Every smart business person knows that studying and analyzing trends should be at the core of any planning process. Sure, we want to know what worked and what didn’t work in the past, so we can shift and adjust our strategies and tactics. But planning and forecasting for the future should be build on trends, not history. The trends will tell us how things are going to change in the future, not what worked in the past.
Some trends are easy to forecast, some harder. I think demographic trends fall in the ‘easy’ category. As the saying goes, you want to fish where fish are biting. It is much easier to succeed where there are lots of growth. And growth creates more growth. It’s a simple demand/supply math. More people, more customers, more clicks, more demand, more supply. And demographics impact all of these.
Demographic trends are easy to get and easy to predict/forecast. Population size, average age, age groups, family size, median income, income groups, education, race, ethnicity, religion, lifestyle. Understanding these demographic trends will help you be in the right place, at the right time, with the right product and service offerings. They also help you choose your target strategically. Clearly, strategic targeting goes well beyond these traditional demographic data….they must also include needs, behavior, and values. But they all start there. For example, when you learn that Gen Z has different set of needs, behaviors and values, you must first understand who Gen Z is and what differentiates them from prior generation. Understanding that this generation tends to be resistant to traditional notions of gender and race should also be part of your demographic trend analysis.
Understanding demographic trends will enable strategic targeting which is essential for growth and sustainability. Ask yourself, when was the last time you revisited your primary target in your planning?
Take NFL as an example, a major business organization in the US….
The NFL has a bigger problem than kneeling players. It’s called demographics and trends. As it turns out, NFL’s rating problems have nothing to do with the recent, controversial kneeling protest that has been politicized extensively these past few months. Ratings have been dropping since 2015. And not just for NFL, but for all sports. As it turns out, the demographic analysis revealed that sports viewership has declined in general, and the age of viewers are increasing which means the same people are watching and getting older. Young people are not watching as much, and if they are, they’re not watching the entire game as older people do. Millennials and Gen Z have different habits and behavior, and they consume media differently. The may binge watch an entire season of a Netflix show in one day or one weekend, but with sports, they’re more interested in outcome and game results than watching how it happened entirely. I’m sure there are many ways NFL and other sports can stay relevant and engage the younger generation. Question is, did they study the trends and trajectories or simply ignored them?
Politicians live and breathe demographics to win an election. But businesses are not caught up with that rigorous discipline. In my recent consulting project for a restaurant chain, after a thorough analysis of their 2 mile radius demographics, followed by sales correlation to each demo, I was able to show who their most profitable customers are, and where they perform better and why. Interestingly, my recommended target was different than who they thought they were targeting with all the marketing efforts and dollars. This happens more often than you think.
Here’s another catch. Some demographic trends are simply hard to accept. People know and hear about them, but they have difficulty accepting them, primarily due to their own past and present biases, prejudices and orthodoxies. This is a major factor that prohibits business owners from tapping into growth opportunities. Take race and ethnicity as an example….
I coined the phrase The New World Marketplace because I felt ‘diversity’ was stereotyped as African American inclusion, and ‘multicultural’ became exclusively about Hispanics in the US. Unbeknown to most, US Hispanics are less than 50% of multicultural/non-white population in the US, but receive 95% of multicultural agency spending (US Census & Migration Policy Institute). It’s not their time yet, some agencies say. Time for what,…..acceptance? Did you know Asians represent 1/3 of Hispanic market in population size (18.2M vs 56.6), but have 2/3 of buying power ($890M vs. $1.3T) with much higher HH income ($78k vs. $42.5)?
That’s just one example of blind spots that many companies have in choosing the right target for their products and services. In politics, I continue to find studies that show despite changing demographics, the political playing field still tilts toward white men. This recent study cites one of the biggest hurdles to be money. “It’s not a talent gap, it’s a financial gap,” reported in the study, primarily due to systematic problems such as campaign finance, recruiting, etc. They say they are neutral, but we know they are not. But, for you and your business to grow and prosper in this competitive marketplace, you have to stay neutral and foresake past biases, prejudices and orthodoxies that prohibit you from future profitable growth.