Who Is My Customer?

When we operate a business it’s natural for us to focus on our side of the transaction. This means staying focused on the internal aspects of our company. Items such as inventory, employee stuff, product or service delivery and more. Many times, we see each customer the same, just someone else who recognized our awesomeness and chose us to meet their desires or needs. 

The truth is there is a lot happening on the other side of the transaction. Whether you recognize it or not your business naturally attracts a certain customer demographic. This is because of the product you offer or the way you offer it.  Defining who your organic target demographic is can help you both to better market to that demographic and to recognize opportunities to break out into new demographics.

As a general rule several descriptors are used to define the various aspects of who a customer is. The first is age. As a society we like to break people out into what we can generations. Knowing which generation uses your product or service can determine a lot about how you market to them. Here are the generations that occupy the majority of consumers as they break down by age:

Baby Boomers I
Born: 1946-1954
Age in 2020: 66-74

Baby Boomers II
Born: 1955-1965
Age in 2020:55-65

Generation X
Born: 1966-1976
Age in 2020: 44-54

Millennials
Born: 1977-1994
Age in 2020: 26-43

Generation Z
Born: 1995-2012
Age in 2020: 8-25

The first thing you are going to do by default is to think you know how each of these generations interact with your company or brand. What I can tell you is that you have to look at the research before making a conclusion. Even the Baby Boomer I generation and older demographic are very active adopters of digital technology, cloud-based software and social media. 

The next demographic to consider is that of gender. It’s important to know what your current demographic gender is and how to target the other 50% of the population.  Males and females’ shop, consider and buy in very different ways. Sometimes just your product use has a stronger affinity to one gender or your selling process may be putting off one gender and you wouldn’t recognize it without examining the data.

The third demographic is that of family status. If a person is single or married can have a large effect on spending priorities. A single person may make desire purchases more frequently than need purchases. Marketing to these two different demographics takes a much different approach.

Social class and income are the fourth demographic. Higher income individuals make purchasing decisions differently than lower income individuals. The factors that affect these decisions are financing, interest rates, needs or desires and more. You have to perform the research to determine exactly how different social classes are interacting with your product or service. The social classes are generally defined as:

Upper Class – makes up about 1% of the US population and is generally considered those that inherited wealth or “old money” such as the Rockefellers or DuPont’s as examples.

New Money – makes up about 15% of the population. Includes those whose higher income has only been for a generation or two. These class usually earned their money rather than inheriting it. Examples might be Bill Gates or Oprah Winfrey.

Middle Class – makes up about 34% of the population. Includes those who make their money usually working at professional jobs such as engineers, doctors or lawyers. This group is sometimes also referred to as “white collar” as they generally wear suits or sports coats to work with button up oxfords or business casual attire.

Working Class – makes up about 30% of the population. Includes those who make their money usually in a more technical based job such as electrician, plumber, carpenter etc. This group is also known as “blue collar” as they usually wear uniforms to work rather than suits.

Working Poor – It’s difficult to determine exactly what percentage of Americans make up the working poor category. Its estimated at approximately 20%. This group often works two or more part time jobs and receive no health insurance or benefits. This group is most affected by the economy and is generally “last hired, first fired”.

Anyone below the working poor is considered “poverty”. Estimates state that as much as 13.5 percent of Americans live in poverty. These individuals usually receive public assistance and do not hold regular employment.

Now your first reaction should be “wait a minute if you add those percentages up its more than 100%”. The truth is that these percentages are constantly in flux up and down depending on the economy, season and unemployment rates.  The main point of recognizing demographics is that the majority of business owners will market and price their products “through their checkbook”. This means that If you are a working-class business owner you think that the rest of world is comprised of the rich (small number) and people like you who can’t afford expensive things. The reality is that if you are working class and market to working class people then you effectively disregard the middle class, new money and old money consumers (about 50%) of your potential customers.

The truth is that the best parts of business are found when you target and attract the higher income levels. Parts like quality, profitability and financial gain for the business owner. If your primary marketing message is discounting your prices, then you have missed the upper three income levels all together. They may still buy from you, but you have not appealed to their needs or desires through your marketing at all. 

Race and Ethnicity are the nest demographic. Depending on the type of product or service you offer race and ethnicity may play a part in your consumer behavior process. It’s more likely that part of your marketing or business process is causing you to lose sales based on race and ethnicity. But this is usually a small percentage and has to be identified through research.

Geography is also a demographic and it plays a part in your consumer behavior. A southern consumer is more likely to have a positive reaction to terms like “Dixie” or “southern” than a northern customer. You have to take this into consideration and determine the base geography of your potential customer base. A great example of this would be customers if Florida. While based on definition you would consider them a “southern” demographic the truth is that a large majority of northern citizens move to Florida for retirement. This has to be considered when crafting your marketing message.

Lifestyles are the last demographic that plays a significant role in the consumer behavior process. Consumers are likely to cross demographic lines in other areas based on lifestyle. The way people think about themselves the things they value and the things they like to do will help determine which products or services they prefer. Relationship marketing is a great tactic to identify potential customers who share a lifestyle. An example might be those who drive Subaru cars are more likely to use other “outside” lifestyle brands such as North face or LL Bean. LL Bean could take this information and target their marketing message to everyone who purchased a Subaru. This would make the marketing more effective and produce a higher actionable result from the marketing. Relationship marketing can be very valuable and is identified through research.

All of these demographics play a large part in knowing who your customer is and what marketing message is likely to “push their buttons” based on targeting needs or desires. Preforming the research to determine what you customer demographic is can make your advertising much more effective in the long run.  This also helps to eliminate the marketing gamble in which we “roll the dice” with the marketing message and the advertising channel.