Posted: July 22, 2011

Are marketing demographics going the way of the dinosaur? For Jamie Beckland, a digital and marketing strategist at Janrain, the answer is a resounding "yes!" Beckland says in a recent post on Mashable.com, "Marketers have built a temple that needs to be torn down. Demographics have defined the target consumer for more than a half century - poorly. Now with interest graphs from social networks, behavioral data from search outlets and life-cycle forecasting, we have a much better way of targeting potential customers."

I disagree. While this may be great at the 50,000-foot level, for small business owners, just how useful and cost-effective are these new tools and techniques? Small business owners have to address a myriad of challenges every day. Of those, one of the more significant is marketing (and its subset, advertising). All too often small business owners will spend staggering amounts of time and money on marketing and advertising campaigns that do not deliver what they need - paying customers.

No matter how sophisticated any system gets, success still boils down to executing the basics. What is your product; who is your customer; what are the conditions in the marketplace; and what price will you be charging? Once you answer these four questions, you develop the strategies you need to sell your product or service.

The three key areas a business can operate are business to business (B2B), business to government (B2G) and business to consumer (B2C). Each has its own dynamics, decision-making processes and channels that can be used to reach the ultimate decision-maker.

So the important question becomes - Who is making the purchasing decision? In the B2C arena, an appreciation of the significance of demographics comes to the forefront. Beckland's view is that in the days of limited marketing channels and opportunities it was easier to sell and reach customers. Some of us can remember the days of non-cable television (black and white no less), AM radio and, if you were lucky, more than one local newspaper.

The channels were simple and the demographic segmentation of the market by the birth year of the consumer (Baby Boomers, Generations X, Y and Z) was the key way to identify potential purchasing habits.

Yes, technology has changed on many levels and so has consumer behavior and buying habits. Today, grandparents are just as likely to embrace social networks and technology as their grandchildren.

Beckland believes that, along with these advances in technology and changes in behavior, there are more sophisticated (and expensive) ways to determine purchasing habits, and businesses that rely upon the outmoded tool of demographics are behind the times and doomed to failure.

While the tools and techniques he espouses are interesting, the fact remains that, in addition to age, there are quite a few traditional demographic characteristics that can still be used to define a customer and assist in determining both the message and the channels in which it should be placed. Time-tested and reliable demographics such as race, sex, education level, work status, income, marital status, place of residence and, here in Hampton Roads, military status, are still factors that can help a business determine how to reach consumers.

Couple these with psychographics such as religious and political views, sports team affiliation, pet ownership and a whole host of other activities and you will get a more complete picture of your customer.

Small business owners should not let their marketing focus get clouded by new methods and promises. Stick to the fundamentals, execute them flawlessly and grow your business. Once the new marketing demographic systems prove themselves to have a solid ROI, then explore new ways to deepen your marketing.

Jim Carroll is the vice president of small business for the Hampton Roads Chamber of Commerce and the executive director of the Small Business Development Center of Hampton Roads. He can be reached at 664-2595 or www.hrsbdc.org.