David Allison's Valuegraphics System - Defined!

David’s background is largely in Real Estate development, where he spent a lot of time analyzing trends in what people wanted in order for the developers to create the right spaces. What he found was that traditional beliefs about what millennials wanted actually interacted with the same things that boomers had wanted. However, further research led him to discover that neither of these groups want to live in a space completely surrounded by people in their own demographic. Instead, they wanted to live in spaces with people who share their same values. This caused him to look deeper into how we look at demographics and he found that you can cross demographic lines by looking at what people value as opposed to traditional demographic measures. They did 40,000 surveys to find how values affect buying patterns around the world in all spaces, not just real estate. They can use this data to follow particular audiences based on value demographics rather than age-based demographics.

The result of this research gave birth to a new category: Valuegraphics, a system that allows marketers to determine how groups are going to behave based on their shared values. Currently, Demographics can describe a group, Psychographics can describe how they have behaved until today, but Valuegraphics can tell us what people will do tomorrow.

What David likes best about the idea of Valuegraphics is that, while most measures spend time showing us how we are all different, Valuegraphics is dedicated to showing us how we are the same. This is important, of course, to the world as a whole, but it is also important in changing the way we look at people in terms of marketing and in communicating. For example, Baby Boomers only agree with each other 13% of the time, Millennials only 15%, and Generation X’ers only agree with each other 11% of the time. Therefore, as a marketer, if we are trying to target Baby Boomers based on what we are told about their demographic, we only have a 13% chance of getting them to do what we want them to do.

To put this idea into context: we as humans only agree with one another 8% of the time. Therefore, by targeting Millennials only, we are only getting about a 7% lift on ROI vs simply throwing out any random marketing that comes to mind.

David believes that Demographics are held up as a very valuable system in society because they are based on an idea that once had much more validity. When societies were more segregated from each other and gender and age roles were far more defined, social pressures were greater and therefore caused us to act more as was expected of us (e.g. Downtown Abbey). He says that now technology has considerably flattened that curve. Basically, we are now more similar and alike than we have ever been in the world. That said, businesses are still meeting in boardrooms and discussing how demographics can be used to determine plans and actions for the future.

Across 380 categories that David’s group surveyed the most agreement that they could achieve among members of the same demographic was between 13% and 15%. However, when looking at value-based articulations of groups and layer that on top of a demographic audience, they found they get between 76% and 89% alignment within a group! He used the specific example of a group classified as ‘The Adventure Club’, a group of people who are constantly seeking out the newest and greatest experiences that they’ve never had before. This group had 89% alignment across the 380 categories. Therefore, as a marketer, there is a significantly higher ROI in using Valuegraphics over just Demographics.

With all of this said, David is not telling people to throw out all of the plans and business models they have created around Demographics, instead he says that Demographics are still absolutely valid but they should not define an audience based only on Demographics. He says that instead they should layer Valuegraphics on top of Demographics in order to get the absolute best ROI out of their marketing dollars.

David’s book “We Are All the Same Age Now” lays out the top 10 groups based on Valuegraphics data. He includes quizzes that marketers can administer to prospective audiences (via Survey Monkey, etc.) and it provides a key to determine which category they fit in. This provides marketers a high-level method of incorporating Valuegraphics into their marketing. While the book only scratches the surface of the value gained by utilizing the full suite of data (based on hundreds of unearthed value groups) it provides marketers enough data to begin layering Valuegraphics data into their marketing in order to boost the ROI. If a company chooses to use the paid services of David’s organization, they can expect to gain access to swaths of deeper data files and therefore should be able to apply them in order to significantly multiply their returns.

David admits that many companies tend to assign a set of ‘values’ to their organization without truly setting deeply defined values that typically make up each of us as human beings. He defines a value as something that each of us has inherently adopted into our lives. The way we look at relationships, at money, at experiences and all aspects of life are governed by our deep-seated values. Some deeply value loyalty and define themselves by that value, others value religion as their core value etc. The values (40 values are defined by the social science world) typically govern how people make buying decisions so that they are aligned with who they are and who they want to be. People tend to stay so true to their core values that the data David and his team have collected tends to have extremely low error rates (3.5%) and has 95% confidence in the results.

In the end, David and his team have found that the traditional rationale for targeting audiences based on their age group is an increasingly outdated model. At the same time, people are becoming more alike across lines of values rather than traditional demographics and by creating plans and campaigns based on Demographics, those companies are increasingly excluding large portions of their potential audience while significantly undercutting their ability to get the most for their marketing dollars. Marketers have a lot to gain by incorporating Valuegraphics into their work so that they can both increase their current ROI and get ahead of what seems to be an ever-growing change in the way people live, act, and consume.

Written by Claudia Palomino