Demographic vs Psychographic Segmentation: Understanding the Differences
Have you ever wondered how some businesses exponentially increase sales through ads and email marketing?
The answer lies in the art of market segmentation. Demographic vs psychographic segmentation are two powerful strategies to target people with the right products.
Demographics help you understand who is buying, while psychographics focuses on the ‘why’ factor behind those purchases.
Let’s delve into the undertones of these approaches.
Understanding Demographic Segmentation
Demographic segmentation is a marketing strategy that divides the audience into smaller groups based on age, gender, income, occupation, etc.
Why Use Demographic Segmentation?
Demographic segmentation provides insights into consumer profiles, purchase habits, and buying intent. This allows you to make informed decisions on how and who to target.
Demographically dividing the audience improves:
- Relevance: By understanding consumer purchase trends and motivations, you can personalize email marketing campaigns to maximize spend.
- Efficiency: Allocating email marketing costs according to the buyer’s requirements can reduce wastage of resources.
- Insights: Demographic segmentation offers data on customers’ purchase patterns, behavior, and preferences. This can help you target people with different types of emails.
- Measurability: Demographically dividing subscribers makes collecting data and tracking email performance easier.
Common Demographic Factors
The table outlines standard demographic variables.
| Demographic Variable | What it showcases |
|---|---|
| Age | It’s used to group people into categories such as toddlers, teenagers, adults, and senior citizens |
| Gender | It’s often categorized as male, female, and non-binary |
| Income | This shows the financial independence of people categorized into low, middle, and high-income groups |
| Ethnicity | It refers to a person’s cultural identity based on shared language, religion, or ancestry |
| Occupation | This shows the profession or employment status of an individual, such as students, professionals, or retirees |
| Marital status | It shows whether someone is married, single, or widowed |
| Ethnicity | This demonstrates the cultural and racial background that influences user behavior |
| Religion | It refers to the beliefs of people |
| Nationality | It shows the country or place a person belongs to |
These demographic variables give email marketers a broader view of a particular consumer action. For example, if working men aged 25-35 years preferred stylish work bags, it could be that they prefer functionality and style. You can then use psychographic segmentation to know their inner world.
Pros and Cons of Using Demographic Segmentation
Demographical data is easily measurable, but can come with limitations.
| Pros | Cons |
|---|---|
| It’s available in: ‣ Government census bureaus ‣ Market research firms ‣ Other sources | ‣ It can be too broad, leading to lesser targeting options |
| ‣ It changes slowly, so tracking behavior and market trends becomes easy | ‣ It makes it challenging to capture nuances in a specific audience group |
| ‣ It can be used across industries from consumer goods to financial services | ‣ It can lead to stereotypes and assumptions about a particular group |
| It can be combined with other segmentation methods such as: ‣ Psychographic, ‣ Behavioral, ‣ And Geographic | ‣ It cannot be implemented for all product and service types |
Just like the quantitative variables, you can gather qualitative data about consumers. This refers to comprehending consumer lifestyles, attitudes, and beliefs.
We’ll review everything about psychographic segmentation below.
Psychographic Segmentation in Detail
Psychographic segmentation is a marketing method that divides the audience based on lifestyle, values, attitudes, activities, interests, and opinions. It typically reads into the inner attributes of customers.
This method allows you to use email psychological principles to present personalized recommendations and offers.
Benefits of Psychographic Segmentation
Psychographic data can delve in-depth like knowing someone’s view on political issues to their favorite ice cream flavor. Knowing this level of intricate details helps you send hyper-focused promotional messages to amplify your reach.
The advantages of psychographic segmentation are:
- It helps with targeted marketing: Tailoring messages and products to specific consumer segments can retain buyers and turn marketing leads into valuable consumers.
- It develops better products: Psychographic segmentation provides opportunities to develop products customized to certain audience groups.
- It builds a strong brand identity: Sending relevant emails strengthens brand positioning and values.
- It establishes customer loyalty: Psychologically oriented emails empower deeper customer connections.
Key Psychographic Factors
We’ll review the most used psychographic variables in the table.
| Psychographic Variable | What it Demonstrates |
|---|---|
| Personality traits | It shows how open-minded, organized, and helpful a person is |
| Lifestyle | This demonstrates a customer’s habits, hobbies, and opinions |
| Values | It shows what a person deems important in life such as family, health, success, etc |
| Attitudes | It refers to a person’s feeling and beliefs about specific products, brand, or issues |
| Social class | This refers to a person’s standing in society based on their income, education, and occupation |
| Motivations | The underlying reasons why a person makes certain choices such as status, comfort, and convenience |
Pros and Cons of Psychographic Segmentation
The table shows how psychographic division works and does not at certain times.
| Pros | Cons |
|---|---|
| ‣ Psychographics provide a nuanced understanding of consumers. | ‣ Many variables can make the process complex |
| ‣ It helps tailor products to specific customer segments | ‣ Customers’ attitudes and beliefs can change. |
| ‣ It helps send personalized offers and products | ‣ Collecting psychographic data can be more expensive |
Frequently, marketers confuse demographic with psychographic data, leading to irrelevant email content and higher unsubscribe rates.
Both methods can be used in conjunction but they are not the same. We’ll learn the differences between demographic vs. psychographic segmentation next.
Difference Between Demographic and Psychographic Segmentation
The table compares the differences between demographic and psychographic data.
| Aspect | Demographic Segmentation | Psychographic Segmentation |
|---|---|---|
| Definition | It refers to segmenting the market based on shared characteristics such as age, income, occupation, etc | It refers to segmenting the audience based on psychographic traits such as lifestyle, values, opinions, etc |
| Focus | It shows who the customer is | It reads into why customers behave in a certain way |
| Data source | Public records, government statistics, census data, surveys | Focus groups, consumer behavior analysis, interviews |
| Measurement of metrics | It’s easy to measure due to quantifiable factors | It’s more challenging to measure because it’s subjective |
| Use in marketing | It helps define basic customer segments and curate content | It helps send personalized and behavioral marketing campaigns |
| Application | It’s useful in broader marketing | It’s useful for niche marketing and targeting specific lifestyle groups |
We’ll look at an example for both methods to give you a broader understanding.
Example of Psychographic and Demographic Segmentation
- Demographic segmentation: Targeting women aged 35-45 years with a college degree and an yearly income of $75,000 or more.
- Psychographic segmentation: Targeting people who are environmentally conscious, believes in health and wellness products, or enjoy outdoor activities.
Combining demographic and psychographic data can lead to granular-level understanding of the audience as per their place in their customer journey.
In the following section, we’ll learn how to use both methods to maximize sales.
How to Combine Demographic and Psychographic Segmentation
Beyond emails, understanding your customers can help you create targeted websites, ads, and social media content. You can then merge these into a multichannel marketing strategy to elevate exposure.
Here’s how you can combine demographic and psychographic data.
Understand the Differences
Know that demographic segmentation focuses on quantifiable metrics, while psychographics focuses on quality of lifestyle, values, etc.
It’s important to identify these key distinctions to produce a tailored marketing strategy.
Sometimes, your audience can fall into demographic and psychographic segments simultaneously. For example, a customer can live in a regional area and love to participate in sports tournaments in the city.
Be mindful of this overlap and create personalized emails based on a customer’s previous interaction with your brand.
Define Your Target Audience
Outline the demographic data and overlay psychographic qualities. For example, you can target a man aged 25-40 living in a metropolitan city who’s into fitness and nature-friendly products.
Use demographic data to determine the tone and communication style of your email. Similarly, psychographic data can be used to shape the emotional appeal.
For instance, you can aim to create luxury and eco-friendly messaging, emphasizing exclusivity and environmental impact.
Use Tailored Channels
The demographic data will give you insights into the popular marketing channels for your audience. Gen-z and millennials might prefer Instagram, while older generations might want a more straightforward approach.
Likewise, you can use psychographic data to choose the best medium. For example, fitness conscious individuals might be attracted to influencer collaborations.
Test and Refine
Continuously A/B test your email campaigns to gain an in-depth understanding of your audience’s behavior and preferences.
You can test variations of:
If you want further help creating holistic customer profiles, use an email service provider with robust segmentation features like Campaign Refinery.
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