Customer psychographic segmentation is a new approach in marketing. It starts by answering the question, “why each customer group buys the goods and services you offer?”
In the conventional methods, marketing gurus would define customer personas based on demographic data. They do that by determining the most valuable customers’ age, gender, location, marital status, and profession.
Interestingly, in digital marketing, such data are usually available through website visitor tracking or social media platform insights.
Answering these questions helps you better understand the process of a customer’s buying decision. So, it is the prerequisite to increase customer engagement and revenue.
But, to have a better idea of customers, some marketers examine psychographic parameters. These include the personality, activities, values, attitudes, and lifestyle of the target audience.
Generally, demographics are quantitative customer data, while psychographics provides you with qualitative data.
Ideally, the optimum approach is to consider both demographics and psychographics. However, accessing a combination of data based on different methods enables you to have a holistic perspective toward your customer groups.
Note: WatchThemLive is a web analytics tool that helps you gather psychographic data and more. Keep reading to learn how.
Types of Market Segmentation
Customer segmentation data types are split into five main categories:
demographic, behavioral, geographical, psychographic and transactional data.
- Demographic segmentation: Demographic segmentation segments your buyers based on age, income, gender, level of education, etc.
- Behavioral segmentation: Behavioral segmentation divides users based on their interaction with your website. You can understand users’ behavior by using an analytics tool and gather that data to segment your customers effectively. Behavioral data include shopping habits, browsing habits, brand loyalty, etc.
If you want to gather your website visitors’ behavioral data, tools such as WatchThemLive’s session replay can help you see how each visitor behaves on your website. With session replays you can record and play customers’ journeys from the begging to the very end, so you can find what they like, dislike, and come up with strategies according to that. Watch this video to see how they work:
The most useful feature in this case is website analytics which gives you valuable data about your users. Using web analytics, you can segment your customers based on their devices, browsers, languages, etc. It also allows you to track your pageviews and other data such as referees, and users’ countries. This platform provides you with all these services and more. This way, you can make your customers’ persona even better, which will lead to better campaigns and sales in the end.
If you are interested in investing in your customers even more, sign up right now.
- Geographic segmentation: Geographic segmentation divides people into groups based on their physical location. It gives you information about users’ countries, city, regions, and postal codes.
- Transactional segmentation: On the other hand, transactional data reveals what customers buy. At the same time, psychographic data complement these data types for comprehensive customer segmentation.
- Psychographic segmentation: Psychographic segmentation is a way of grouping customers based on their interests and personalities. Psychographic data gives you information about users goals, lifestyles, beliefs, hobbies, etc.
Any company that wants to understand its customers’ cognitive processes can benefit from the psychographic segmentation method. Moreover, it is one of the most successful segmentation approaches when used with other customer segmentation types.
Now, if you are wondering what is psychographic segmentation, then here’s the definition of it:
Psychographic Segmentation Definition
Psychographic segmentation is a methodology used to divide the market. The psychological characteristics of people are the basis of segmentation because people’s lifestyles and preferences influence consumption patterns. It is mainly based on the way people think and see their lives and aspirations.
Customer personality and buying habits are interconnected. Therefore, businesses offering value to clients based on their routine requirements can create a successful product or service.
If companies apply these characteristics to produce goods, they can significantly improve sales. For example, some liquor, laptop, vehicle, and perfume producers use their customers’ personalities as the basis of tailoring their marketing efforts.
Why Is Psychographic Segmentation Important?
Psychographic segmentation is important because it lets businesses understand their users’ lifestyles, behavior, shopping habits, and interests, which are key to understanding the reason behind their actions. By implementing psychographic segmentation, you will know why customers would buy your product or turn to competitors instead. This helps you develop effective marketing campaigns that result in more revenue.
Advantages of Psychographic Segmentation
Psychographic segmentation has so many advantages. Let’s review some of them here.
- Psychographic segmentation is useful for personalization. When you know what your customers are interested in, you can run personalized campaigns and increase your revenue.
- It helps you increase customer loyalty. Customers will stick with you if they feel that you care about and understand them.
- Psychographic segmentation helps you understand your competitors’ audiences better. When you use similar variables to examine competitors’ target markets, you are able to plan more effective marketing strategies.
- It helps understand consumer behavior.
- It allows marketers to segment customers based on their views and opinions and can supplement behavioral segmentation.
- It is more effective than geographic or demographic segmentation since it gives information about buyers’ internal qualities such as hobbies, habits, and opinions.
Psychographic Segmentation Examples In Marketing
Psychographic segmentation examples include:
1. Jewelry Brands
Consider a jewelry company that specializes in personalized accessories. Jewelry is a luxury item that appeals to people of the upper class who have a lot of money; that is, people whose social class and income levels allow them to buy such luxuries.
2. Plant-Based Food Company
Take as an example a company that creates plant-based processed foods. This product targets people who follow a specific diet, such as vegetarians or pescatarians.
3. Baby Products
Baby food and diapers, for example, have a unique target audience: families and new parents. These groups can be further divided based on consumer preferences and the many applications of your product.
Psychographic Segmentation Types
The most important types of psychographics are personality, activities and interests, attitudes and beliefs, values and lifestyle. All of these types are examinable closely for each individual. Interestingly, they tell us what people do, how they think, and what is valuable to them.
Biological and environmental factors form personality, affecting specific behavioral, emotional, and cognitive traits. Therefore, market analysts can perform a personality segmentation to divide customers with similar personality traits.
Different products and services can appeal to different personalities. Also, you can create new functionalities for the examined personalities.
Here are some of the personality types that are useful for customer segmentation:
Each psychological model categorizes personality types differently. For example, two of the most popular models are MBTI with its 16 personality types and the DISC model. You can use any model you prefer that suits your business and customers.
2- Activities and Interests
This psychographic market segmentation focuses on what activities consumers do, what they are passionate about, or their views on particular issues. These are AIO parameters, abbreviated from Activities, Interests, and Opinions.
Market researchers can identify favored goods and services based on behavior analytics. Moreover, they can develop marketing campaigns to appeal to various activities, preferences, and views.
A psychographic segmentation example of this variable is Johnnie Walker’s label using the “Game of Thrones.” It was targeting those interested in this series and drinking whiskey.
3- Attitudes and Beliefs
Childhood and cultural history shape an individual’s attitude. As a result, each prospect has a unique mindset, which is helpful as a predictor in psychographic segmentation.
So, you can divide customers into groups based on their beliefs and perceptions. Beliefs are an intrinsic parameter that gives insights into a customer’s fundamental behavior.
Each user has a unique mindset and attitude. Consider these factors when determining the target market for a new product feature.
Values are referred to the sense of right and wrong among people. They can include family, social, and environmental values, to name a few. Identifying which values and virtues are relevant to your most valuable customers can help you target them.
An example of this psychographic segmentation is IKEA’s sustainability campaign focusing on the brand’s attention to an environmental cause.
As value is a complex psychographic segmentation parameter, you can track online activity to determine your target market values.
Manufacturing a variety of products for various customers needs a huge investment. However, segmenting products based on lifestyle can make product development and marketing efforts more targeted and cost-efficient.
For example, a shoe designer can design shoes for different consumer segments such as office workers, athletes, runners, students, etc. Thus, segmenting categories based on consumers’ lifestyles leads to an improved product and a more effective advertising campaign.
How to Use Psychographic Segmentation
Psychographic segmentation can help you improve your results greatly. Let’s see some examples of how you can do that.
1. Give Your Users What They Actually Need
When you know your customers, you are able to motivate them with what they desire. For example, people need to hear from your other buyers that your skin product can really remove their pimples in one month. So, in this case, offering free shipping or discounts won’t be of any help. You need to use testimonials for your next marketing campaign to get people to buy your products.
2. Use the Social Media Platforms They Use
One of the most useful information psychographic segmentation gives you is your user’s most favorable social media platforms. If they spend most of their free time on Instagram or use this platform for online shopping, you should stop spending your time and money on Facebook and focus on bettering your Instagram business account instead. Observe what kind of content they like and engage with to know them even more and create your content according to that.
3. Emphasis on Their Interests and Hobbies
Let’s imagine you own a book store and through psychographic segmentation, you find out that your customers like it when a loved one reads a book to them. Here, you should use images of couples that comfortably lay beside each other and one of them is reading a book to the other. You can also recommend the best books that couples can enjoy together, or write content about how fun and relaxing it is to read a book with someone you love.
No matter what your business is about, try to somehow relate your buyers’ interests and hobbies to the content you create, be it a blog post, a social media post, an ad, etc.
4. Create Customized Calls to Action
CTAs are very important for a business especially if they run a blog. As you may already know, ordinary CTAs won’t work in this age of competition. Psychographic segmentation allows you to design your CTAs in a way that’s appealing to your customers.
For example, if you sell decoratives, you should use a CTA copy like this “Start your path to create the dream house you always wanted”. You can also use an image of a very beautiful house decorated with your goods. Or an image of a happy family living in that house.
Now that you know what psychographic segmentation is, its types, and saw some examples, we should add that psychographic data can complement demographic, behavioral, geographical and transactional data for complete market segmentation. It’s helpful to use and analyze these data types if companies want to take the customer-oriented marketing path.
For this purpose, you can use behavioral analytics software like WatchThemLive and truly understand your customers. Sign up and seize your FREE plan now!