Where do NEOs come from?

Background

The NEO typology had its genesis in the early 1990s and underwent a dramatic evolution at the KPMG Centre for Consumer Behaviour (Asia Pacific). It was developed by consumer behaviourist Ross Honeywill and enhanced by Honeywill and social scientist Verity Byth at KPMG .

In 2001 Random House published the first book outlining the typology and its practical business application titled I-Cons: the essential guide to winning and keeping high-value customers. In that same year the typology evolved and was applied to the Roy Morgan Single Source database: arguably the largest consumer database of its kind in the world with 120,000 respondents each year and more than 2,000 consumption variables. This move operationalised the NEO typology and took it onto the screens of every major media agency in Australia.

In 2004 I-Cons was translated into Chinese and published in Mainland China.

In October 2006 NEOs: how the new economic order is changing the way we live work and play was published in Australia and New Zealand by Scribe Publications.

Social Segmentation

The NEO typology is a social segmentation defined by using Psychonomics – standard psychographics (values, attitudinal & behavioural) + a statistical discriminant model (SDM) using multivariate modelling (to characterizing the differences between social segments) + a spending propensity model (SPM) to identify the respective economic impact of each social segment. It operates at a societal level providing an analysis across the population and the economy, of the social segments that are the most influential – economically, politically and socially. It therefore sits above, and can easy integrate with, market segments developed at an enterprise level.

Psychographics + SDM + SPM = NEO typology
Population data

Defined by 194 factors, the NEO typology is a complex model with a simple interface: three master segments. Each social segment is scored to 5% increments (i.e. each has 20 detailed and differentiated levels). The three social segments are:

• New Economic Order (NEO)
• Evolving NEOs (Evolvers)
• Traditional Economic Order (Traditionals)

The NEO and Evolver social segments are psychographically similar, but may exhibit different spending characteristics (an Evolver may have a majority of NEO attitudinal and values factors, but not conform to the requirement by the NEO algorithm to also be in the top 25% of discretionary spending).

The Traditional social segment is statistically (behaviourally and attitudinally) different to both NEOs and Evolvers.

Genetic Hardwiring

While Social Intelligence (see What is Social Intelligence?) is soft-wired and adaptive, individuals are born hardwired to be either a Traditional or a NEO/Evolver according to Ross Honeywill’s work conducted over 10 years with data from more than 800,000 interviews conducted in North American, the UK, Australia, Indonesia and New Zealand. He found that not only do NEO respondents differ markedly from Traditional respondents, but they are genetically programmed to be different.

Honeywill’s work in social genetics is paralleled by other international studies including the work done in 2005 by John Alford at Rice University, Houston, Texas. Alford and his colleagues found that only 11 per cent of any social or psychological variance is due to early childhood socialization, including parental influence. In other words we are the subjects of nature, not nurture.

Elsewhere in the world, psychologists have found that people with conservative or traditional attitudes demonstrate more structured and persistent cognitive styles, whereas those with liberal or socially progressive views (i.e. NEOs) are more responsive to informational complexity, change and new experiences. David Amodio, from New York University’s psychology department reported that, “conservatives (i.e. Traditionals) have been found to be more structured and persistent in their judgments and approaches to decision-making. Progressives (i.e. NEOs), by contrast, report higher tolerance of ambiguity and complexity, and greater openness to new experiences on psychological measures.”

Different gene variants produce profoundly different social responses. In the case of Traditionals, for example, the gene D4DR leads to higher levels of the neurotransmitter dopamine which is in turn linked to the need to impose order on the world. Traditional personalities are more likely to be genetically hard-wired to bring order to an otherwise chaotic world.

Conversely, other genes may well be responsible for NEO personality traits. According to a report in the New Scientist magazine, the genes ‘5HTT and MAOA, both help control the levels of serotonin, a neurotransmitter that also influences brain areas linked with trust and social interaction.’ In short, the NEO social type is more likely to have the genes that improve the regulation of serotonin, making NEOs more sociable and outgoing.

 FURTHER READING:

Lamarck's Evolution: two centuries of genius and jealousy by Ross Honeywill - more...