Ross Honeywill

The New Economic Order: A Snapshot

Society is split pretty much in two: the traditional economic order or Traditionals and the new economic order or NEOs. And they are as different as button mushrooms and truffles.

The first type is the socially progressive, high-spending, high discretionary-choice NEOs, 93 per cent of whom are in the Big Spender category (that is the top third of discretionary spenders in the economy)

Their traditional cousins have decidedly conservative social attitudes, are reluctant spenders and conservative investors; and exhibit low discretionary-choice behaviour. Traditionals are price-sensitive and more interested in features, functions and the right deal than they are in quality and a premium relationship. As a consequence, only 7 per cent are in the top third of discretionary spenders.

Powerful social and economic influence

NEOs are far from some small niche in society — they are a quarter of the population, and have powerful social and economic clout.  They will buy new technology — all those 3G mobile phones, wireless laptops, wireless Broadband, iPads, digital cameras, and wireless scanners — but they’ll also spend their hard-won rewards on home extensions and renovations, travel, eating in and out, drinking, banking, investing in shares and online high-interest savings accounts, and an entire range of services that make their lives easier, more individual, and more controllable.  They’ll vote governments in and out, fill our universities, take professional roles and executive positions, and

In addition to the 4 million NEOs in Australia, there are 6 million in Canada, 12 million in the UK, and 59 million in the USA.

NEO Profile

To qualify as a NEO, a consumer must be:

• In the top 25% of discretionary spending AND …
• In the top 40% of the 82 defining attitudes and values that motivate high spending AND…
• In the top 40% of the 100 distinctive behavioural factors that describe and define a NEO

A NEO is born a NEO and, depending on circumstances throughout his or her life, will always be either a NEO or an Evolver. A Traditional is born a Traditional and will die a Traditional. There is no migration between one half of the population and the other.

Demographic snapshot

NEOs are largely metropolitan dwellers, with more of them living in inner urban Melbourne, Sydney and Brisbane than anywhere else.

Forty-five per cent of NEOs are women and 55 per cent are men; and while NEOs range over all age groups, they tend to be younger than Traditionals. NEOs exceed the national average in every profile between age 20 and age 50, while Traditionals exceed the national average in every profile above age 50.

Half of all people with a university degree are NEOs; when compared with Traditionals, four times the number of NEOs have degrees. They are as committed to learning a living as they are to earning a living.

NEOs are most likely to be in professional or management occupations, and earn more than the rest of society. Specifically, they dominate every income category above $45,000 pa, and are five times more likely than anyone else to earn in excess of $100,000 pa. But, remember, they earn more because they are NEOs; they are not NEOs because they earn more. And also remember that how much someone earns does not automatically determine how much they spend.

And NEOs spend more … and more frequently … than anyone else. Ninety-two per cent of NEOs are in the Big Spender category, compared to only 4 per cent of Traditionals (and remember; of all Big Spenders, only 7 per cent are Traditionals).

Lifestyle and media preferences

Outgoing, gregarious NEOs are great planners, are mobile, and are prepared to take calculated risks. For instance, at any one time 20 per cent of NEOs are actively contemplating a move from their current jobs — compared with 12 per cent of Traditionals who typically define themselves by their job.

NEOs are also more likely to take the calculated risk to start and run a small business. This is partly due to their high locus of control (success in life being a matter of planning rather than luck) and partly because they are more optimistic about the future than anyone else in the country.

NEOs love the Internet and live much of their life online; this is the place where they can exert individual control and accelerate what we call slow time. The 98 per cent of NEOs who are connected to the Internet like to accelerate slow time by going online to do their banking, share trading, travel bookings, CD and DVD purchasing, and anything else that saves time and helps them jettison mundane tasks.

Not only do NEOs dominate discretionary spending; they also dominate all heavy media consumption: newspaper & magazine readership, commercial & subscription television viewing, commercial radio listening, internet usage, addressed mail readership and outdoor media. This creates a new consumer currency for marketers and publishers alike.  Numerically NEOs dominate even the top socio-economic category in the economy (i.e. the highest earners +the highest educated + the highest level occupations) known as the AB socio-economic profile.

Politics

When it comes to federal politics, the stark political picture is that NEOs are more likely to give their first preferences to the party that provides the highest level of economic certainty.

NEOs are therefore more likely to vote for the coalition because of its economic and business credentials. But life in the NEO neighbourhood is never black and white. NEOs are, you see, ‘the new constituency’ in that they have well-evolved social and environmental beliefs, and they don’t believe the coalition can deliver on those policies as well as the ALP. As features writer Steve Burrell said of NEOs in the Melbourne Age and the Sydney Morning Herald, “Are NEOs the New Class? This is a class beyond politics. In a world of post-modern individualism, they are no longer impressed by either left or right and have transcended the old political “isms”. They are 4 million parties of one.”

Additionally, their openness to ‘new things’ provides an opportunity for all political parties to adopt a reformist agenda. NEOs are deeply influenced by social issues — almost half have progressive social attitudes, while less than one in five has traditional social attitudes. Half of all NEOs are attracted to ‘new things’, ahead of a third of the population and only a quarter of Traditionals.

Self-Image

Typically, NEOs are outgoing and feel good about themselves, their leisure activities, and their jobs. They like what they do professionally: the majority say they are satisfied by their job, in contrast to only one in three Traditionals who feels the same way.

NEOs like to look stylish, and are often extroverted. These individuals think of themselves as ‘a bit of an intellectual’, believe that success is important, and consider it important to have responsibility in their jobs. NEOs’ high locus of control ensures they are passionate about the Internet, computers, and technology — not because they are early adopters, but rather because new technology gives them more control over their lives.

Participation Sports

NEOs are likely to ‘take calculated risks’ and to test themselves with intellectual or physical challenges. They are more likely than Traditionals to fly a plane; and, of all the people who compete in triathlons or marathons; NEOs are four times more likely than Traditionals to participate.

Triathlon or marathon competitors are, of course, small in absolute numbers (they comprise only 1 per cent of society). Walking, jogging, and gym work are the most popular exercise activities in absolute terms, with more than half of  all  NEOs  participating,  compared  to 40 per cent of Traditionals.

NEOs are a massive four times more likely than Traditionals to participate in snow skiing,  3.3 times more likely to go sailing, three times more likely to scuba dive, 2.4 times more likely to water ski, and twice as likely to go board surfing and body surfing.

The self-reflection and inner-directedness of yoga is particularly attractive to NEOs — they are twice as likely as Traditionals to participate in yoga. Traditionals are dominant in other sports and leisure activities. For example, they are three times more likely than NEOs to participate in lawn bowls, almost twice as likely to participate in salt water fishing, and one-and-a-half times more likely to hunt and shoot game.

Spectator Sports

Australian Rules is the most popular football code in Australia, with NEOs more than twice as likely to actually attend an AFL match.

Of all the AFL teams in Australia, Sydney Football Club and Melbourne Football Club are, unsurprisingly, the favourite NEO clubs. This is because NEOs live in huge numbers in inner Sydney and Melbourne. It is unsurprising, in the case of Melbourne FC, given that its history is inextricably intertwined with the history of inner Melbourne.

In other codes, NEOs like to watch the Rugby World Cup on television. It’s their favourite televised football event, with NEOs 50 per cent more likely than anyone else to watch it on TV.

Entertainment

Entertaining at home is very popular with NEOs. While a quarter of the population hold dinner parties, one in three NEOs cook and entertain at home — in stark contrast to just one in six Traditionals. When it comes to drinking wine, more than half of all NEOs like to drink wine at home, compared to less than a third of Traditionals.

When they do go out, NEOs like to go to the cinema and to live performances. They are more likely than anyone else to go to the movies, attend live theatre performances, go to the opera or ballet, or attend a music concert. NEOs are even more likely to go to a rock or pop concert; and, while jazz, classical, and blues performances are less popular with them than rock or pop concerts, they are ahead in opera and ballet attendance.

Two-thirds of NEOs over the age of fourteen go to movies in any three-month period, compared to less than half of Traditionals.

Summary

NEOs are passionate, active, involved Australians.  In seeking the path less travelled, they still encounter mainstream culture (such as football), but it is their individual twist on the mainstream that distinguishes them, and makes them a challenging audience for mainstream marketing approaches.