MARKET RESEARCH: New Britain new consumers - Gill Upton reports on a new social classification system that may replace the outmoded ABC1 model

By next spring, market researchers could at last have a new social

classification system to replace the antiquated and much criticised ABC1

social grading system.

This week, David Rose, Professor of Sociology at the University of

Essex, unveiled his long-awaited review of the system, four years after

being asked by the government to do so.

Professor Rose’s classification system is primarily for use by the

Office for National Statistics in time for the next national Census in

2001.

But the reason it is causing such intense interest is that he argues,

and the research community hopes, that it can be modified for use

outside the Census to replace ABC1 altogether.

Under evaluation

For the next four months, the new system is being evaluated by a panel

headed by Erhard Meier, director of IPSOS-RSL, and Corrine Moy, director

of statistical services at NOP Research, who are ’road-testing’ it.

Results will be compared with the existing ABC1 system and current

government classification system to determine whether it provides better

tracking of the modern consumer and to check how well it

discriminates.

The results will be presented in a paper at the Market Research Society

conference in March, when the reaction of the commercial research

community to the new system can be truly judged.

The crux of the new system is that it offers a more modern, classless

view of the British consumer. Like the old system, it is

occupation-based, but it more accurately reflects people’s purchasing

power by their positions in the labour market.

For example, under the old system, policemen were regarded as skilled

manual workers in the C1 group. Now, they are seen as associate

professionals, which moves them into Rose’s second level of occupations

(see box, page 30). The new system also separates out self-employed and

small employers, better to reflect the trends of modern society.

Of his new technique, Rose says: ’It isn’t designed to try to divide

society up by consumption. Neither is it a refined segmentation by

markets. It is a similar guideline to ABC1 in the sense that it uses

numbers.’

Rose’s system interests marketers and market researchers because it is a

more accurate tool with which to draw distinctions between purchasing

habits.

Details like including self-employed and small employers is seen as a

big improvement.

’We see an opportunity there for an alternative to ABC1, but we need to

evaluate it,’ says Barry Levanthal in his role as chairman of the Census

Interest Group at the MRS. He is also vice-chairman of Berry

Consulting.

Better or worse?

’We need to know whether the new system will be better across the board

or worse,’ says Levanthal. ’Classifications are used for all kinds of

different purposes, from product usage to targeting, and we need to

establish the strengths and weaknesses of the new system.’

He adds: ’What I don’t know is whether the new system will help to get a

handle on the new consumer, as it is based on employment and

occupation.

I’m not sure how it will work on media consumption. The old ABC1 system

is more complex in a sense as it includes an element of lifestyle, which

the new one doesn’t.’

Levanthal’s concerns will no doubt filter through at the MRS conference,

but ultimately it will fall to market researchers to advocate it, or

not, to their clients.

An MRS validation would certainly help a wholesale conversion. But such

a change to Rose’s system is already being received with caution

generally by the market research, data warehousing and direct marketing

community. More likely is some half-way house arrangement whereby the

two systems run in tandem.

This may cause chaos. Like a currency, unless everyone uses the new

system it will not work. One side issue is that many market researchers

may have to be re-trained. Another is that any wholesale replacement

will make a nonsense of trend data.

Even Professor Rose has gone on record as saying that even if the

research industry gives his new classification system the thumbs down,

the ABC1 system still needs an overhaul. Any change will be a difficult

process, particularly if the new system entirely replaces ABC1. ’The old

system is ingrained among media buyers and advertisers’ says

Levanthal.

The arguments for and against adopting the new system are well

known.

The ’anti’ lobby is arguably taking an ostrich approach. It’s almost a

question of ’better the devil you know’. ’Familiarity brings quite a lot

of benefits,’ asserts Corrine Moy of NOP Research.

’Yes, it is outdated and, yes, it is widely used,’ says Bill Portlock,

planning director with direct marketing agency WWAV Rapp Collins.

’The ABC1 system is a good broad brush, but very clumsy; it’s never been

a totally sharp tool. But it’s part of our lingo now; it’s common

currency,’ he adds.

’How we segment a database, in terms of who wants the clients’ products,

and then prepare a precise model, is a sophisticated exercise, but we

still go back to ABC1. We speak ABC1, but understand what’s going on

underneath.’

Users call the shots

’I wouldn’t resist a new system,’ says Bill Blyth, director of research

at Taylor Nelson. ’But these things tend to be user-driven and everyone

is using ABC1.’

Roger Titford, strategic research director of marketing services company

Fast Marketing, has been using ABC1 for 20 years and is naturally rather

loyal to the system.

’It does depend on what you’re using it for,’ he concedes. ’If you’re

talking about consumers generally, it’s fine - and what I find strong

about ABC1 is that it suggests an outlook on life. But for certain

product fields you might need Acorn Type 32, Younger Empty Nesters or

High Income Families.’

And this is where the ABC1 system falls down. It was originally

developed out of government classifications that were current half a

century ago, and has been much derided over the past ten-15 years.

The system is essentially a definition of wealth rather than attitude

and, although it is perfectly adequate for broad consumer definitions,

as people have become better educated, move jobs more frequently,

confuse gender roles and have more disposable income, the lines have

become very fuzzy indeed. The idea of there being only six ways of

classifying the population is outmoded in the 90s.

The ’E’ classification today mixes state pensioners and unemployed in a

wide age spectrum, while ’A’ singles out top managing directors and

company directors. The real change has happened in between these two

classifications - to the Bs, Cs and Ds.

Consumers today have more facets to their lives that are more important

to them and these are difficult to grasp in a single classification. We

also identify more family classifications today, such as working women

and single households.

’More traditional socio-demographic criteria are no longer useful and

need to be updated,’ says Melanie Howard, director of the Future

Foundation, a consumer research, social analysis and commercial think

tank.

’Class, income and gender are no longer the accurate prediction of

consumer behaviour. People are not going to stay in their class

classifications through all their lives. Women are no longer classified

by the job of their husband, for example. People are getting married

later, are divorcing more frequently - the changes have been legion.

Values and attitudes are changing too.’

The jury is out as to whether the very complexity of the modern consumer

can be easily boxed into a single, easy-to-use classification method.

The vocal dissenters of Professor Rose’s report suggest that it has

shortcomings and would be difficult to implement.

’If a new system were to be adopted by government and influential

clients, then there’s no reason why it shouldn’t be influential,’ says

Simon Atkinson, Associate Director of MORI. But he adds: ’It would need

a strong consensus.’

Amsterdam-based ESOMAR issued a paper on new socio-economic

classifications but there has been little enthusiasm for it. Will the

research industry in this country suffer from the same inertia?

The Future Foundation’s Howard doesn’t believe there is a system out

there to accurately track the consumer’s complex nature, including

Professor Rose’s.

’It will help government analysis, but marketers will have to find new

ways of segmenting their own markets,’ she says.

’It’s a question of how marketing can catch up with reality. We need to

understand the differences. We’ve moved away from grouping people

together to explain their similarities. We are all becoming

individualised and sophisticated.

Companies are going to have to do more sophisticated marketing, which

has already started with the direct marketing industry through vehicles

such as loyalty programmes.’

One method being used by the Future Foundation to capture changing

values and systems is a technique called ’fuzzy clustering’, based on

fuzzy logic.

It allows consumers to be recognised and defined in different ways

according to the time of day. Consumers can also inhabit different

categories in different parts of their lives, summed up by the example

of a Sun newspaper reader who is studying for a degree.

Our secret lives

’Everyone has a secret life,’ says Stokes Jones, editor of the Henley

Centre’s annual ’Planning for Consumer Change’ study, released this

month.

’We try to warn marketers that their markets may be hiding. I may buy my

work shirts from Jermyn Street, my casual shirts at Muji and listen to

Sibelius and I’m all the same person,’ he adds. ’We’re more complicated

as consumers because we’re more complicated as people.’

A cornerstone of this year’s study is a classification of the complex

consumer called polyglotting, and this may well provide a part answer

for the research industry.

’Instead of looking at consumer identity we look at modes of acting and

behaving at different times,’ says Jones. It is effectively another form

of fuzzy clustering.

’We segment people according to occasions instead of what you think

their identity is all the time. The question is not what are their

backgrounds, but when will they be in this mode? When will they want to

chill out? When will they want to splash out?’

As well as polyglotting, the report identifies 20 new trends affecting

the modern British consumer. These include the need to deal with

increased stress, the blurring of age gaps, increased interest in New

Age philosophies, the need for ethical values in business and the way

consumers see brands as part of their identity.

Jones knows it will be a long haul to persuade media owners to move away

from social grades, however. ’It’s backed by them and they all know what

it isn’t telling them, but it’s the best thing they have.’ The basis of

his thinking is that consumers are changing at a rate faster than the

ability of companies to understand them, which in turn requires new

tools to track them.

Intimate relations

’Everyone tries to fill in the cracks in different ways and tailor

research to their specific needs,’ he adds.

’We’ve developed a more intimate way of looking at consumers’ lives and

I hope they will incorporate polyglotting intelligently to evolve the

ABC1 system.’

Already, research organisations such as the Henley Centre, the Future

Foundation and Research International are looking at ways of studying

consumer behaviour at close hand, either by living with them, filming

them or getting them to fill in diaries as they go through the day. All

of this shows how a replacement for the ABC1 classification will never

be enough on its own; marketers need more.

So, at the very least, a new system to run alongside, or augment the

ABC1 system, seems the most popular option.

This is already happening in the sense that most companies already have

in place their own, internal ways of segmenting their consumers as they

relate to their business. The problem is they can’t take this language

outside the walls of their HQ. Acorn, Fruits and Mosaic have also helped

update ABC1.

One suggestion, from Taylor Nelson’ s Blythe, is to add new

classifications to ABC1 - say, job levels and educational levels - in

order to update the system.

Whatever the outcome, the rapid pace of growth experienced by

relationship marketing should force change of one kind or another. But

whether the research industry ends up with more confusion rather than a

more effective new classification system is a moot point. The new

choices are certainly testing everybody’s attitudes.

TOWARDS A NEW ABC1?

In his newly revised Social Class System, Professor Rose proposes that

consumers be divided into 17 narrow classifications by occupation,

taking into consideration employment relationships between managers and

the managed. These 17 classifications can be grouped into eight broad

categories.

1 Professionals (currently ABC1s): doctors, vets, teachers, lawyers,

librarians and social workers, plus business executives and successful

entrepreneurs.

2 Junior managers in smaller organisations (currently C1s): journalists,

police sergeants and constables, plus hospital nurses, research

executives and market researchers.

3 Intermediate occupations (currently C2s): clerical workers,

secretaries, those formerly classified as skilled manual, plus dental

nurses, telephone engineers and computer technicians.

4 Small employers with fewer than 25 employees; the self-employed.

5 Supervisors of those in semi-routine and routine occupations, ie

working class supervisors.

6 Semi-routine occupations (currently Ds): sales assistants, supermarket

cashiers, all drivers and assembly line or factory workers.

7 Routine occupations: domestics, couriers, porters, refuse collectors

and all labourers.

8 Never worked or long-term unemployed.

This article was first published on Marketing