What does the term 'ABC1' actually mean and where are they located?

Following our last post (view it here), it was highlighted how quickly targeted marketing will start to generate a greater return on investment for your activities. This is based upon the ethos that it’s better to spend your money on a leaflet drop that targets 2,000 actual prospects 5 times, as opposed to 10,000 prospects only once, and where 8,000 of those households will never be interested in your product or service.

The problem exists in how do you know which households to target, i.e. “who is my target market and where are they situated?”

One of the terms often used to determine a target market is the ‘ABC1’ category. This is often understood to be the middle and upper-class society and therefore presumed to have a higher level of disposable income. This categorisation of ‘affluence’ was derived from terminology used in the census, which places census recipients into a social grade. These social grades are based solely on the recipients occupation; your occupation, therefore, determines your social grading in the census.

Unfortunately, this can be somewhat misleading and does not take into account wealth. For example, many retirees will appear low in the census social grading but can actually have a large amount of wealth tied up in their pension or savings. Also, job title certainly does not always correlate to the amount of money an individual earns.

The best way to truly determine and identify what your customers look like is to carry out a customer profile against socio-economic classifiers such as Sonar, Acorn or Mosaic (read more about these classifications here). These classifiers are much more varied in their categorisation of social grade as they take into account not only occupation but a number of other factors including wealth, age, ethnicity and other lifestyle indicators.

By using these profiles you can truly understand and ‘put your stake in the ground’ on who your target market is. Once this has been identified you are then able to source data on whereabouts your target market lives and how many of your target market lives there. Such information can greatly improve your marketing return on investment and also provide great guidance to your franchisees as to where they should be looking to expand their business into.