The power of psychographic segmentation

In an attempt to better understand the next generation of customers, the company launched a research project to identify commonalities between various demographic groups. Retailers are also exploring psychographics as a means of identifying prospective customers more effectively. The Pinewood Forest in Atlanta, Georgia targets filmmakers and creative talent drawn to Atlanta’s television and film production industry. Already a $52B industry in North America alone, wellness communities are among the hottest trends in luxury residential development.

Psychographics are applied to the study of cognitive attributes such as attitudes, interests, opinions, and belief, as well as the study of overt behavior (e.g., activities). Psychographic segmentation is also applied to other fields and across cultures in order to understand motivations Psychographics and behavior including in healthcare, politics, tourism and lifestyle choices. Psychographics is often used for market segmentation and improved target marketing. For example, VALS is a proprietary framework created by Strategic Business Insights that separates US adults into eight distinct types by evaluating their motivations and resources to understand anticipated consumer behavior.

Travel and adventure apparel company Kathmandu has a unique example of this with the launch of the “world’s first adaptable all-weather wedding dress”. The psychographic data that you’ve gathered is a rough blueprint for the directions your business could undertake. For example, if you are launching a quirky t-shirt company, your core audience may be high-school students who have an interest in TikTok trends. Psychographics may help you to determine which platforms your ideal audience is most active on. One campaign may focus on family values, bright colors, and appear in local newspapers, while the other campaign may focus on the sturdiness of your equipment and different needles sizes. Your company may have two dual campaigns to suit the two knitting markets.

For instance, they may value long-lasting products or look for the lowest prices. Rather than focus your market research exclusively on demographic factors—objective characteristics like age or geography—you can use psychographic profiles to map the more subjective aspects of personality. Psychographics is a field of study that tracks the psychological characteristics that influence people’s behaviors and decisions.

For instance, an auto manufacturer might use psychographic segmentation to learn what its customers care about to create products and marketing campaigns geared toward those individuals. Stepping into your customers’ thoughts can help you learn more about their motivations and how to sell anything to any audience. In addition, psychographic segmentation allows businesses to create products designed for different groups of people and market to those individuals in various ways. Psychographic segmentation in marketing can help you target customers based on their motivations and other key factors that can help you get to know them better. One way to effectively find your target audience to boost engagement and increase conversions is with customer segments. But the days of relying exclusively on surveys and focus groups are gone.

More effective messaging to resonate with real motivations

Psychographics are the psychological and cognitive attributes of a consumer that reveal their beliefs, values, and goals. In this post, we’ll cover everything you need to know about using psychographics in your marketing campaigns and why you can’t rely on demographic data alone. If this sounds like you, it's time to focus on producing relevant marketing content — and to do that, you'll need psychographics. Psychographics is often confused with demographics, in which historical generations may be defined both by demographics, such as the years in which a particular generation is born or even the fertility rates of that generation's parents, but also by psychographic variables like attitudes, personality formation, and cultural touchstones.

Facebook’s efforts to offer greater transparency into its advertising policies was further undermined in December 2019, when an internal memo from company executive Brian “Boz” Bosworth was leaked to The New York Times. Although advocates for greater transparency in online advertising welcomed the move, the View Ads tool had several major drawbacks. Moreover, there is a relatively enormous time lag between ad and “purchase” (voting) in political campaigns. There is also reason to believe that psychographic marketing may be even more effective in non-political than political advertising. As long as it is believed by advertisers that this way of microtargeting customers could be effective, every advertiser will feel the need to achieve a comparative advantage relative to its competitors by acting as if it is.

Ways in which psychographic data improve digital marketing

For example, you might learn that a specific psychographic segment makes monthly purchases for your products. And get valuable insights into their buying mindset (e.g., how likely they are to indulge in spur-of-the-moment purchases). And may align better with companies who advocate for ethical consumption. As a bonus, you’ll have a head start on data collection if you’re continuously collecting customer insights. By developing psychographic segments, you can spot opportunities for new offers that grow your business.

The company claims to have “modeled the entire US population into 200 unique clusters,” using inputs from over 120 million US consumers, including personality traits provided by the aforementioned IBM Watson. The result was a hyper-localized ad strategy that would produce different content depending not only on demographic data, but also the lifestyle data customers were generating while on the premises. As the company grew from 1 to 6 locations, it realized that it needed a specific ad targeting strategy for each store. This allows companies to leverage the tool to create customer profiles, featuring demographic, geographic, and psychographic data.

• Market research is just one way to learn about your customers, but it can be costly and time-consuming.
• By understanding needs, wants, concerns, motivations and aspirations, businesses can tailor what they offer to better align with what their target audience cares about.
• The most telling psychographic factors are often beyond spoken motivations.
• But the days of relying exclusively on surveys and focus groups are gone.

What Are the Key Variables in Psychographic Segmentation?

Short-term outrage in this case will not necessarily lead to long-term backlash against companies that use this technique. Regardless of the recent events that have brought psychographic marketing into focus, the method is likely here to stay. Frankly, we believe the sooner Facebook and other companies are subject to democratically accountable rules on this the better.” — Rob Leathern, Director of Product Management, Facebook

Just think about all the different ways that these companies keep tabs on us. Hmm… if only there were a company whose mission it was to figure out what people liked. Ask them to share the key phrases, FAQs and language that customers use when talking about your product or brand.

Two customers in the same demographic can sit in different profiles, and once you know which, every message, offer, and product recommendation can be tuned to the motivation that actually drives the purchase. Demographics Psychographics Question answeredWho is the customer? Taken together, these dimensions turn a faceless customer record into a person with motivations you can actually market to.

Watch the video below to learn more about using Audience Intelligence to develop your psychographic personas and adapt your marketing strategy accordingly. It’s also more inclined to make spur-of-the-moment buying decisions. Compared to Lululemon’s broader audience, the “Family & Lifestyle” segment is more likely influenced by social media, online ads, friends, and family. Including a breakdown of top keywords found in their bios, a summary of their top influencers and content sources, and a list of the top hashtags they use.