession has taught them to appreciate the benefits of thrifty living (20 percent).
Then again, they are Materialists as well as Apathetic. So, while there's been a decline in their tendency to get pleasure from buying things, they still outstrip the other cohorts in this respect. Fifty-eight percent of the Apathetic Materialists say they get a lot of pleasure from buying things, more than double the figure for the Steadfast Frugalists (25 percent).
Better entertain them
In light of this mix of attitudes, Srinivas suggests of the Apathetic Materialists that "in general, they would be more receptive to advertising that is entertaining" than to ads that are chiefly informative. There's not much to be gained with this audience in aligning a brand with the simple life. "I don't think they care much for the simple life," Srinivas remarks. "They enjoy materialistic consumption more so than others."
Finally, the report took a look at whether people in each consumer cohort think the changes wrought on their behavior by the recession (if any) will be permanent. True to form, the Apathetic Materialists were the least likely (21 percent) to agree, "This recession has changed what and how I buy forever." Twenty-eight percent of the Pragmatic Spenders said their buying behavior has been changed forever, as did 52 percent of the Involuntary Penny-Pinchers and 55 percent of the Steadfast Frugalists. Time will tell how accurate these self-assessments are.
(Source: Adweek, 12/07/09)
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