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To the census information, some large data companies, such as Equifax or Trans Union, add nancial data derived from credit ows so that they can estimate a household s actual income and spending habits. State driver s license and vehicle registration information is used to determine a person s actual age and the type of car he or she drives. Catalogers data les are used to determine responsiveness to direct-mail offers. Most communities have developed new mover les databases of people who have just moved in. The U.S. Postal Service provides the National Change of Address (NCOA) system, which corrects addresses of households and businesses. By putting all this information together, it is possible to create a pretty accurate pro le of any household or individual if you know the household address. Pro les are used to create customer and prospect marketing segments. You can divide your database into such groups as Teenagers Young marrieds Families with small children Single women Families with college-age children Empty nesters Seniors College students
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Once you have done this, you can check the national average for each category against your own customer database. You can get a picture of the type of person who buys your product and the type who does not. When you know this, you can greatly reduce your marketing costs by trying to reach only the most likely households instead of every household. What can pro les tell you Here are some sample pro ling results in which a company compared its customers to the national average. To begin with, Figure 14-1 gives a pro le by age range. It shows that this company s customers are clustered in the 35 54 age range, with the percentage of customers in this age range being much higher than the national average. Seniors are certainly not avid consumers of this company s products.
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Figure 14-1
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40% 35% 30% percent of total 25% 20% 15% 10% 5% 0%
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company overall national average
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18 24
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25 34
35 44
45 54
55 64
Figure 14-2
60% 50% 40% 30% 20% 10% 0%
Actual Age Range of Customers
percent of file
Under 13
13 17
18 24
25 34
Over 35
These numbers were derived from appended data that re ect the age of the head of the household. The company also asked its customers what their actual age was. The results were quite different, as shown in Figure 14-2. Here the company s customers actually were quite young between 13 and 24. While Figure 14-1 gave the age of the head of the household, most of the company s customers were children in the
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Figure 14-3
30% percent of total 25% 20% 15% 10% 5% 0%
1 r$ 5, 00 0
Income Ranges
company overall national average
1 $ 00
9 2 $ 00
9 3 $ 00
99 0,
9 4 $ 00
9 7 $ 00
9 9 $ 00 $
99 ,0
9 2 $1
9 $ 5 12 ,0
0 10
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household. Conclusion: If you want to know the real facts, ask your customers directly. Appended data do not tell the whole story. What is the income range of your customers Figure 14-3 gives the results from the same company, using appended head of household data. What can we learn from this graph The consumers of this company s products live in households in which the income is close to the national average. Poor people do not buy the products. Those with incomes over $50,000 clearly do. In terms of gender, the company s products appeal more to women than to men, as Figure 14-4 shows. Nationwide, women make up about 51 percent of the population. But 62 percent of the consumers of this company s products are women.
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