Has Digital Research Replaced The LSM?

Has Digital Research Replaced The LSM?


Does LSM help you find your target audience, and get feedback from them to help tailor your service or product for them? Short answer: No.

The LSM is a market segmentation tool that was born because there wasn’t anything better around. It served a purpose, but it was not perfect.

Consumer’s Aspirational Buying Choices

The problem with audience engagement before digital technology was that it was difficult to segment audiences precisely.

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You might have known how many of your readers, or customers, are male and what age group they fell in, but you couldn’t drill it down further than that.

LSMs miss the aspirational nature of people’s buying choices. There is a running joke in townships that the truly poor people are those who live in a shack with no satellite dish on the outside. Yet this measure tells us that it is only the middle and upper classes who will be watching DStv.

A drive through the nearest informal settlement should cure anyone of this notion.

If we accept that people in the townships will be buying products that match an aspiring self-image, then it does not make sense to use what they do own as an indication of what they will purchase in future.

In any case, without further information that gives better context, the LSM does not provide relevant information, in my view.

Forget the ‘Spray-and-Pray’ Approach

If you were a brand that wanted to reach Orlando Pirates fans in South Africa, you would have to place an advertisement in the paper or on radio and hope for the best.

The days of this kind of ‘spray-and-pray’ approach to audience engagement are gone forever. Companies that still rely on it are still clinging on to analogue practices in a digital world. They are stuck on business practices that are losing them a tonne of money. It’s time to move on.

In the digital era, using the right research tools, businesses are able to determine a more definitive audience demographic, not just age and gender. We’re able to map out their interests, income, household status and so much more.

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Abandon Cookie Cutter Segmentation

Businesses focused on township residents should be careful not to take a cookie cutter approach to segmenting their customer base. Those not advertising to a township audience should re-assess their decision not to.

It should be based on actual facts, not an outdated measurement system that does not truly reflect reality.

Businesses should take the time to connect with their customers, which in turn enables them to keep abreast of changing trends.

This way businesses can pick up on shifts in the market as they happen, and not be dependent on a tool like the LSM to give an accurate take on what is changing in the lives of their consumers.

Peter du Toit
Peter du Toit is the CEO of markets insight agency, Brands Laduma. He is also the founder and CEO of Soccer Laduma, which he founded in 1997, and has since grown to become one of South Africa’s biggest newspapers, and one of the world’s top five football newspapers. He prides himself in giving a compelling and engaging read to Soccer Laduma’s loyal readers who have made the paper a market leader in print, digital and social networking. He also believes that to grow across all media platforms, it’s vital that Soccer Laduma remain relevant to a market whose economic power and social influence gains momentum. Part of that relevancy is continuously working to understand the consumer in all facets, which is how Brands Laduma was born. In his youth, Peter played football professionally for Cape Town City and the Hellenic Football Club. He also briefly ran a successful fund management company before moving on to his true passion: Conversations about football.