Identifying and using reference groups in marketing are important because reference groups influence the attitudes, goals, aspirations, opinions, and information that determine customer standards and expectations regarding your business and your products or services. Understanding reference groups, and how they influence your target customers, will enable you to fine-tune your marketing messages and appropriately package the messages for delivery via the customer’s preferred platforms.
Reference groups are people (or groups) used by individuals as a yardstick for self-assessment or as a model of personal taste, standards, attitudes, or behaviors. The Business Dictionary defines the term as: “People whose attitudes, behavior, beliefs, opinions, preferences, and values are used by an individual as the basis for his or her judgment. One does not have to be (or even aspire to be) a member of a reference group to be negatively or positively influenced by its characteristics.” [Retrieved on 3/5/2012]
Although many types of reference groups may influence an individual’s beliefs, opinions, values, behavior, etc., three reference groups significantly influence purchase decisions among both individuals and organizations. These are:
- Dissociative group – This group is characterized by attitudes, values, or behaviors inconsistent with those held by an individual. The individual wants to distance him or herself from this group.
- Membership group – The individual is currently a member of this type of group. Among the obvious groups in this classification are fraternities and sororities, social clubs, social networking circles or groups. Other groups may be somewhat less publicly obvious, such as one’s family, religious organization, residential neighborhood association, country club, etc.
- Aspiration group – This is a group with which the individual would like to be associated or identified. The individual might aspire to be a member of an elite business or professional organization with strict membership requirements. It might be an elite country club, an Ivy League school, a yacht club, a very expensive, gated community homeowner’s association, a Fortune 100 corporation, or the board of directors of a prestigious charity.
Knowing the reference groups of your best customers and target audience provides a wealth of information about the kind of information prospects will want or need at each stage of the purchase journey, as well as how to shape the messaging and how to package the data. It might also provide insight into where prospects are most likely to want to find information. Knowing the appropriate reference groups will allow you to choose someone well known in the aspiration group to speak for your brand.
One important note is that reference groups have little or no influence over the choice of products/services that are not publicly apparent. These groups are important in the choice of products and services used in situations that are visible to others. Luxury products, for example, should be marketed to the appropriate membership or aspiration groups and should choose appropriate testimonials, recommendations, and spokespeople.
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It takes time to gather sufficient information to classify reference groups of customers and prospects. Choosing the right people to appear in ads or to provide endorsements can be tricky – particularly if the person is known to hold an opinion at odds with a critical value held by your prospect. However, when you have the necessary information, your marketing team can craft very powerful marketing messages that strike the right chord with your target audience.
Using reference groups in marketing can be done by a business of any size, in any industry or sector. Reference groups can help you develop powerful marketing programs that deliver the right message in the right packaging at the right time in the right place.
Before you launch a campaign based on reference groups, it will be important to test it with representatives of the target market. Testing will ensure a match with the values, tastes, opinions, and behaviors of the group. An inappropriate reference or image in your marketing collateral, however, will be instantly obvious to the target market and will negatively affect your firm’s reputation.