How Psychographic Segmentation Can Improve your Marketing Strategy

Every company wants to make sure their customers feel like they matter, right? And for this to be possible, customers must be treated as individuals, with unique wants and needs.

So when it comes to keeping people genuinely happy, how can marketers actually achieve this? One way is through personalisation. Personalising consumer experiences has been proven to strengthen brand affinity, improve customer loyalty and increase ROI, along with many other benefits. What more could we want! But how does the journey to personalised experiences begin? Simple, through meticulous market segmentation.

You might be thinking - I know what you mean, demographic segmentation. Like targeting consumers based on things like their age, income, gender, etc. Well, yes and no. Whilst demographic segmentation is important to any brand, and should never be overlooked, I’m actually talking about something a little deeper - segmentation through Psychographics.

Psychographics, what is it?

Put simply, psychographics is the study of psychological attributes like personality, values, attitudes, opinions, interests, and lifestyles.

Where does it fit into segmentation?

Much like demographic segmentation, psychographic segmentation is carried out by gathering user data on the attributes listed above, and targeting them based on these psychographic similarities. The data can be collected through focus groups, interviews, surveys, analytics data (Google and social media, etc.) and more. Psychographic data is easily collected on social media, as users often freely divulge personal information… like what kind of book they’re reading at the moment, what they think of the new Netflix updates, or how much sourdough toast they had for breakfast.

When did it come about, and why?

The concept of psychographics has been around since the 1920s, where it was used to describe classifying individuals based on particular attitudes. However, classifying is not the same as segmenting. And psychographics in the early 1900s was used for totally different reasons.

Whilst the concept was apparent in society, psychographics hadn’t fully entered the business world at this point in time. It wasn’t until the 1960s when Emanuel H. Demby decided that he wanted to change the way that people are grouped. He wanted to focus less on the standard things like age or income and more on psychological attributes and personality traits. This is when Demby coined the term ‘psychographics’ by simply combining the words ‘psychology’ and ‘demographics’. Phew. Glad we covered that.

Psychographics vs. Demographics

So does this mean we should forget demographics all together? Not quite. For some brands and businesses, demographic segmentation fits the bill. Take L’Oreal for example: the cosmetic conglomerate primarily set their sights on females, and then further segment their target market based on age. And whilst there is clearly an array of demographics that L’Oreal considers and works with, basic demographic segmentation works very well for them.

But when it comes to other fields like music or entertainment, for example, brands have to look beyond basic demographics and shower their strategy with psychographic elements.

Psychographic segmentation provides valuable insights into consumer motivations. It gives us a peek at the needs, wants and values of users. With this information, marketers can better communicate with their target audience. Psychographic data lets us create extremely personalised messages and content, as well as facilitating smarter keyword targeting.

Brands focusing on psychographic data do so for a number of reasons: to increase engagement, entice new target markets, improve customer experiences or they could simply be curious about their consumers. For whatever reason, psychographics keeps marketers in the know and can be used to complement what we learn from traditional demographic segmentation.

Let’s have a look at two cases: Facebook and Apple

Facebook is one of the largest social media sites in the world.

Knowing this, it’s not surprising to learn that Facebook is also one of the most significant social sites when it comes to advertising and promotion. But how do they make their ads so relevant? Facebook’s unlimited library of data has allowed them to become masters of psychographic segmentation, and it’s reflected in the content they promote. Think about it like this - the typical Facebook user will gladly share interests, opinions, values, hobbies and lifestyle choices, etc. in the blink of an eye. And all of that lovely personal data is saved by Facebook and used to tailor the content that you see.

After years and years of data collection, Facebook’s advertising tool now enables marketers to focus content and messages based on a massive accumulation of consumers’ personal information. Facebook is the perfect example of how social media can be utilised to facilitate psychographic segmentation for the good and, well… less good.

It’s a known fact that most companies store and use consumer data. But for some, hearing the words ‘Facebook’ and ‘data’ in the same sentence doesn’t exactly draw positive thoughts. Instead, it makes them think of only one thing - The Cambridge Analytica data scandal. The scandal was huge. Essentially, Facebook allowed Cambridge Analytica to access millions of users’ personal data which was then used to try and influence public opinion on political matters. Ouch.

Because of this, consumers started to re-think what they shared online and realised that their personal data could be used without consent. This is a great example of why it’s important for people to think about the data they share, and how psychographic segmentation has been used against people in the past.  

Apple is one of the world’s largest leading tech companies.

So it comes as no surprise that Apple fully embrace psychographics. Apple’s brand personality is, well, just as huge and dynamic as its global presence.

The brand focuses its own identity on innovation and creativity. These attributes that the brand labels itself with are reflected in Apple’s desired target market; a focus on consumers with specific lifestyles and personalities. For example, as Apple products offer great user experiences, continuous product updates, and the ease of listening to music on the go, it would be fair to assume that their target audience may also be passionate about music, technology or new trends.

Apple’s use of consumer data is what makes it so successful when it comes to market segmentation. But how does it receive this precious data? Well, once an Apple user downloads iTunes or purchases a product, Apple then has access to the data the company leverages. This mountain of data gives Apple a huge insight into the personality, behaviours and lifestyles of their users.

And they don’t hesitate to utilise this data to target content and products, which helps them cement their brand personality as vibrant, innovative and on-trend.

Essentially, Apple evaluates and effectively utilises the psychographic consumer data it receives and designs its marketing strategies and tactics around the appropriate psychographic segments. It’s this volume of information, ingenious promotion and a strong commitment to personalisation that makes Apple an industry leader.

Conclusion

For brands and marketers psychographic segmentation is a great tool. There are so many benefits but, in the same sense, there are also difficulties or drawbacks. For one, psychographic data is more difficult to obtain than, say, demographic data. Also, when putting psychographic segmentation into play, guidelines should be set to ensure that the data is not misinterpreted, and is used accurately, securely and for the right purpose (and always in a way that's GDPR-compliant).

Whilst most marketers are keen to go down the psychographic segmentation route, it’s important to remember that demographic, geographic and behavioural segmentation are also super important to your strategy and campaigns.

While the internet has made psychographics more important than ever, today’s research, analytics, and ad targeting make it newly possible to turn those psychographics into the foundation of a robust market research and marketing strategy.

By accurately utilising the data available to you, understanding your consumers’ preferences, interests, values and so on, you will be able to view your customers as unique, individual people and provide the best user experiences (UX) possible. But UX isn’t the limit - incorporating psychographic segmentation into your marketing strategy can also help you create more compelling content.

With psychographic segmentation, brands can expect to see a boost in ROI, an increase in brand affinity and strengthened customer loyalty. Which, I know, all sounds amazing. Just make sure your data is being used in the right way, for the right reasons, and is shared in the right places!

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