INBOX INSIGHTS, February 22, 2023: Personality Tests, Purchase Frequency Analysis

INBOX INSIGHTS: Personality Tests, Purchase Frequency Analysis (2/22) :: View in browser

Inbox Insights from Trust Insights

👉 Take our Measurement Strategies for Agencies course now for free!

The Risks of a Personality Test

Do you know yourself well enough to say what your personality type is? Maybe a better question is asking whether or not you’ve ever taken a personality test, or used one to make decisions about your team.

If you answered yes to any of the above – congratulations! You’re normal!

Here’s the thing. A personality test can be fun, a light weight ice breaker, or a team bonding exercise.

However, there are a lot of risks with putting too much stock in a personality test.

Responder Bias

Whether we realize it or not, we don’t answer a personality test honestly. Well, not completely honestly. We all have an idea of who we think we are, or how we want others to see us. When we’re responding to a personality test we’re responding with the answers that will give us a desired outcome. If we see ourselves as leaders, we tend to respond in a way we think a leader would. If we see ourselves as introverts, we lean toward the answers that are more inward facing.

Assumptions

I can tell you that I’ve gotten INTJ on the Myers-Briggs test or that I identify as a Type A. But this won’t even scratch the surface of who I am. The risk with using these labels is that they are limiting. If I am truly an INTJ, then as an introvert I would struggle to lead, speak up, and get on stage. If I am truly Type A, then why am I also really good at laying on my couch and doing nothing for two days straight.

Stereotyping

Very similar to assumptions, once you “know” someones personality type there is a tendency to put that person into a box and never let them out. The little bit of me that people know publicly is only a small piece of who I am as a whole. If I give a talk about Google Analytics twice, then I become the person that only gets to talk about Google Analytics. The same is true when we try to use personality test to assess people. If I’m labeled an introvert, I could lose out on opportunities where someone is looking for an extrovert.

Incomplete data

It should go without saying that if you can access a personality test without paying for it, you’re not getting something that would hold up in court. Ok, you probably don’t need to bring a personality test to court, but you will run the risk of judging and being judged based on the data produced. A personality test doesn’t take a lot of aspects of who you are as a person, or what you’ve experienced, into consideration. Most tests will ask opinions and preferences on made up scenarios. This means it’s only going to give you surface level feedback – not an accurate assessment.

But don’t just take my word for it. Here is what our community had to say about the topic:

“They’re fun to take, but hard to turn into action. And the danger is you make a snap judgment about what”type” a person is, then stop listening to them and just try to manipulate them based on their type. I’ve learned it’s much more important is just to listen to people, ask them what they want, and if they don’t know probe gently to find out more. Everyone is different, no one fits neatly into personality tests, and many of those tests aren’t even based in science.”

“They are based on junk science, putting on my psychologist hat my personal opinion: The Myers-Briggs and that ilk of personality test are meaningless bunk – circus tent astrology for the business suit set, and promote existing biases and prejudices. The ones that are based on a mix of pseudoscience and real psychology are more dangerous. Your employer is legally not allowed to ask about your physical or mental health – the better built tests are a back door to this knowledge, as they can reveal mental health diagnoses to your employer that they have no business knowing (and in some cases, that you may not even be aware of yet yourself) If you can avoid it, avoid it.”

“Personality is so fluid. There are long-term traits, for sure, but there’s SO much circumstantial variability that those personality types don’t reflect.”

Want to join the conversation? Reply to this email or join our free Slack Community, Analytics for Marketers.

– Katie Robbert, CEO

Share With A Colleague

Do you have a colleague or friend who needs this newsletter? Send them this link to help them get their own copy:

https://www.trustinsights.ai/newsletter

Binge Watch and Listen

In this week’s In-Ear Insights, Katie and Chris discuss social media ROI. What is it, how do you compute it, and why do marketers do such a bad job with it? Learn the most common mistakes with social media ROI, when it’s useful as a metric, and what your next steps should be to find yours. Tune in now!

Watch/listen to this episode of In-Ear Insights here »

Last week on So What? The Marketing Analytics and Insights Livestream, we dug into search quality ratings guidelines. Catch the episode replay here!

This Thursday at 1 PM Eastern on our weekly livestream, So What?, we’ll be looking at tools for competitive intelligence. Are you following our YouTube channel? If not, click/tap here to follow us!

In Case You Missed It

Here’s some of our content from recent days that you might have missed. If you read something and enjoy it, please share it with a friend or colleague!

Paid Training Classes

Take your skills to the next level with our premium courses.

Free Training Classes

Get skilled up with an assortment of our free, on-demand classes.

Data Diaries: Interesting Data We Found

In this week’s Data Diaries, let’s tackle a slightly different form of analysis, one uniquely suited to B2B marketing. In the past, we’ve talked about and stepped through RFM analysis – recency, frequency, and monetary value of B2C consumers. When B2C marketers want to understand their databases of customers, RFM analysis is one of the first, best analyses we recommend they perform. It’s fast, computationally efficient, but most of all, it’s directive.

That logically brings up the question, does RFM analysis work for B2B marketing? The answer is yes, but with a twist. In B2B marketing, the customer isn’t a person or even a household; the customer is a corporate entity. Performing RFM analysis on your CRM’s database of contacts would be a terrible idea because individual people, for the most part, are not decision-makers by themselves. The organization as a whole makes purchases.

Additionally, when we think about purchasing at an organization, particularly larger organizations, there may be multiple places within an organization to sell to. For example, suppose Trust Insights wanted to sell into Alcoa. How many different divisions of Alcoa could use our services? Certainly more than one, but if we performed RFM analysis at the person level, we’d miss those potential opportunities or insights.

So what’s the answer? Adopt the methodology of RFM but at the organizational level, a process known as purchase frequency analysis, or PFA. It’s also known as purchase frequency segmentation. We use the same general metrics – recency of purchase, frequency of purchases, and value of purchases – but at an organizational level instead.

Let’s take a look at a sample dataset. Below, we have recency and frequency on the axes, with dot size being volume:

PFA Recency Frequency

We see that Darden Restaurants, in this example, is one of the top performing customers – high frequency, high recency, and a large bubble indicating high purchase volume. If this were our customer base, we’d want to make sure that customer was super happy. In fact, the entire upper right quadrant is important here.

Note that part of PFA and RFM analysis is rescaling all your data so you can do apples to apples comparisons; these metrics have all been rescaled on a 0-100 basis.

In the lower right are high recency purchasers, organizations that have made a purchase recently. They haven’t made many, though. From a marketing strategy perspective, we’d want to try selling them more stuff.

In the upper left quadrant are high frequency purchases, organizations that have purchased multiple times, but not recently. These are organizations which need more contact, more outreach to see what else we can help with.

Next, let’s look at volume and recency.

PDF Volume Frequency

Again, we have quadrants; the horizontal axis is recency and the vertical is volume of purchases by revenue. Dot size is frequency, or number of purchases.

The upper right quadrant is again our ideal customer area – big revenue, bought recently. Those are customers we need to keep happy.

The lower right quadrant has bought recently, but not a lot. Those are customers we’d want to upsell, to find ways to increase revenue by increasing the size of purchase.

The upper left quadrant – empty here – are big spenders who haven’t bought recently. It’s good that this quadrant is empty! It means we’ve done a good job keeping our biggest customers happy.

The lower left, as always, is the area where we need to do something to motivate customers to do more, either by spending more or spending more often.

The value of purchase frequency analysis is how prescriptive it is. It’s a simple, easy to understand model for exploring your customer database. Chances are you already have the data in your CRM, so you don’t even need to go very far to find the information. Once you have it, developing an action plan is straightforward based on where customers fall in the charts.

Trust Insights In Action

Job Openings

Here’s a roundup of who’s hiring, based on positions shared in the Analytics for Marketers Slack group and other communities.

Join the Slack Group

Are you a member of our free Slack group, Analytics for Marketers? Join 2900+ like-minded marketers who care about data and measuring their success. Membership is free – join today. Members also receive sneak peeks of upcoming data, credible third-party studies we find and like, and much more. Join today!

Blatant Advertisement

We are excited to announce that we’ve got a new mini-course, and this one’s free. It’s called Measurement Strategies for Agencies. You’ll learn the 5 things agencies do most wrong when it comes to developing effective measurement strategies for clients – and how to fix it. It’s just about an hour long, it’s free, and it’s for two groups of people:

  1. People who work at agencies, so you get better at measurement
  2. People who HIRE agencies, so you know what to ask for in your reports

👉 Click here to take this course now for free!

Interested in sponsoring INBOX INSIGHTS? Contact us for sponsorship options to reach over 22,000 analytically-minded marketers and business professionals every week.

Upcoming Events

Where can you find Trust Insights face-to-face?

  • PodCamp Philly, Philadelphia, March 2023
  • Martechopia, London, March 2023. Use MARSPEAKER20 for 20% off the ticket price.
  • B2B Ignite, Chicago, May 2023

Going to a conference we should know about? Reach out!

Want some private training at your company? Ask us!

Stay In Touch, Okay?

First and most obvious – if you want to talk to us about something specific, especially something we can help with, hit up our contact form.

Where do you spend your time online? Chances are, we’re there too, and would enjoy sharing with you. Here’s where we are – see you there?

Featured Partners and Affiliates

Our Featured Partners are companies we work with and promote because we love their stuff. If you’ve ever wondered how we do what we do behind the scenes, chances are we use the tools and skills of one of our partners to do it.

Read our disclosures statement for more details, but we’re also compensated by our partners if you buy something through us.

Legal Disclosures And Such

Some events and partners have purchased sponsorships in this newsletter and as a result, Trust Insights receives financial compensation for promoting them. Read our full disclosures statement on our website.

Conclusion: Thanks for Reading

Thanks for subscribing and supporting us. Let us know if you want to see something different or have any feedback for us!


Need help with your marketing data and analytics?

You might also enjoy:

Get unique data, analysis, and perspectives on analytics, insights, machine learning, marketing, and AI in the weekly Trust Insights newsletter, INBOX INSIGHTS. Subscribe now for free; new issues every Wednesday!

Click here to subscribe now »

Want to learn more about data, analytics, and insights? Subscribe to In-Ear Insights, the Trust Insights podcast, with new 10-minute or less episodes every week.

Leave a Reply

Your email address will not be published. Required fields are marked *

Pin It on Pinterest

Share This