The Scientific Approach
At the Spending Group, we look at things differently. We start from what really matters and go from there. Take the question of why some businesses succeed whilst others fail. Beyond the economy, beyond marketing, beyond demographics, beyond trends – even beyond consumers themselves – businesses succeed and fail for just one reason. Because people either do or don’t buy what they sell. It’s all about spending. So that’s what we became experts in.
Despite anything that you’ve been told, age, education, income and wealth actually have very little influence on spending. Nor do they start working when you put them together in any kind of combination.
It turns out that irrelevant x irrelevant does not equal relevant.
We took two billion measures of why people spend and stripped out one factor after another that proved to be irrelevant. We then developed an algorithm that crunched ten discretionary spending factors, 82 attitudinal/value factors, and no less than 100 behavioral factors or characteristics and applied it to hundreds and thousands of people across three continents. The results revealed two types of consumers, each with their own subset type, so radically different from each other in terms of who they are and how they spend, that they might as well come from totally different planets. Over in one corner of the galaxy stood NEOs and the closely related Evolvers, and over on the other stood Traditionals and the affiliated High Status Traditionals.
NEOs and Evolvers spend more, more frequently than their Traditional counterparts, irrespective of their age, income or any other factor. In fact, even though they represent only 46 percent of the population in America, they are responsible for 77 percent of all discretionary spending. Not only that, but NEOs account for 92 percent of the ‘Big Spenders’ – the top third of discretionary spenders in the developed economies of North America, Britain, Australia and New Zealand. They are the ones behind the success of businesses of all sizes across many sectors, and their spending adds up to an economy within an economy, wherever they are.
It’s thanks to the algorithm and the discovery of the NEO Economy that you’ll never hear us say that when the economy nosedives, all consumers cut back on spending across the board. Or, Apple became the biggest technology company in the world because it has a great brand. Or, if you want to succeed in business, you have to get the Millenials on your side. Or, have you noticed how everyone is wearing technology these days?
Not that we have anything wearable technology, of course.
But when it comes to trends, there’s only one we hope will catch on.
Smart is the new black.