Demographics vs Psychographics

Demographics vs Psychographics

Consumer demographics answer surface-level questions about a company’s customers.  It tells who is buying the product and includes information like age, gender, marital status, income level, etc.  While this kind of information is important, it is not enough to capture the audience’s attention. Psychographics are much deeper and more insightful. They evaluate consumers’ psychology, lifestyles, and behaviours, and are usually not quantifiable. Why are psychographics so important for effective marketing? Let’s look at an example.

Betty and Sue are both middle-aged mothers, married, with an income of $100k.  Both women drink Starbucks ™ coffee every day. You are a local coffee shop wanting to increase traffic. You can determine who to market based on age, gender, marital status, and income of these customers. Without knowing why they buy Starbucks ™ everyday, it may be hard to capture their attention.  This is the question psychographics answers—why customers purchase based on their interests, values, beliefs, and more.

Psychographics Wins with More Effective Marketing

Knowing why these women purchase Starbucks helps define the right marketing tactic.  Perhaps you find out that Betty gets coffee every morning because she has to drive her kids to school at 6 am and needs a wake-me-up.  Sue sits down for coffee with friends before tennis lessons. With this information, you now know why these women value coffee, and more importantly how to capture their attention. To intrigue Betty, you could include images of kids and a tired mother in your advertisement.  Or, you might offer her a two-for-one special on espresso shots because she values coffee for the caffeine. For Sue, you might want to brag about your friendly atmosphere and cozy outdoor seating. Or, you could offer her a free drink if she brings in a friend. This is the power and importance of psychographics.

What if you failed to consider the psychographics of consumers and relied only on demographics for marketing campaigns?  Well, you might reach a similar group of coffee drinkers, but you would probably fail to spark their interests…because you don’t know them!  If you sent both Betty and Sue a two-for-one espresso shot deal, you probably would not attract Sue since she is not seeking the caffeine wake-me-up that Betty is.  If you sent photos of your cozy and decorated dining room, Betty wouldn’t care because she gets her coffee to-go.

The Prize: Traffic and Sales

You can see how imperative it is to understand and acknowledge the psychographics of your customers.  Using this data, you will no longer waste time sending ineffective messages, using the wrong platform, or offering weak incentives.  Instead, you can develop the messages, campaigns, products, and services tailored to specific customers’ wants and needs” (Harvard Business Review 2016). Targeted marketing like this will drive more traffic and more sales.

How You Can Reap the Benefits

This example demonstrates why demographics alone are not enough to develop an effective marketing tactic. Similarities in demographics are not conducive to similarities in lifestyles, values, and beliefs.  This data is trickier to find, but the investment is well worth it. Affinio Inc. says “it is critical to connect with the audience on a cultural and emotional level to ensure that the look, feel, and tone of your content fits.”  Here are a few steps to follow to collect this information and develop your marketing strategy:

  • Research your top segments—Narrow in on your top 3-4 segments and define the motives and drivers behind each segment’s purchasing decision. For example, if your product is a soft drink, what are your consumers’ motives? Is it for a special occasion? To accompany their lunch every day? Or to energize after a tough workout? In addition, you can also research each segment’s main barrier. For example, it may contain too much sugar or artificial additives.
  • Address their motives—Use this information to tailor your content and design to align with the customers’ values. Rather than just aligning your content based on your consumers’ age group, gender, etc., you can now strategically address their motives as well as their barriers.
  • Expand your audience—You can also use these defined drivers to locate additional growth opportunities beyond your existing demographic segments and ultimately expand your target audience. For example, if your product is a fuel additive for which the purchase motivation is road safety, you may experiment with new segments for which these motives are similar. If these new segments have a barrier which prevented them from consuming your product to date, you can address this issue in your campaign.
  • Additional tip: use your website data—You can do some analysis of previous customers and purchases with website analytics. This will tell you what content, promotions, or offers have incentivized customers to purchase. Whether it’s new products, a discount, free shipping, or seasonal specials, it’s helpful to know what motivates people to make the purchase.

Following these steps will allow you to uncover your consumers’ psychographics and individualize your content and design strategy.  You can target not only age groups, gender, income level etc. but also the reasons and the behavioural patterns behind purchasing decisions. Have you already began using psychographic data in your marketing campaigns? Tell us about the results you have seen!

Written by Laura Swedo, Marketing Intern @ Personalics