A “one-size-fits-all” strategy rarely works beyond socks and gloves—it’s certainly not a technique successful companies use to target or understand customers, or both! In this day and age audiences are receiving messages from all directions. So how do businesses ensure that their message isn’t lost in all the noise?
Market (or audience) segmentation is defined by a business dictionary as “subdividing a large homogenous market into clearly identifiable segments having similar needs, wants, or demand characteristics.” This strategy allows businesses to accurately target new customers and understand the needs of existing customers.
There are four basic types of market segmentation strategies: psychographic, geographic, behavioral, and demographic. Geographic is perhaps the most commonly used; and demographic, wherein an audience is targeted by variables such as gender, age, income, housing type, and education level, is arguably the most familiar (what new parent hasn’t received a diaper ad soon after their abundant newborn-related Google searches)?
Today, however, we want to discuss psychographic segmentation. This type of market analysis collects and examines the more elusive characteristics of your audience, such as interests, habits, attitudes, emotions, and communication and other preferences. You may be thinking, “That sounds difficult” or “What’s the use of that?” Isn’t it better to know that the majority of your customers are, for example, unmarried, urban-dwelling twenty-somethings?
Of course that type of demographic information is useful, but people who fall within the same demographic profile can still have fundamental differences in likes, needs, and wants. Remember, one size rarely fits all. For example, perhaps half of that demographic is open to purchasing a certain make of car, and the other half wouldn’t be caught dead in that vehicle. Why? The demographics don’t explain it, but the psychographics will.
It may also seem logical to tailor your marketing based on generational perceptions, which requires certain demographical information about your audience. But this type of stereotyping leads to blanket assumptions that are rarely accurate or useful. Overgeneralizing different generations is something that has been going on for, well, generations! I think we all know that not all baby boomers are workaholics who can’t work an iPhone, and not all millennials immediately leave the office when the clock hits 5:00 and only read e-books! Psychographic segmentation allows companies to view their audience in a “made to order” manner (rather than the “one size” generalization) for more tailored messaging.
These two segmentation methods are not mutually exclusive! In fact, demographic information can be a great starting point that allows you to develop an outline of your customer base. Psychographic information allows you to dig deeper, discovering not only what product or service your customer may be interested in but also why. This insight into the motivations of your target audience offers a better understanding of consumer behavior than demographic information can offer. This understanding empowers you to customize marketing to what will hopefully be a more responsive market.
Market segmentation allows you to understand your audience and tailor your message. Demographics can only get you so far—a psychographic analysis of your market could be the route to a better understanding of your customers’ motivations and values.