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Psychographics of Hipsters

Psychographics explains Pabst Blue Ribbon's popularity with hipsters
Hipster and Pabst Blue Ribbon

Psychographics of hipsters explains how Pabst Blue Ribbon’s (or PBR) rise and fall is a story of a market finding a product. PBR has been around for 170 years but only in 2008, enjoyed a 6-year boom in popularity (outside of a brief moment in the 1970s).

It is better to find an under-served market and create a product/service for them than wait for a market to find your product/service.

Q: How to Find an Under-Served Market? A: Market Research

There are many sources at your disposal to gain a deeper insight into who your customers are and segments within that market.

  • Ask potential customers: Surveying is a form of primary market research. Ask them how they use their product, and what they like/dislike about it. How long have they used it, is it expensive, how does it make them feel, etc. These questions will give you valuable insight into the psychology of the user.
  • Pose as a customer and visit your competitor’s store/website. Learn how they do what they do. See what they do well, and what they can improve on. Sometimes employees are very happy to share details you cannot find anywhere else.
  • Industry and market research companies such as IBISWorld, Pew Research Center, Audience Overlap Tool, and Statista are loaded with great information. The downside is that they can be expensive. Less expensive options include the SBA’s Office of Entrepreneurship, US Census data, and older reports/white papers.
  • Industry and trade publications for your particular sector are also great sources of information. Some are free, while some require memberships.

So, going back to Hipsters:

Hipsters are known for following the latest trends and fashions while eschewing things regarded as being within the cultural mainstream. Hence the term, “I was into __________ before it was cool.”

So why did hipsters like PBR? To put it simply, it was “retro chic,” and anti-mainstream, and with many people still trying to recover from an economic recession, Pabst Blue Ribbon’s low price point was an attractive option. This brings us to a tool in marketing used to find customer groups: psychographics.

What are Psychographics?

Psychographics are metrics used in market research as a way to divide consumers into sub-groups based on shared psychological characteristics, including subconscious or conscious beliefs, motivations, and priorities, to explain and predict consumer behavior. Any dimension can be used to segment a group of consumers, such as style, variety, availability, price, etc.

Hipsters avoided things that were popular, and some of them were not price-sensitive, so they were willing to consider a range of beers that occupied a certain psychographic zone.

Psychographics of hipster beer consumption - Your Startup Guru
Psychographic of hipster beer consumption

As PBR’s popularity grew, it was departing from the zone of consideration – the region of price and popularity where hipsters were willing to purchase from. Also, as hipsterism became more mainstream, the association of PBR with hipsters caused a self-fueling downward cycle.

A shift in Pabst Blue Ribbon's popularity caused hipster abandonment due to the psychology of the hipster
An increase in Pabst Blue Ribbon’s popularity caused hipster abandonment

How to Use Psychographics for Business?

It is better to find an under-served market and create a product/service for them than wait for a market to find your product/service since you don’t have over one hundred fifty years for your product or service to be found by a market. You can read about more businesses that found a need and filled that need.

Your Startup Guru used psychographic analysis to differentiate our client’s brand from that of their competitors yet stay true to their envisioned identity. Psychographics are used in market research as a way to divide consumers into sub-groups based on shared psychological characteristics. Age (Young vs. Established), Popularity (Unique vs. Mainstream), Price (Expensive vs. Inexpensive), and Style (Function vs. Fashion) was used to find the spaces their competitors occupy, and there might be an opportunity for our client to find an under-served market. In the case of our client, they wanted to stay within a fairly competitive zone of youthful, unique, pricey, and fashionable. However, if a brand wants to target an older, fashion-forward market, then research into the type of prints they like, how and where they wear the product, how the product makes them feel, etc., through surveys, focus groups, and informational interviews will be invaluable.

Swimsuit brand psychographics
Swimsuit brand psychographics

Launch and Grow Your Business

Contact us today to get started on market research and strategies that will help take your business to the next level.

Lipstick on a pig and recession-proof businesses

Lipstick on a pig and recession-proof businesses - Your Startup Guru
Lipstick on a pig and recession-proof businesses – Your Startup Guru

Welp, there’s no need to put lipstick on a pig. Today’s GDP data released by the US Bureau of Economic Analysis showed that real gross domestic product (GDP) decreased at an annual rate of 32.9 percent in the second quarter of 2020, according to the “advance” estimate released by the Bureau of Economic Analysis. In the first quarter, real GDP decreased 5.0 percent.

Chart showing Real GDP: Percent change from preceding quarter

This is really bad news which means figuring out how to mitigate damage and making all adjustments by bootstrapping. Many businesses such as bookstores, farms, and clothing manufacturers pivoted their business models to adapt to the impact of COVID-19.

One thing I learned while working with my client KiloNiner several years ago is that pet products were largely recession-proof during the 2007-2009 recession. This is because people view their pets as family members so cutting back was avoided. There are many other businesses are that recession-proof as long as adjustments are made to accommodate social-distancing requirements:

  • Repair/maintenance services: People will still need their plumbing to work, their lights to turn on, and their car engines to run
  • Dry cleaning/laundry: Laundered clothing and materials will always be needed as long as people wear clothes and don’t have in-house machines. Dry cleaning for clothing might decline as formal wear is reduced but will not go away as people still wear jackets, etc. on occasion.
  • Professional services: Accountants, lawyers, and other administrative professionals are still needed for the economy to run.
  • Funeral/Memorial services: A natural consequence of life is death. Particularly with the unsettlingly high mortality numbers associated with COVID-19, demand will likely be high for a very long time.

There are many more industries and even sectors/value-chain-links within floundering industries that are somewhat insulated from recessions. Your Startup Guru provides industry/market research as well as a wide range of other services for businesses to help navigate this turbulent economic climate.

Contact us and let’s figure out a plan for you.

Old school business model

I just saw a commercial for Rent-A-Center and thought to myself that their old-school business model is nearly a half-century ahead of the times.

Founded in 1974, Rent-A-Center is an American public furniture and electronics rent-to-own company based in Plano, Texas. The company was incorporated in 1986 and, as of 2014, operates approximately 2,972 company-owned stores in the United States, Canada, Puerto Rico, and Mexico, accounting for approximately 35% of the rent-to-own market in the United States based on store count.

A convergence of trends—including the Mari Kondo-sparked enthusiasm for cleaning out closets, increased concern over the impact of climate change, and a movement toward smaller, urban apartments—has made millennial consumers more conscious of how many items they’re accumulating.

Rent the Runway CEO Jennifer Hyman.

As you may know, companies are taking a similar business model and expanding it to other consumer sectors, such as clothing and jewelry. This model has already been applied to transportation with Lyft/taxis/vehicle leasing and with housing with Airbnb/hotels/apartments and intellectual property with game rentals/public libraries. Entering into the fray are companies like Rent the Runway, which rents unlimited designer styles to subscribers, and Fat Llama, which rents electronics (in the UK).

A convergence of trends—including the Mari Kondo-sparked enthusiasm for cleaning out closets, increased concern over the impact of climate change, and a movement toward smaller, urban apartments—has made millennial consumers more conscious of how many items they’re accumulating, according to Rent the Runway CEO Jennifer Hyman.

The spending habits of millennials, the largest single consumer group out there with 83.1 million (a full quarter of the U.S. population), was surveyed. The survey found that the main reason why they rent is to “test things before purchasing” at 57%. This makes sense with money being tight and space being limited, every purchase has to be scrutinized. The results of the survey are shown in the infographic below:

World Economic Forum: This is how millennials are fueling the rental economy

Old-school brands such as Play it Again Sports and Rent-A-Center are riding the boom of the change in consumer sentiment and behavior. Rent-A-Center’s revenue grew $9M between 2018 and 2019 to $2.6B, operating income ballooned an astounding $197M between 2018 and 2019 to $253M, helping net income to increase by $165M to $173M.

Adaptability is the most powerful trait

You have probably noticed the deluge of advertising that is targeted to the new reality of being at home. This is obviously a response to the global pandemic we are all being affected by. The following is a breakdown of what is happening and how your business can harness the post powerful trait: adaptability.

Adapt Through Marketing Strategy Marketing

Aired prior to the COVID-19 crisis but replayed recently Campbell’s realized that people are stockpiling canned food. Set to a wholesome and nostalgic soundtrack without pandering to panic buying, they capitalized on an opportunity to remind customers of a classic pairing. On a side note, the music choice was oddly relevant — Thank You For Being a Friend was the theme song to the ’80s sitcom The Golden Girls and the elderly are among the most vulnerable to COVID-19.

Also, more people are telecommuting and are realizing their home computers might not be suitable for work so Dell aired a commercial for one of their newest laptops. Peloton, home office chairs, etc. are all advertising the benefits of being healthy and productive at home. Also, mental health app Talkspace, Delta Airlines offering free flights for medical volunteers, online education, bidets, and more are using this opportunity to advertise their products and services.

Adapt by Seizing the Opportunity

Adaptability Charles Darwin - Your Startup Guru
Attribution-NoDerivs 2.0 Generic (CC BY-ND 2.0)

When disruptions happen, it is important to consider alternatives in order to adapt to the new environment. I have advised a new restaurant client to pivot their business model from a brick and mortar location to a commercial kitchen or food truck and adjusted their ad hoc financial projection model to reflect the pivot. Of course, depending on the stage of a business pivoting to a commercial kitchen or truck is not an option; which is why I always provide tailored consultations to each client.

Many people have a lot of downtime now with not having to go into work. It is a good time to take a break from watching the news and start mapping out the idea that you’ve been mulling. Who is your target market? Where will you be located? What are your startup costs? These are all questions you should know the answers to or be actively seeking if you are serious about taking the next step. If you do not know the answers or want a second opinion on, I always provide free consultation so send me an email. Afterwards, those pushup challenges on social media are also a good healthy distraction too from all the dire news.

These are better practices than gouging prices like that hand sanitizer guy.

sanitizer price gouging guy

A win-win situation


9 times out of 10 I create for my clients a risk-adverse, slow growth, manageable startup strategy to minimize downside risk.

Contact me and let’s create a win-win plan for your company.

Another happy client

Businesses face difficult decisions every day about what direction to go.  I was fortunate enough to help Eskenazi Health with a strategy analysis that involved an opportunity cost analysis and risk matrix to help their form their decision.
eskenazi healthEskenazi Health is a comprehensive safety-net public health system with an acute-care hospital, a network of primary care centers, mental health services, community education programs, and many other services. Located in downtown Indianapolis, Eskenazi Health’s mission is to advocate, care, teach, and serve with special emphasis on the vulnerable populations of Marion County.

See a need, fill a need

See a need fill a need - bigweld robots

Entrepreneurs often see a need through their own personal experiences and fill that need with their business idea.  This is a great strategy but sometimes doesn’t tap into a market large enough.

In episode #850 of Planet Money, The Fake Review Hunter, the host interviews Tommy Noonan, creator of SupplementReviews.com.  SupplementReviews.com is a highly popular website that provides unbiased user reviews of health supplements.  However, Tommy soon found that there were suspiciously positive reviews.  Because Tommy’s entire website was based on authentic user reviews, fake reviews became an existential threat.  After a lot of research, he found that some of these reviews were written by supplement companies.  He uncovered so many fake reviews that he started noticing a pattern, almost like a modus operandi.  They were often single product/brand reviews, used fake pictures, had lots of reviews in a short period of time, and/or only had one review.  Sometimes the “reviewer” would give positive reviews for one brand and negative ones to competing brands.

This is when Tommy had his a-ha moment.  If his website had fake reviews, others would also probably have them.  So he created another business that aligned with one of the juggernauts of the internet, Amazon.  Tommy’s site, which uncovers fake reviews, is called ReviewMeta.com.

How to find a need

As mentioned at the top of the post, most rely only on their personal experiences or that within their network.  Sometimes the need is obvious.  For example, at a 7-Eleven in Shirley, New York, one 7-Eleven sells more coffees than any other franchise in the US, all because of one store manager who knows virtually every customer’s name and greats them.  No special location mojo or customer flow algorithm, just old-fashioned customer service. You can read more about it in my post Competitive Advantage and Coffee.

Other times it is not that obvious.  In that case, you have to hustle differently.   How do you do more “work” when you’re already working to the bone?  Find efficiencies:  know your customers, know your competitors, and lower your expenses by working on learning more doing more research in episode #700 of Planet Money, Peanuts, and Cracker Jack.  In Boston’s Fenway Park, Jose Magrass is the top seller.  One year, on opening day, he sold 500 hot dogs, $2750 worth of hot dogs in a single game.  In fact, Jose has been the top seller for over five years.  Part of his secret?  He has a spreadsheet where he analyzes many factors beyond just the weather, such as what his competing vendors are selling and what fans are likely to purchase depending on the price of their seats.  For example, behind home plate diet coke sold better because possibly that is where the “vain people” sit.  That kind of analysis is impressive.

Another Happy Client: Sans Bar

sans bar

Sans Bar is a one-of-a-kind sober bar in Austin, TX.  Their mission is to provide a safe, sober environment for adults to celebrate life while promoting personal and social wellness.

Your Startup Guru created financial projections for founder, Chris Marshall.  With the help of this important document, entrepreneurs can see how much they need to make and save in order to meet their financial needs; in addition to many many other uses.  You can read more about the importance of a financial plan.

The Importance of Planning

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Excess inventory, cost management, and other issues are a reality for most businesses.  When uncontrolled, a business can face inadequate cash reserves and even bankruptcy.

To mitigate these issues, proper industry and market research coupled with financial planning for contingencies is crucial for any business.  Whether you’re in the ideation phase or are already up and running, knowing how much to allocate to the various activities a business engages in is difficult so contact me and let’s create a strategy that works for your business.

Festivals, Farmer’s Markets, Conventions, oh my!

ultra-music-festival-week-1-miami-fl-2013
Ultra Music Festival – Miami, Florida

It’s summer and festival season is here.  Events are big business with over 87 million people attending trade shows, conventions, & conferences; while 32 million people attend music festival.  Some annual industry and market stats:

  • Trade shows, conventions, conferences
    • Number: 284,600 annually
      • There are 248 convention centers in the US with a total of 56.29M prime exhibit space.
      • The majority of conventions (21%) have 1,000 – 2,499 attendees
    • Participants: 87,728,000
      • Average attendee spends 8.3 hours viewing trade show exhibits
      • 81% of trade show attendees have buying authority
  • Music festivals, fairs, and other festivals
    • Number: 1,413 annually. Music festivals alone total over 800 annually
    • Attendees: Over 102 million people annually. 32 million people go to at least one music festival annually.
      • Attendees spend on average, $207 a year on live music events and digital music/streaming
      • 1/3 of all festival fans go to more than one festival per year
  • Farmers’ Markets
    • Number: +8,400 markets that convene regularly
    • Attendees: 310,800,000
      • Farmers’ market shoppers spend a mean dollars/week was $25.38
      • Shopper visit an average of 6.12 times/month

What It Means To You

Events are targeted.  So attendees are in your market, many in your target market.  Renting a booth, depending on the event, can be fairly inexpensive.  This is an economical means of raising awareness for your product/service for the following reasons:

  1. You are not locked into a commercial lease contract
  2. Can test the viability of your product/service
  3. Get targeted market feedback

Some of what you may need depending on the event:

  • Mobile merchant services such as Square
  • Email collection method
  • Banners and booth appeal
  • Ready-for-market product/service
    • Or compelling marketing materials (videos, images, samples) of your product/service.

Read more about festivals and marketing.

Contact me and let’s see what strategy works best for your business.

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