Database Marketing Trap: Income vs. Life Stage

One trap that is easy for businesses to fall into, when it comes to data: Don’t focus your data processes purely on demographics. Being too driven by demographics can be detrimental to your data analysis and target marketing.

Data analytics show us time and time again that lifestage is the key that drives discretionary spending and budgetary requirements. If you know a households’ lifestage, you are far better off than knowing their income.

If 2 households have a 50 year married couple, with a $100k household income, on the demographic profiling scale these households are equivalent.

Let’s take a closer look by evaluating their lifestages:

Couple 1- had 2 kids very early in life, and moved into their home when the kids were born.  These children have already graduated from college, and this couple’s home is about to be paid off.

Couple 2- married late, had children late, and now they have 2 kids in private school, and are in the midst of saving for college. They spend their evenings attending kids football games and gymnastics classes, and have a never ending cash outgo for kid related activities.

Wow, how different are these two households in terms of discretionary spending? Completely! Couple 2 has a woman who is busy going to kids events, and has a stressed cash flow. Couple 1 has a woman with time and money on her hands to go to the spa and shop for herself.

Effective marketing to these two households is not driven by income or geographic location, but by lifestage!

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