Evaluating ‘quality of life’ in marketing
In the next few minutes, we use behavioural economics to explain how to consider quality of life in marketing. It provides great perspective for marketers when evaluating consumer behaviour so that they can create more effective marketing strategies.
What is meant by ‘quality of life’?
As the name suggests, it refers to the quality of a person’s life. This requires an overall evaluation of every aspect of life, from the way that interact with family and friends to the money they earn. This makes it quite different from a person’s standard of living, yet economists frequently use the two terms interchangeably.
Standard of living refers to aspects of a person’s life that are financially driven, and can be measured economically; such as a person’s disposable income, their location, or the size of house they live in. However, not all aspects of quality of life can be measured. For example, a family unit can’t be bought. Alternatively, the strength of a community can’t be measured.
Behavioural economists therefore realise that a person’s standard of living is only a starting point for assessing their quality of life. They then look to fully evaluate it by combining economics with behavioural science.
Why is it essential in marketing?
Making a clear distinction between quality of life and standard of living helps marketers to realise that consumers have much greater agency over their lives than is often reported. And this provides greater context into the decisions that they do make.
To take a simple example, an economist may make suggest that if prices rise, it will place pressure on people’s standard of living. A behavioural economist will then place this change into a broader behavioural content. For example, these price rises might remove their capacity to meet friends and family or pay for holidays, which are likely to impact their quality of life. Alternatively, they may bring communities together, which may actually improve quality of life.
This example illustrates that economic improvements are not always followed by an increase in quality of life. Furthermore, new technologies such as social media can have a negative impact on people’s lives. These effects are rarely considered by economists, who instead see economic growth as a determining factor for increasing quality of life.
How to assess a target audience’s quality of life?
All marketers are familiar with the process required to define a target audience. However, if they take an economist's viewpoint, they may struggle to understand the reasons that people make choices. Marketers frequently place greater emphasis on a target audience's standard of living (demographics), than their quality of life (psychographics).
This is an important distinction to make. Many decisions that consumers make defy basic economic principles. For example, basic economic theories present consumers as acting rationally, however the reality is anything but. And this has very practical implications for marketers. In an economic downturn, due to societal norms, consumers may continue to make purchases that don’t logically make sense. For example, they may economise on their weekly shop yet continue to spend on luxury purchases in a particular area of their lives.
These consumer decisions can be investigated thoroughly when defining a target market, as explain in the four elements that determine audience mindset. Furthermore, the way consumers make decisions can be explained more than just financially by considering seven elements.
Factors beyond standard of living
Just how many factors contribute to a person’s quality of life is debatable. However, some of the most prescient are presented below. Notice how they are very difficult to evaluate by considering a person’s standard of living.
Family environment
Friendships
Access to education
Attitudes to work/ money
Community
Access to community facilities
Access to advice and support
Networks and contacts
Making marketing more effective
Assessing quality of life can help every marketer evaluate consumer behaviour more authentically. The process transforms marketing from a detached analysis of data and metrics to a recognition of its impact on people’s lives.
Marketing teams can then be inspired to create more engaging campaigns and qualify the ideas that they have with greater precision. This is particularly relevant for digital advertising campaigns, where new markets can be reached with a click of a button. However, because a consumer could pay for a purchase, doesn’t mean that they are likely to think that it will be beneficial for their lives.
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