What Is Psychometrically Informed Propensity Modeling?

A guide to propensity models and how psychometric data is increasing their efficacy.

Overview

Psychometrically informed propensity modeling is the use of psychometric mapping in conjunction with traditional propensity models to improve model accuracy, scope, and capability. These new, enhanced models are the latest and greatest in consumer prediction technology.

Takeaways

• Basic propensity modeling is improved by the addition of psychometric data to explain the why behind purchases.
• Don’t just look out for your propensity model to be psychometrically informed, ensure the right psychometric framework has been used.
• Psychometric and traditional demographic segmentation can go hand in hand to assist predictive power of propensity modeling.

What is Propensity Modeling?

What is propensity modeling, beyond a phrase the average adult struggles to say five times fast?

Propensity modeling is a statistical tool used to determine the probability that a person will take a specific action. Traditional propensity modeling relies on analysis of past behavior.

If I built a simple propensity model to track and predict grapefruit sales in my supermarket, and Bob buys grapefruit every Tuesday at our market, the model would presumably tell me that Bob has a high propensity to buy grapefruit next Tuesday.

What Does It Mean For a Propensity Model To Be Psychometrically Informed?

Psychometric informing is the process of adding psychometric data into the propensity model to improve its predictive accuracy.

Thanks to my grapefruit propensity model, we know that Bob goes to the store to get grapefruit every Tuesday, and thus next Tuesday is due for a store visit for some grapefruit. However, if we add a framework of psychometric data, I can understand Bob’s purchase decision to a more thorough extent, informing and improving the accuracy of my model.

I can explore not just that Bob buys his grapefruit on Tuesday, but what aspects of his personality might frame this purchase decision, and how I might utilize his psychometric profile to my advantage.

Demographic Segmentation vs. Psychometric Segmentation

It’s common practice to segment audiences by demographic, and while this practice does have potential merit, studies have shown that psychometric valuation is a greater factor than demographic for many products and purchases.

Thus, using psychometric material to enhance data allows for a more nuanced understanding of your customer and audience, especially when used in conjunction with demographic segmentation. The two approaches are not mutually exclusive, and instead best practice sees them hand in hand.

HEXACO vs. Big 5, Which Psychometric Framework is King?

Traditional psychometric modeling relies upon the Big Five model which segments personality into five main categories: Openness, Conscientiousness, Extraversion, Agreeableness, and Neuroticism.

However, the Big Five Model neglects one main personality trait that researchers have determined to be a key factor in personality definition: Honesty-Humility.

The HEXACO model was created to account for this. HEXACO adds Honesty-Humility as a sixth dimension to expand upon the capabilities of the traditional Big Five model.

The use of a HEXACO framework over the Big Five allows for more detailed and accurate personality mapping, ensuring you really know your audience and can truly define what makes them take action.

Simply, why use an older, less precise framework when you can use its upgrade?

Implications for Marketing

Let’s return to Bob and his grapefruit.

As it turns out, my grapefruit margins are pretty slim. With the variability in the grapefruit market, sometimes I even lose money selling grapefruit. Plus, I’m rather fond of grapefruit myself and would rather be able to enjoy the entirety of the store’s contents without having to share with my customers. I’d much rather Bob get his fruit-fix with apples, which are my store’s most stable, profitable fruit.

At this juncture, traditional propensity modeling is stumped. I know that Bob buys his grapefruits on Tuesday, that to do so he walks down a certain aisle and that sometimes he also picks up bodywash on grapefruit-days, but I don’t know enough about him to be able to influence his purchase decision effectively. Sure, I know that he’s a male in the 18-25 demo, but the graphics of Ninja Turtles eating apples that I put up don’t seem to be cutting it.

Fortunately, I no longer have to rely on traditional propensity modeling and demographic segmentation, and can lean on my psychometrically informed model to fill the gaps left by legacy methods.

Psychometric research indicates most of my large-scale grapefruit buyers, Bob included, are quite high on the Emotional scale of HEXACO, indicating high fearfulness. I run an in-store campaign near my grapefruit display that emphasizes the “apple a day keeps the doctor away” idiom, and some intense graphics from non-apple-eaters (think anti-smoking campaigns). Suddenly, Bob has abandoned his grapefruit in favor of apples, and I become rich in both wealth and grapefruit.

While this is obviously a simplified and exaggerated example, it highlights the power of psychometric enhanced propensity modeling as a way to both better understand your audience and better predict their buying behavior.

Imagine being able to fine tune your marketing efforts by understanding not just what your customers do and their demographic, but the psychometric factors behind their decision making. That’s the power that psychometrically informed propensity modeling brings to the table.

FAQ

Are digital behavioral twins psychometrically informed propensity models?

Yes! At Soulmates.ai, our digital twins are advanced psychometrically informed propensity models that use a HEXACO framework as well as past actions (determined through extensive surveys) to make predictions.

How can I tell if a propensity model is psychometrically informed?

Look out for mention of a psychometric framework around marketing materials for your propensity model, or look for validation of a psychometric framework within the model itself.

Are there any psychometric frameworks beyond HEXACO and the Big Five?

Yes, other psychometric frameworks exist. Commonly, people are aware of the Myers-Briggs test. However, other psychometric frameworks are unstable and unreliable compared to the HEXACO and Big Five models, and should not be used in propensity modeling.