Dear friends and colleagues

We’ve all asked the question and now it has been answered:  Yes, LSM’s will and have evolved.  We now have 14 LSM groups!

Over the last month, SAARF have launched the new LSM groupings to the industry.   And to us these new groupings are very welcome.   How can everybody stay with LSM groups 1 -8?  What would eventually happen is that we would end up with very few people in LSM 1 and the most in LSM 7 & 8! As the population attains access to services and durables, their standard of living becomes better so they will naturally move up the LSM scale. The LSM groupings are not only used as a segmentation tool, it is also used for the selection of appropriate media, therefore, no media related variables are used in its construction.   They do not include personal attributes (except in 1995 and 2000 LSMs) and income is never used – however we do get an average household income for each group!

The bottom line is that the LSM Groupings put people with similar behaviours together.   In 2000, we had the introduction of LSM 7 low and LSM 7 high, LSM 8 low and LSM 8 high groups.  These were then called LSM 7, 8, 9 and 10 respectively.

The media and marketing industries are constantly asking for the ability to segment markets further.  We are always wanting to drill down more, ensure we achieve maximum reach with minimal wastage of the primary target market.  But what we often fail to think about is that the more demographic filters we include, the smaller the sample size and the more unstable the results will be!   The LSM groupings therefore allow us to maximise variations between the LSM groups and minimise the variations within the groups.  However, having said this, we all know that there are many people in LSM 10 who earn a household income of more than R60 000 per month!   The AMPS LSM 10 definition however sites an average household income of R23 053 per month.

The new extended LSM 7 – 10 groupings give us a better grouping of similar people!  

Attached are a couple of slides with the population breakdown by LSM group and what percentage of the population fall into each group as well as top line information of each group.  The slides give one an indication of average age, education levels, media consumption  and some interesting general information.   Yes, it does give you the average household incomes of each group, but we are still a long way of getting a true reflection of the high LSM group incomes.   It’s not surprising though, would you tell an interviewer how much you earn?

Please remember that LSM’s are not the only demographic segmentation that you can use.  There are lifestages, education, household purchaser, occupations, genders, age and many others that one can use…

Should you wish to look at specific information, please do not hesitate to contact your Media Strategist or Planner who will gladly do the necessary analyses for you. 

Fond regards

Your friends at The MediaShop
 
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