Why Demographics Fail: Building Fast Friends at Scale Through Values with David Allison

Sam Sivarajan: 00:01

Hi, everyone. I'm Sam Sivarajan, and welcome to the Future Ready Advisor. Today, I'm delighted to have David Allison with us. David is the founder of the value graphics research company and his book, The Depth of Demographics, challenges traditional assumptions about consumer behavior and decision making. For financial advisors and wealth management executives, this shift from demographics to values-driven insights has profound implications for client engagement, business development, and service personalization. David, welcome to the show.

David Allison: 00:38

Thanks for having me over, Sam.

Sam Sivarajan: 00:40

Delighted to have you. I've been, I'm enjoying your book and I think that the audience is going to really value your insights as well. David, you've built your career around challenging the way we think about understanding people. What first got you interested in this area and what was the moment that made you realize that demographics weren't enough?

David Allison: 01:05

Well, so the origin story that we're all supposed to be able to pull out of our pocket when we want to. Here we go. I had a marketing company and we worked specifically with large scale real estate developers around the world. And we would help them name their buildings and like lease, sell, rent, whatever it is they were trying to do. We'd build those little fancy presentation centers and the brochures and the billboards and all that kind of stuff. And like everybody in every industry, including wealth advisory, the first thing we would do is sit down and try and figure out who are we doing this for? Who are the clients that we're trying to attract to come and buy or rent or lease stuff? And so we'd use demographics to understand them. you know, inevitably the time period I was doing this, was aging baby boomers. And so we just kept talking about aging baby boomers so much that I eventually just gave them a name and called them Bob and Sally. So Bob and Sally were always the clients that we were doing things for. So we'd run around and we would, you know, do a bunch of creative work and do a bunch of strategic thinking and buy a bunch of media and do all this stuff. And then we'd sit back and we'd see what happened.

Sam Sivarajan: 02:13

Mm-hmm.

David Allison: 02:26

and we'd sell out a condo tower, let's say, in downtown Gotham City somewhere. And about four years later, I would get to be in a room and see all the people who bought condos. And we would be at the grand opening, there'd be a ribbon cutting and a...

Sam Sivarajan: 02:33

Right. Yes.

David Allison: 02:53

We'd lie and tell everybody it was champagne. It was Prosecco. We all knew it was Prosecco, but we kept calling it champagne. And Shrimps on Sticks. Can't have an opening without Shrimps on Sticks. And I'd look around the room and go, who the heck are you people? Because you're not the people I targeted. Why are you here? We didn't think about you in terms of our messages. We didn't buy in your channels. And yet here you are. Thank you for showing up, making us look like rock stars sold out this condo tower.

Sam Sivarajan: 03:04

You're happy to have them, but they weren't who you were marketing to.

David Allison: 03:07

Exactly. So I sold that company to management and decided I was going to try and crack that nut and figure it out. So I started talking to friends who worked in other sectors like retail and insurance and banking and said, does this happen to you? Do you target a group? then other people show. they all of them said, yes, we have no idea why we have, for example, one friend who was in retail. So we have stores all around the world.

Sam Sivarajan: 03:23

Mm.

David Allison: 03:33

We have these personas, these ideas of who we're talking to. And then I go and stand in the stores all around the world and they're not there. All these other people are, but those people were spending all this time, trying to talk to, they're not there. So I thought, okay, this is a big inefficiency. We're trying to talk to people, understand people, and whatever tools we're using, they aren't working and we're just getting lucky. So let's see if we can remove some of that risk and figure out what's really going on. So long story short,

Sam Sivarajan: 03:35

Mm-hmm.

Mm-hmm.

David Allison: 04:02

quick dive into human behavior and behavioral science, and it becomes very obvious very quickly that regardless of what lens you're looking, psychiatry, sociology, psychology, neurology, all these different groups of scientists who study how do people decide things, which is what we're talking about here, how do they choose an advisor? How do they choose a condo? It's all about how do people make decisions.

Sam Sivarajan: 04:20

Mm-hmm.

David Allison: 04:27

The one common thread through all of these decades of study is that people only do things that align with their values. So that was the eureka moment. It's like, ⁓ it's not about demographics. It's about values. So we were accidentally saying stuff that aligned with people's values. And that's why they were showing up. So that's a cool thing to know. But how do we know what their values are in advance? That's the secret, right? We need to figure that out. And that's where the work began. And we started to build this massive database. And now we have the ability to understand the values of a group of people that we're targeting.

Sam Sivarajan: 04:47

Mmm.

David Allison: 05:05

before we spend money on them and try and get them to do the things that we want them to do.

Sam Sivarajan: 05:12

Now, look, it makes intuitive sense, right? mean, you know, my demographic, whether it's age, whether it's income, whether it's gender, et cetera, I'd like to believe that I'm not, you know, the same as every other person that fits that gender, gender specificity, right? The demographic specificity, I mean. Maybe you can... Just for the audience, talk a little bit about what value graphics is. The database that you talked about, like how you've created it, what the data that has gone in and how you've kind of tested it and validated that kind of information that you've got.

David Allison: 05:51

Yeah, so we're all familiar with demographics. Demographics, a great description of what people are, but that's it. That's what people are. It's not who they are, right? People inside a demographic cohort, it turns out, after we've done all this research, and I'll tell you about in a second, they only resemble each other about 10 % of the time. So Gen Z, they're about 10 % similar to each other. So baby boomers, about 10 % similar to each other. Men, about 10 % similar to each other.

Sam Sivarajan: 06:17

Mmm.

David Allison: 06:17

So if you're using demographics to try and understand who people are, you're getting a 90 % wrong right out the gate. So what else do we have? We have this other tool. Think about this as a three-legged stool. We have psychographics. Psychographics are everything else we know about people from our CRM systems, other research and studies that have been done.

Sam Sivarajan: 06:29

Mm-hmm.

David Allison: 06:37

do they feel about things? How do they like stuff? How have they behaved in the past? Let's put it into the world of an advisor. How much of their money am I managing? What kind of portfolio have we built for them? How long have we been working together? Do I know the whole family? Like all these other things that you know about this demographic group. That's all psychographics.

Sam Sivarajan: 06:51

Right.

David Allison: 06:55

really interesting stuff because you can see some patterns perhaps in the noise signals that you can go, okay, well they behaved like this, they like this stuff, so we keep doing those things. That's probably gonna be good. But all of that information has a flaw. And it's that it all comes from the past, because we know it.

Sam Sivarajan: 07:13

Mm-hmm

David Allison: 07:14

It's all stuff that we wrote down already, right? We know it. Even if it's something from a split second ago, it's historical data. And what we're all trying to understand is how do we get people to do something next? So using historical data to try and figure out the future is like driving the car, looking in the rear view mirror. You might get there eventually, but if you're going to hit a telephone pole and end up in the ditch a few times before you actually get where you want to be. So let's recap demographics, tell us what people are, what they look like on the outside. Psychographics, how they've behaved and all the stuff we've known about them so far.

Sam Sivarajan: 07:31

Mm-hmm

David Allison: 07:49

What we're missing is how do we get them to do the things we want them to do next? And that's about understanding what their values are. So in order to do this, we had to build this giant, giant database. We've done a million surveys now with a big team of translators, 152 languages around the world. hundreds of millions of data points in this data set and what we've measured and mapped for the very first time is what people's values are. And the way we built this and the methodology we can use, we can go into that data set and go, ⁓ those folks that you're interested in understanding, your particular clients, people in Canada who have a net worth, net income of, we've got an income of $250,000 a and a net worth of $1.5 million who are married and empty nesters. What do they all have in common? What are the values they share? Well, it's this, this, this, this, and this. So we can pull that out of the data and say, folks, just like them, here's all the stuff we know about them. So, you know, the simplest way to think about this is because of this database, we now know what buttons you need to push.

Sam Sivarajan: 09:02

And to be clear, when you say values, you're talking about things like family, health, work, and the relative priority that it has for that individual. without kind of giving it away, my understanding, and please correct me if I'm wrong, is that there is a lot of overlap and commonality of values that we share across different groups and across different countries and cultures.

David Allison: 09:31

Yes.

Sam Sivarajan: 09:31

the way that that value is expressed or the priority of that value may differ from group to group. And that's really part of the secret sauce of what your research and demographic, you know, that you provide, et cetera, is to kind of understand for that particular demographic segment, how the values might stack up.

David Allison: 09:56

Yeah, so let's talk about that. Good question. Values, the definition that we use, everybody, seems to be other people have different ways of thinking about this, but for us, a value is something that people use to make as a filtering mechanism to make every decision in their life. So if family is one of your values, you're consciously or subconsciously, you're going to make every decision about everything thousands of times a day based on whether or not it's going to be good for your family. And you might not even know you're doing it.

Sam Sivarajan: 10:24

Mm-hmm.

David Allison: 10:24

but you're going to be so focused on that. It's a filter that you use for everything. Now, many people don't have family as one of their values, and they're not running around trying to make every decision. They may have, let's say, ambition as one of their values, and they're going to make every decision in their life based on whether or not it's helping with their goals and with their ambition. So turns out, after talking to a million people,

Sam Sivarajan: 10:45

Right.

David Allison: 10:48

that there's only 56 values. So that's not something we knew going in. We talked to a million people, listened to why they're doing the things they're doing and how they live their lives. And you go, huh, seems like there's 56 buttons here that we could be pushing in various combinations in order to understand individuals and therefore groups of people. So that's the definition for values. There's only 56 of them. You're correct to say that some groups of people will have this set of values and some will have that set of values. They will overlap in some cases and not overlap in other cases, but it's truly the secret to understanding. If you think about groups of people like schools of fish,

Sam Sivarajan: 11:25

So you get the understanding. If you think about the person you feel like schools are efficient, right? Is this school efficient in the speed of it, in the structure of school, and you see that you might be improved, and you get improved. So what's the creative ability of that? Why is this for something that done?

David Allison: 11:29

There's this school of fish and you see them in the Jacques Cousteau undersea documentaries. They move like a group. So why are they moving like that? Why does this group suddenly vote for this person? Why does this group suddenly go and buy that kind of car? Well, now we know why. because they're chasing a certain set of values that they have in common. So this school of fish are off doing their own thing. This other school of fish are off doing their own thing. Sometimes they come together and some of those members of those two groups of might overlap. But now we can figure all that out. We can see why people are behaving the way they do, why their tribe, why their group, why their cohort is going in one direction and not in another.

Sam Sivarajan: 12:16

No, I think that's, that's completely fascinating. And I think you said something earlier that deeply resonates with me that psychographics is about the past. And I think particularly in the world of financial advice, that's something that we should resonate with us, right? Cause we always say past performance does not guarantee future results. It's a safe harbor statement, but I also see like, you know, like, look, I I've always felt that, okay, the way that you've reacted, for example, in the 2008 crash.

David Allison: 12:32

The old safe harbor statement, right?

Sam Sivarajan: 12:46

It's interesting to know, but it's not defining how you're going to react to the next one. Your circumstances are different. Your assessment of risk and everything else is different. relying on a past behavior or a past preference is important to be aware of, but it's not definitive. And what you're saying, I think, is that if you are aware of their values, those values are as a group are relatively constant, whether it's in the past or the way that you're going to express it in the future. Is that fair?

David Allison: 13:22

Yeah, I mean, let's be frank as advisors who are listening to this, you know that your client doesn't know what they want. Your job is to help them understand what they really need. Now they're going to come in guns blazing and say, I want this, want that, I want this, I want that. sure, important to listen to all of that stuff. But the reason you add value to that relationship is because you can listen between the lines. Look at what they've done in the past. Understand what's happening in the markets. Look at all the different products and services you can put them into and say, you know what they really need? They need this.

Sam Sivarajan: 13:50

Mm-hmm.

David Allison: 13:59

Now that might be a change from what they think they need. So your job is to figure out how do I show them that this is aligned with their values? How do I convince them that this thing that I know is right for them is the right thing for them? Well, to do that, you need to understand what their values are. You need to be proposing values aligned solutions to the problems that they're putting in front of you and the goals and things they want you to help with.

Sam Sivarajan: 14:01

Mm-hmm

David Allison: 14:27

But you need to do all this work based on their values. If you can sit down with a client and say, listen, I know you said this, this, this, and this, and this. But if your goal is this, honestly, you need to be thinking about these things and doing it this way. And here's why. And if you keep that here's why aligned with what you know their values are.

Sam Sivarajan: 14:36

Mm-hmm

David Allison: 14:47

They're gonna light up like a Christmas tree and feel like you've been reading their diary and that you know the deep inner workings of their hearts and their minds and that you're absolutely correct. And that's why they'll stay with you is because you understand them that well. You're not just putting them into products and services that are aligned with their demographic because they're only 10 % accurate. Demographics are only 10 % accurate.

Sam Sivarajan: 15:05

Mm-hmm.

David Allison: 15:47

No, I think that's bang on and I think even or even what their stated preferences are because I think the reality is as you said and you know, my experience shows that They believe they want something But only because they're told that they want to believe it I had a client that came in saying that in 2007 that they wanted to 15 % returns and you know I'm gonna ask them why then we figured out what his value really was. It wasn't 15 % returns That's just a number that he picked up because somebody else had mentioned it to him at a cocktail party or something else. you're right. think trying to align with the, you know, that's the art, trying to align with their deepest values, I think is going to create a level of trust and, you know, a client relationship that I think is going to stand the test of time with market volatility and everything else.

David Allison: 15:46

Right.

David Allison: 15:58

Listen, I speak to, I do a lot of work as a public speaker and I've spoken to so many groups of wealth advisors and financial advisors and insurance advisors and you name it. I've been in front of the biggest companies in the world talking about this stuff. And the one thing I've noticed from having conversations with individual advisors before or after my time on stage is the good ones are the ones who realize that this is, It's a cliche to say this. This is a relationship business. You know, there's all kinds of computer programs and things you can subscribe to that tell you all the stuff that you need to know about the numbers and the spreadsheets and all that kind and yeah, you need to understand that stuff. But really the great advisors are the ones who end up being so tight with their clients that those clients aren't going to go buy a stick of gum without asking their advice first. My kids are going off to college in the next five years. I'm worried.

Sam Sivarajan: 16:36

Right.

Mm-hmm.

Mm-hmm.

David Allison: 16:58

How can we get, I'm thinking about selling the second home. I'm thinking about buying a third car. I'm thinking about my wife and I want to go on a great vacation. You want those clients to be calling you for all of that because that's what embeds you in their lives and makes you an invaluable part of their family. And in order to do that, you need to know what's driving them. You need to know who they are on the inside. You need to understand how to connect with them at that level.

Sam Sivarajan: 17:09

Right. Yep.

David Allison: 17:23

Like you connect with your best friends. You know exactly what you need to do and say to keep your friends happy and engaged and you need to understand them that well. And to do that, you need to know what their values are.

Sam Sivarajan: 17:35

No, I think that's a great point. Now, it sounds easy. And obviously it's much harder. And I think one wrinkle, it's an eye opening example that you shared with me when we chatted earlier, is your Fox News and CNN study. know, the two audiences that, you know, most of us would assume are polar opposites, that their values are completely, you know, don't overlap at all. Can you share your findings?

David Allison: 17:51

Yeah.

David Allison: 18:24

Yeah, I will. And I just need everybody who's listening, regardless of your political affiliations, to just park your emotions until I'm done, because this is a very hot topic right now for all kinds of obvious reasons. But when Mr. Trump first threw his hat in the political ring in the first time round, I started to see some divisiveness going on in the United States and selfishly, I thought this would be a great opportunity for me to get some media coverage. So I thought, hmm, how can I just once in my life hear the Anderson Cooper say, according to a new value graphic study, that was my goal. That's all I wanted. I just wanted to hear Anderson Cooper say that once out loud. I thought, okay, well, the media loves reporting on the media.

Sam Sivarajan: 18:16

Mm.

Sam Sivarajan: 18:41

haha

David Allison: 18:50

So if I did a study, instead of looking at Republicans versus Democrats and taking advantage of this divisiveness in the United States for my own personal gain, if I did the study on Fox News loyalists versus CNN loyalists, I'd be getting to the same place, but I'd be doing it in a way that was like click bait for Andrew Cooper, and I wanted to talk about those folks from Fox.

Sam Sivarajan: 19:04

Right.

David Allison: 19:14

And so we launched a study, used our hundreds of millions of data points, profiled folks who are hardcore CNN versus hardcore Fox viewers. And what we found is that there was no story there. I never got my wish. I never got Anderson Cooper interested because here's what we found. For all the values that rank in the top 10, 12, 13 values for both of those audiences, they're very, very similar.

Sam Sivarajan: 19:43

Mm-hmm.

David Allison: 19:43

So for example, the value of family incredibly important on both sides. Now what they think is right for their family is different, but the point is they agree that family is one of the fundamental core filters that they're using to make every decision in their life. So the end of the story is this fast forward to January 6th, a few years later, that day on the Capitol when the mobs broken and caused all kinds of havoc and

David Allison: 20:08

You can view that through a historical lens however you want. I'm not here to be on either side of this. I'm here to say this. There was a moment where a police officer thought he was gonna die. We've all seen the footage. He's been pressed up against a wall behind an iron fence and people are pushing on it and shoving it and he's crying and screaming and yelling and he thought he was gonna die. People are beating him with the ends of flagpoles and they are screaming out loud. If you listen to the audio, kill him.

Sam Sivarajan: 20:14

Mm-hmm.

David Allison: 20:38

until he says, have kids. And that's the moment that you could feel the energy in that clip just kind of change. And people backed off. Now they didn't like apologize and give him a kiss on the forehead and give him a bandaid, but they didn't kill him. He did not die. His soul was saved that day because of that value of family.

Sam Sivarajan: 20:46

Mm.

David Allison: 21:02

And the people who were on the other side of that confrontation, they did not become murderers that day. Their souls were saved too because of the shared importance of that value. So in those heightened, heightened moments like that, which hopefully none of us will ever have to experience, if a value can bring those two sides together, that's how powerful they are. Now imagine if you knew that.

Sam Sivarajan: 21:16

Mm-hmm

David Allison: 21:30

about the people you're trying to engage and motivate and inspire in your life, how powerful it would be to be able to point to those things that you have in common and say, I understand you. I know who you are. I know what you're trying to do. And so let me help you with that.

Sam Sivarajan: 21:47

That's a very powerful story. And it reminded me of Jonathan Haidt's work in the book, The Righteous Mind, where he was looking at more on the moral value side. But he found something similar, that people across political and cultural lines often hold the same values. They just differ in priority that they give those values and how they choose to act on them. So to your example of Fox versus CNN, family is important to both. Their definition of family may just be very different. And the way that they think they support and prioritize family may be very different.

David Allison: 22:20

Right. But when you think about conflict resolution, the first step, nothing good in the world has ever been solved by doubling down on what makes us different. Nothing ever. History teaches us this. The only way to get to a solution around anything is to find common ground.

Sam Sivarajan: 22:31

Right.

David Allison: 22:37

And then from there, work on solving the places where you don't agree. I'm just starting, somebody pointed this out to me the other day and I'm just fascinated with it and I've been starting to dive in a bit. But if you look at training for hostage negotiations, the first thing that a hostage negotiator tries to do while they're talking to someone who's got 20 people locked in a bank with a gun is to find some common ground, to find some common values.

Sam Sivarajan: 23:02

Right.

David Allison: 23:04

And once they can see each other in each other, then they can start to figure out how we're going to get ourselves out of this situation. They're incredibly insanely and powerful to understand what someone else values. And now that you've been listening to this podcast, my friends who are listening, hi, how are you? You'll start to notice this when you're in a situation where somebody's upset. If you can ask some questions and figure out where is that really coming from? What values are they feeling are threatened right now? And you'll be able to talk them down. Or when you see somebody who's elated or incredibly excited about something that's happened, ask them some questions. You'll see where that's coming from. And you get to know a little bit about their values. And now you can hopefully help them have more of those moments in their life. it's like a magic parlor trick sometimes, but it's really just human nature.

Sam Sivarajan: 23:36

Mm-hmm. Mm-hmm.

Sam Sivarajan: 24:00

No. No, that's what I found powerful. And I like your example of the hostage negotiator. I mean, it doesn't mean that the negotiator is agreeing with the hostage taker, but I think in many cases, the reason that they resolved peacefully is that the it's not that the the the person taking hostages thought that he was going to escape, you know, free and that he suddenly says, you know what? OK, I'm OK. We jail, et cetera. I think that it's just. in many cases, they wanted to be heard, right? And they never felt that they were heard, you know, and the hostage negotiator was the first person to kind of, you know, engage them in that kind of conversation to kind of be heard. Now, this is a very extreme example, right? Like, we're not going there, etc. But I think that the I think for all of us in any kind of people relationship type of business as financial advisors, or, you know, in marketing, etc. I think we're dealing with people that want to feel heard, right? That this is the need that you're looking to serve, etc. That you why you want to be my financial advisor and the more that you can convey to them that you have actually heard what they're saying and what they're not saying. I think it goes back to the point that you've got, you know, you've built trust and value in that relationship, right?

David Allison: 25:18

Sam, it's it's a you know, the wealth advisory community has been talking about values driven investment advice for a decade or more. And here's here's the issue and why I'm so glad that we're having this chat today. The way we try have the way every not just the wealth advisory role, but every everybody the way we've been trying to figure out values so far has been by asking people, what are your values? And when you do that, people will, I guarantee it, they're gonna lie.

Sam Sivarajan: 25:49

They're going to tell you what they think you want to hear.

David Allison: 25:51

or some version of themselves that they would like you to or that they maybe are convinced themselves that this is who I'd like to be. But it's not really the values they're operating on at a neurological level to make all their decisions in life.

Sam Sivarajan: 26:05

Right.

David Allison: 26:06

So what you got to do is get past that. mean, think about it. You put a hundred people in a room and say, ⁓ okay, who values family? Like who's not putting up their hands, right? They're going to look like a serial killer if they don't put their hand up at that moment. Who values the environment? Like everybody's going to put up their hand. Right. ⁓ but there's people out there who don't value the family and don't value the environment. know, so you got to be able to find a way to get past those surface level questions.

Sam Sivarajan: 26:18

you

Great.

David Allison: 26:35

So our research is all based on what we call secondary lines of questioning.

Sam Sivarajan: 26:39

Okay.

David Allison: 26:39

So we've never asked anybody about their values. We've asked them about their day and about what they do with their hobbies and what kind of sports they're into and how do they feel about religion and marriage and sex and relationships and friendship and all these other sorts of things. And when you listen to people talk about what they do and the decisions they make, you listen to a million people around the world tell you all that stuff, you see patterns. And you're like, these folks are all talking about family.

Sam Sivarajan: 27:02

Right yep

David Allison: 27:07

There's a thing, that's a value,

Sam Sivarajan: 27:08

Yep

David Allison: 27:09

right? So you gotta come at it in a more scientific way than I know many of the ways that we've been trying to do it so far.

Sam Sivarajan: 27:14

No, I think that that totally makes sense. So this is behavioral finance, you know, at its core, you know, people, what people say and what people do are very different things. And to go back to your example of, know, do you care about the environment? You know, nobody, virtually no one's going to say that they're not the deeper level questions are going to be well, you know, What do you drive? What do you, have you donated to environmental causes? Are you paying more for local food versus cheaper processed food? There's a whole host of questions that you can ask, but those kinds of questions actually elicit the actual behavior, right? That if you were environmentally, you don't have to do all of it, right? But if you are truly environment truly matters to you, but you're not doing any. thing that is pro environment, etc., then it's perhaps not a real value. Is that a fair comment to make?

David Allison: 28:09

So it goes one, it is, goes one layer deeper though. So let's say you ask people, have they ever donated to an environmental cause? And so that gets you to a behavior that would seem to support that they are, have some sort of concern for the environment, unless they're doing it because their friends pressured them into it.

Sam Sivarajan: 28:13

Mm-hmm.

Sam Sivarajan: 28:30

Right.

David Allison: 28:30

or because by making that donation, they're now allowed to sit in a certain place at the big gala fundraising dinner. And that's about social standing and status, not necessarily about the environment, right? So looking at behaviors is one level better, but you want to understand why those behaviors.

Sam Sivarajan: 28:40

instead of in barb. Yeah, yeah.

David Allison: 28:52

What's driving that? You know, a great example, you know, the times we're in right now, some of my examples need updating, but I always used to talk about Tesla as an example. Why would you buy a Tesla? Now, forget about the current kerfuffle about Teslas. When they first came out, they were seen as a badge of honor that this is a proof that I'm an environmentally friendly person. And Hollywood movie stars were falling over themselves to get into Tesla's. But why? Was it really because they cared about the environment or because Hollywood movie stars were falling all over themselves to get into Tesla's or because all my friends had one or the ladies I play bridge with once a week all have one or what was the real impetus there? People buying Tesla's were not all concerned with the environment. There's all kinds of reasons why that behavior was coming to the forefront.

Sam Sivarajan: 29:30

Yep.

Sam Sivarajan: 29:42

That's a great point.

Sam Sivarajan: 30:00

So David, you've applied value graphics across multiple industries, from media to healthcare to marketing. Can you share with our financial advisor audience an example of two or two of where you think it's had a significant impact and perhaps the lessons that financial advisors may draw from that to their own work?

David Allison: 30:11

Yeah, okay, so the lesson, I'm gonna tell you the lesson for this story in advance. The lesson is don't judge a book by its cover. And here's the story. I was asked to come and speak to a large international conference of people who own companies who employ the blue collar trades. So their employees are HVAC technicians, carpenters, electricians, et cetera, et cetera, et cetera.

Sam Sivarajan: 30:15

Okay.

David Allison: 30:36

And they asked me to get up on stage and speak about how do we get more people to get into the blue collar trades? Because like many professions are having a hard time with talent recruitment. It's a difficult thing to get more folks to jump into that industry. And in that industry in particular, you got to go into an apprenticeship program and get your ticket and et cetera, et cetera, et So we did our study and like I do for every keynote, I profile a group of folks that my audience wants to understand. And I get up and tell them what I found.

Sam Sivarajan: 30:43

Mm-hmm.

David Allison: 30:58

And one of the things I found was that this audience of people who have considered a career in the blue collar trades, but are not yet quite made the jump. One of the things they over index on like an insane amount, a huge, huge margin is the value of service to others. Now it's not a hugely.

Sam Sivarajan: 31:08

Mm-hmm.

David Allison: 31:19

normal value for us to see. It's not high on the list many, many, many times in many, many places. We see it every now and then, but this was off the charts more important to this group of folks who are considering a career in the blue collar trades. So I got up on stage and I said, listen, you're saying all the right things. My friends, you're saying, you know what, you're going to earn more money. You can get out of the shift work at the bar, the restaurant, the grocery store where you're working right now, get into an apprenticeship program. You're going to have a solid skill that's transferable. Maybe this is your chance to settle down and build a family. You don't want to work weekends anymore. I get it. This is a great way to do that. But what you're not saying that you should be saying is this is your chance to be in a helping profession. This is going to help people have.

Sam Sivarajan: 31:44

Mm-hmm.

Sam Sivarajan: 31:58

Hmm.

David Allison: 31:58

a safe, warm, comfortable place to live and work and play and grow.

Sam Sivarajan: 32:00

Mm-hmm.

David Allison: 32:03

So I finished and did the rest of my speech and I get down off the stage and this guy comes over to me and he said, listen, I have a story for you. I said, okay, cool. What's your story? He I have seven offices in seven cities across the Southern United States. And in each office, there's a fleet of vans. And in each fleet of vans, there's one that's painted pink because all the money from that pink van every day goes to fund breast cancer research because my wife, had a story why they settled on that. I said, my friend, that's amazing. Look at you. You found the service to others value. You did not need to be here today.

Sam Sivarajan: 32:32

Mm-hmm.

David Allison: 32:33

to listen to my keynote you founded on your he said no that's not the story ⁓ okay what's the story he said well the story is every day at every office my guys is still largely guys in that industry my guys fight over who gets to be in the pink van i fight over it

Sam Sivarajan: 32:47

Seriously

David Allison: 32:50

because service to others is so much of such an important value. They're looking for everything they can. So now here's back to my lesson. Don't judge a book by its cover. If I'd sat down and said to you, OK, our job today is to figure out what we can do to help some folks in the blue collar trades. Would we have ever got to pink vans? Never.

Sam Sivarajan: 33:10

Mm-hmm

David Allison: 33:10

We've got to stereotypes about, ⁓ blue collar trades, they're guys, you know, they probably like their beer. NASCAR is probably a big thing for them. We're going to, you know, talk to them about sports because, you know, they're, they're, these are men's men who are going to enjoy their football, their hockey, whatever it is. We would never have gotten to pink vans, but here we have this data. Exactly. Yeah. So understand the values.

Sam Sivarajan: 33:28

Right.

Sam Sivarajan: 33:35

Well, relying on demographics and psychographics, right, to get to that assessment. That's really cool.

David Allison: 33:38

and you get to those little secret things, those little unexpected nuggets that tell you who people really are on the inside.

Sam Sivarajan: 33:48

That's cool.

David Allison: 33:48

Yeah, it's a good story. I like that one.

Sam Sivarajan: 33:51

Now you've talked about creating quote unquote fast friends at scale by aligning with people's values. Can you explain this concept and how advisors might be able to use this insight to build deeper trust with their clients faster?

David Allison: 34:09

Yeah, that's two questions. first question, you have to remind me of the second one after I get through the first one, because as you've probably discovered by now, I tend to ramble a little bit. let's let's start with fast friends of scale. So this is just another way to think about this, you because we've all had this happen to us, where we've been away on a vacation or at a conference or something generally happens when we're outside of our normal routine. And you meet someone for the very first time and you talk to them for 10 minutes and you just click.

Sam Sivarajan: 34:14

Alright.

Sam Sivarajan: 34:26

Mm-hmm.

David Allison: 34:37

And it's like you've known each other your whole lives. And you might even say that like, are you sure we haven't met before? This is really weird. It's kind of uncanny that I know you this well. And you're finishing each other's jokes before the punchline. And you just like something's going on here. And then the next day you meet your friend, your new friend for breakfast, let's say at the conference and they're, they're not in a great mood. They had a bad phone call from home last night, something happened. I don't know what it was, but you'd know exactly. what you needed to say in order to cheer that person up. Because what has happened here is you've met someone whose values are just like yours.

Sam Sivarajan: 35:23

Right.

David Allison: 35:23

They're using the same filters to process the world around them. So when they're sad, when they're upset, you know how they're processing that and you know how to talk to them in a way that's going to cheer them up. If something great happens, you probably don't even need to talk to each other. Something crazy happens over on the other side of the room. You're at a cocktail reception and suddenly Stephen King's clown just shows up and is standing over in the corner looking all creepy. you just look at each other and you just go, uh-huh. You don't even need to talk.

Sam Sivarajan: 35:42

Right. In the same way.

David Allison: 35:42

because you're processing the world in the same way. So that's our fast friend. Now, if you understand your clients or the folks you would like to have as your next set of clients, if you understand them that well, that's fast friends at scale. Now you know exactly what you need to do to get them excited, to relate to them in a way that you don't even need to speak half the time because you just know each other that well. Now coming to work every day is just about doing things for your friends. You know how to get your friends excited. You know how to get your friends to agree with you. You know how to get your friends to, I don't know, go hang gliding this afternoon, something kooky that you would never otherwise do because you know how to talk to them. So how can financial advisors use this? This is the second part of your question.

Sam Sivarajan: 36:23

Right. See, you remembered.

David Allison: 36:24

Yeah, I did. did. That's very unusual for me. I'm old. I walk into a room sometimes. I don't remember why I walked into a room. So it's crazy. How can financial advisors use this? Well, I mean, the obvious answer to that question is you got to figure out what your client's values are. So how can you do that? I'm going to give you three questions. Before I do that, here's the first thing you got to do. Start asking the right questions.

Sam Sivarajan: 36:27

Ha

David Allison: 36:50

You know, we all send out surveys and we all trying to find out more and we ask about demographics, how old are you and how many kids you have and what's changed about your income. And we ask all that kind of stuff. But as we know, all that does is give us about a 10 % correct guess at who these folks are. And we ask questions about ourselves. Like, what do you think of my service? Am I amazing? Would you tell me, would you tell your friends about me? Like we like to know what they think about us. But what we never do is ask them,

Sam Sivarajan: 36:56

Mm-hmm

David Allison: 37:19

What's on your mind? What gets you up in the middle of the night with worry? And what makes you elated? So find ways to ask questions about what's going on in their life. And if you listen to those questions, the answers, you'll start to see patterns. You'll start to see that, wow, the things that excite them, the things that depress them, the things that they're worried about, the things that they're focused on, somehow all has to do with ambition or family or the environment or personal growth or health and well-being or whatever it might be, you'll start to see those patterns emerge and those are their values rising up to the top. these three questions I will give you. You can use these word for word or you can put them in your own words, but we call them the three telltale questions. We've tested these around the world with everybody from Wall Street hedge fund investors to doctors who volunteer their time with the United Nations to everybody you can imagine.

Sam Sivarajan: 37:54

Mm-hmm.

Sam Sivarajan: 38:10

Thank you.

Sam Sivarajan: 38:16

Mm-hmm.

David Allison: 38:16

And if you ask these questions and listen, you've to really actively listen. People will tell you what their values are. So the first question, why do you go to work? You'll hear everything from, it's where my friends are. I feel like I'm making a difference. I'm trying to provide for my family. I want to.

Sam Sivarajan: 38:20

Mm-hmm.

David Allison: 38:33

I want to work on my art collection. There's all kinds of different reasons why people make the decision, which is driven by their values, to do this thing they do for eight or 10 hours a day, six or seven days a week. So that's the first one. The second one, you just won the lottery. Why would you give away half? Not who would you give it to, but why? Why would you do that? Because we're trying to understand.

Sam Sivarajan: 39:02

What motivates them?

David Allison: 39:02

the values that drive that decision, right? And the third one, which is my favorite, and it's a great friend tester, get your friends over for dinner, give them all a couple of glasses of wine, pop this question out and you'll learn a lot about your friends. You get to say one thing to yourself from 10 years ago, just one thing. What would it be and why that thing? And frankly, I really don't care what it is you wanna tell yourself.

David Allison: 39:25

buy Google stock, like whatever. But why would you choose that of all the things that you could have said to yourself? Why that one? Now, if you ask those questions often enough, slide them into conversation, put them into your next survey that goes out. I mean, if you're managing a team, get your team to use those as like networking events, cocktail chatter, do as many things as you can.

Sam Sivarajan: 39:26

But why?

David Allison: 39:53

Listen for the commonality. People will answer them in different ways. They'll use their own words. But what you're trying to do here is figure out what is the impetus, the triggers, the drivers behind these monumental decisions of why do you go to work? Why would you give away bunch of money? And what would you say to yourself if you got to say one thing to yourself from 10 years ago? Those are values. Those are values bubbling to the surface. And in a large and complex and statistically accurate way, that's what we've done a million times. around the world in 152 different languages and far more questions, far more academically precise, but it's the same process as those three telltale questions.

Sam Sivarajan: 40:31

That's awesome. I love it. Great questions. How do you see value graphics, the research, the database applying it, complimenting the traditional CRM data that advisors have to use? mean, you're not talking about replacing it. You're talking about complimenting it to give a more complete picture of their clients. And because they ask two part questions, I mean, just so that you can think about this. What's your vision for how advisors can integrate this thinking of the complement of the two into their everyday practice?

David Allison: 41:08

Okay, well, I'm glad you asked this question. We've already covered the first half of that really. It's a three legged stool, right? You still need the demographic information. As an advisor, knowing that your client is on the verge of retirement is an important thing to know. That's a demographic piece of information. You still need the psychographics, the second leg of the stool, knowing that they are absolutely risk adverse and they lost all their money in the great. crash of 2008 or whatever. That's really good to know because that'll help you figure out what to do. We also got to know what they freaking care about so much that they use it to make every decision in every aspect of their life, whether they know they're doing it or not. You got to have all three demographics, describe a group of people. Psychographic are a record of what's come before and value graphics tell you how to engage, inspire and influence what they do next.

Sam Sivarajan: 41:34

Mm-hmm. Mm-hmm.

David Allison: 42:00

So, you need all three. Where do I see this going? We're actually talking to a few different organizations about partnering and beginning in the wealth advisory world to build a dashboard that would, or a SaaS app or something. I don't know exactly what it's going to be yet, but we want to unlock, we want to find a way for individual wealth advisors either at one particular company. Maybe just wanted to, again, not sure how we're gonna approach this, but we can build a tool that allows an advisor to enter information about the demographics and psychographics that will then provide them with the accurate value graphics for that client.

Sam Sivarajan: 42:30

Mm-hmm.

David Allison: 42:44

And if it's plugged into say some, you know, XYZ, Investment Inc's products and services, it would also then be able to link to those and say, and here's the sort of portfolio mix that makes sense for those values, for those people based on those demographics and psychographics.

Sam Sivarajan: 42:57

Right.

David Allison: 43:00

So I desperately wanna build this thing because then once we're finished doing that in the Wealth Advisory World, we can take that thing and we can build the same tool for people who manufacture pet food and for people who sell luxury vacations. so because the Wealth Advisory World has been so focused on values-driven investing for so long, it seems to me to be the place to begin.

Sam Sivarajan: 43:00

So I guess I'm gonna go with this thing, because then once we're finished with doing that and developing the rest of world, we can take that dream, like develop a seed school for people who, in many countries, our communities are people who sell luxury based

David Allison: 43:27

to build this initial tool and then use it as a way to, as a prototype, if you will, for how we

Sam Sivarajan: 43:33

Mm-hmm.

David Allison: 43:34

can do this in other industries. So actively engaged in conversations with some really interesting organizations about that. Open to more, by the way, if anyone's listening and wants to have that chat. And yeah, we'll see where it goes from here.

Sam Sivarajan: 43:49

Very interesting. So I'm gonna ask you to take out your crystal ball. Fast forward five to 10 years. How do you see or what would you like to happen in that values-based insights transforming the financial services industry?

David Allison: 44:06

Well, I think you've all, you all have this sorted out already. You know that aligning investments, which is, when you think about it, what's more personal than this is people's money. This is their livelihood. This is their ability to provide for their family. Knowing that that is aligned with their values, you've already all figured that out. I can't tell you how many conferences I've spoken at that have been about values driven investment strategies. We, you know, this term. So that's great. I hope that it takes a lot less time than 10 years that we're able to actually find a way to inject into this industry accuracy around that promise. You all know where you want to get to. And so far, the data has been missing to make it an accurate, statistically representative possibility. And we got that data. You know it's important. We're to try and bridge that gap. And I don't think it's going to take you 10 years. And it's going to take a lot less than that. So hopefully.

Sam Sivarajan: 44:55

Mmm.

David Allison: 45:07

we can make this whole notion of values driven investing a reality and a truth instead of a wish and a hope and a dream.

Sam Sivarajan: 45:15

Well, and I'll say one thing, I think, you know, what is really resonating in a lot of financial advisors minds is the advent of AI and the technical stuff that's coming in. And in my mind, and I've said this many times, the key, it's not that AI is going to put financial advisors out of work. I think it's going to help a financial advisors focus on what makes them different. It's the human element.

David Allison: 45:43

Yeah.

Sam Sivarajan: 45:43

And you're adding another part of it is that if you can actually identify the values and be able to align with your clients values, I don't think AI has got a hope in trying to match that anytime soon.

David Allison: 45:54

No, no, no. And here's the thing, you know, that human element, we keep talking about that, about how that's what we need, the challenge we need to rise up to right now is to lean into being more human. And that's, that's noble. But understanding human behavior, it's a messy thing. Like you just look at basic supply and demand and economics. what happens in the real world versus what should happen based on basic laws of economics are not always that human beings are irrational, illogical, messy, emotional creatures. So we tend to talk about wanting to be more human, but we run away from it when it comes to actually putting money on the table because it's just unpredictable. So the change here is now it's not unpredictable. Now we have data.

Sam Sivarajan: 46:24

Right

Sam Sivarajan: 46:35

Yeah.

David Allison: 46:46

And I'm at this moment where with my work where I'm just trying to find a way to bridge that gap between, yeah, we all want to be more human. Now we have data that allows us to do that in a way that is not full of risk that is precise. And so just making that last leap, you know, we've been working on this for 10 years building this data set and figuring out this methodology and doing all of our things we've done. We're just like, we're so close to the finish line now where we can just jump across and say, okay, finally, human behavior is not a guess. Human behavior is now measurable and mappable. And we will know how people will react if you do this versus how they'll react if you do that. So close.

Sam Sivarajan: 47:21

Mm-hmm

Sam Sivarajan: 47:35

No, I think that makes total sense. might, and I'll add one thing before we go to the closing segment of the podcast. I think what you were saying is bang on. think for much of the 20th century, people talked about the rational person and how people make decisions. so anybody that did something that was deemed iras, ⁓ you know, that didn't fit that rational model was deemed irrational. Behavioral science finance and behavioral science came in to say well there are actually things that are going on that we're not observing but that actually and when you get digged down into it it It's not irrational, right? We just don't understand what's going on in people's heads

David Allison: 48:06

For the best example.

Sam Sivarajan: 48:07

What you're saying is that going down even one step further to say that, you know, behind even that is there a value. So what may on the surface appear irrational, may be very aligned. If you understand the client's values and why this decision is aligned with their values, irrationality goes out of the picture at that stage, right?

David Allison: 48:20

Bingo.

David Allison: 48:32

Well, the most obvious and almost cliche example of this in the economics world is Veblen goods, right? You jack the price of something, it's supposed to temper demand. But with Veblen goods, you jack the price on something and people want more of it and more people want it. So that's totally irrational unless you realize that by making it more expensive for some folks, that's now more aligned with their values because it's more exclusive and more of a status symbol than it was before.

Sam Sivarajan: 48:50

with their values.

David Allison: 48:54

So it becomes very logical when you look at it based on why are people behaving the way they're behaving.

Sam Sivarajan: 49:01

Well, this is why Tiffany sales still goes up in in the recessions and market downturns, right? So it's, you know, it's recession proof. David, we're coming to the end of our podcast. So I have a few final rapid fire questions for you that I ask all my guests. So

David Allison: 49:17

Okay, I'll warn you, I don't have a very much of an internal filter. So I have no idea what will come out of my mouth if it's supposed to be rapid fire. Let's see what happens.

Sam Sivarajan: 49:24

No worries. So that's even better. So professionally, what is the most important lesson you've learned over the years?

David Allison: 49:31

Hmm, the last one. And the last one I've learned is that you can't worry about everything. got to have real wisdom comes from understanding what you can ignore.

Sam Sivarajan: 49:42

I totally agree. And that comes with time and experience, right? Number two, what is one practical tip you would offer listeners keen on applying your insights?

David Allison: 49:54

Don't judge a book by its cover. Just because you run into somebody who you think fits into some kind of demographic category, understand that demographics is nothing more than large scale stereotyping and that it's absolutely inaccurate. Just because you understand that a group of people might be wealthy, that you're trying to understand how to attract my next group of high net worth or ultra high net worth individuals that I want in my practice, doesn't mean they're all the same as each other. They all have different ideas of what's important. Demographics are incredibly misleading. So just check yourself every time you find yourself thinking about people based on a demographic stereotype.

Sam Sivarajan: 50:36

think that is real great wisdom. Couldn't agree more. David, this has been a fascinating discussion. So thank you.

David Allison: 50:44

I thought you said there was three rapid fire questions. That was only two.

Sam Sivarajan: 50:48

Is there any more lessons that you would share to?

David Allison: 50:53

okay. It's an open-ended one. I was supposed to have read the show notes before we began, so I wouldn't have, I should have known that in advance. An open-ended, one last lesson that I would like to share. Yeah, there is. fact, there's this. This is focus on values and understanding people based on values is going to make you more successful. It's going to work better. I promise that. I want 100%. But there's a bigger and more important reason why we have to be doing this. And it's about those demographic stereotypes. Because if we don't, start understanding ourselves and people around us based on what's on the inside. and we continue doing it based on what's on the outside. What we're doing is inadvertently, innocently reinforcing those demographic stereotypes. Boomers are terrible with technology and Gen Z are shiftless and don't know what they want out of life and women all like pink and gay people all really enjoy going to pride and throwing glitter around. And like we have all of these different stereotypes and they're inaccurate, they're harmful, they are oftentimes hurtful.

Sam Sivarajan: 51:50

Mm-hmm.

David Allison: 51:54

But more importantly, those stereotypes that we're perpetuating by continuing to rely on demographics, they fuel ageism, sexism, racism, homophobia, ableism, classism. Those are problems we're grappling with around the world right now because we insist on thinking about people based on demographic stereotypes. So we've got to stop. It's better for us. It's more accurate to use values. It's going to make us more money, make us more successful, and we can make the world a little bit of a better place while we're doing it. So you don't get a twofer like that in business very often. And this is one of those cases.

Sam Sivarajan: 52:35

David, that's deep, powerful, and probably the subject for a whole new other episode. So we might have to explore that next, but this has been a really, really fascinating discussion. If listeners want to learn more about you or find your work, where do they go?

David Allison: 52:52

A couple places, find me on LinkedIn. I'm pretty active there. We're always sharing new insights and data and stuff that we find. And then there's two websites. There's a value graphics.com value graphics is all one word like demographics value graphics.com. That's the research company. And then I've mentioned that I also do a lot of work as a keynote speaker, getting out there and being an evangelist for this stuff. And that's David Allison, Inc. So either one of those or LinkedIn is a good, is a good option.

Sam Sivarajan: 53:22

Awesome. David, thank you so much for joining us today on the Future Ready Advisor.

David Allison: 53:27

Thanks for having me over, I really enjoyed the chat.