The marketing industry comes with a myth attached to it. You’re told to focus on your customer as an individual. You are told to know the individual as well as your favorite shoes, profile them, study their thoughts, find out their wants, and match your advertising accordingly. Except – as the latest idea in economics goes – there may be no individual. There is only group. Or to put it in another way: The individual buys according to what the group says. Knowing more about this idea can give you another handle on how to market your wares. And maybe sell them more effectively.
Identity Economics: It’s The Group That Buys Your Products
Our marketing principles come from traditional economics. Reasoning goes that people have their wants and needs. You’ll sell your product if you find out what those wants and needs are and show your targeted client how you can help him better than anyone else. This way of thinking assumes that the targeted client knows his needs and chooses independently.
Marketing is based on this traditional economic view. Almost every single marketing modality from customer-centric to relationship marketing pivots the customer as an individual. Personalized marketing says draw up a thorough profile of your desired customer – clothes, breakfast, schools, and so forth – so you know exactly whom you’re reaching. Social media marketing tries to forge cozy interactions with the client. That’s what surveys are for! They ask the desired client, “Pray pretty please. What do you want and how can I help you achieve it?” Metrics measure whether or not your customer has bought. If so, supply more. If not, repeat the process.
Only the decision-maker may not be the individual. It may be the group. In which case, your marketing may flounder unless you consider that angle.
Identity Affects Your Health, Wealth, And Success
Sixteen years ago, economist and Nobel Prize winner George Akerlof and professor of economics in Duke University Rachel Kranton, launched their theory of identity economics. The model says that our identity affects our health, wealth, and success – and everything in between.
Identity refers to the different groups that we belong to, such as religious, gender, national, class and so on. People identify with different groups at different times.
How can we relate identity economics to marketing?
People buy according to their group because they want to conform. This makes them feel good and gives them some sort of social status. So they eat what their group does, dress as their group does, send their children to the same schools as the group does, ad infinitum. Kranton and Akerlof concluded: If you want to motivate someone don’t look into every nitty-gritty about the person. Scrutinize the norms of the group.
For instance, I run a site that offers hidden jobs to freelancers. Recently, a person tweeted: “Thanks but doesn’t look secure … this site is flooded w/shady gigs…The site isn’t safe for any legit freelancer.” The visitor explained: “Indians don’t pay well/on time.” (Note: 5% of the ads are from companies that carry Indian names).
Ordinarily, I would have have rejected this visitor’s feedback as prejudiced. The theory of Identity Economics made me look beyond her as being an individual and made me consider her opinion as Group. I looked into whether or not she was my typical client. If so, I would have to reluctantly use her feedback as cue to restructure my marketing because I wanted to sell.
This case also made me wary of using my bounce rate as a metric of site success. Marketing analytics urge you to monitor your site’s statistics. But maybe visitors leave because aspects of your site conflict with their social beliefs. Maybe you retain only two or three people but these are the people you want.
Looking at the prospective client as reflecting the opinions of a group rather than the opinions of him or herself give you a different handle on your marketing.
On The Other Hand…
Identity economics has its limitations. Marketing research recently found that advertising backfires when it scrunches the person into a group. Cases include Jif peanut butter that targets mothers by noting that “Choosy moms choose Jif.” or DirecTV that advertises, “If you call yourself a sports fan, you gotta have DirecTV!” or Gamefly.com that urges video gamers, “You call yourself a gamer? You have to have it!” or when Chevrolet asserts that real Americans drive Chevys.
In each of these cases, those who were surveyed protested that they have a mind of their own. They disliked being lumped into a group!
So, social context is an answer, but not the whole. Our self-concept is made up of both a personal identity and a social one and, when marketing, we can profit by considering both.
How Can You Use Identity Economics To Improve Your Marketing?
- Target marketing to the group – I work for a solar company that markets itself on price and environmental concerns. Research, however, shows that people put solar panels on their homes when other solar-powered homes are nearby. I adjust my marketing accordingly.
- Boost the signal strength – Customers tend to tend to select products that most clearly broadcast membership in their specific group. Subtly highlight those signals or omit them. For instance, blood donation levels go down when blood donors are paid to give blood. The social identity of giving is core to the motivation and this is the aspect that needs to be highlighted.
- Ignore bounce rates – Rather focus on how you can improve your product so that it helps your customers. People are always going to be influenced by their cultures and there’s nothing you can do about that. Focus on the product and keep on marketing. Your clientele will grow.
In short, people buy according to a variety of reasons. Social context is one of them. Knowing how group comes into the buying can open up cost-effective ways of improving your marketing. It is individual as well as group that decides.
Look into both to sell.