What is Psychographic Segmentation?
Psychographic segmentation is a way of segmenting the market based on the psychological characteristics of customers linked to personality, social status, interests, activities, and lifestyles that influence their consumption habits.
Besides demographic, behavioral, and geographic segmentation, psychological market segmentation is one of the most effective segmentation approaches that focus on "how" customers think and "what" they aim to achieve. Psychographic segmentation helps to:
- Enhance your brand value
- Improve the customer experience
- Improve your return on investment
Your products are designed to be consumed by your customers, so you must always keep them in mind.
Customer demands and expectations are critical when designing and developing your services, and big data influences most of the decisions made regarding psychographic segmentation.
Big data help you track users activities like:
- Users' activity on social media, mobile applications, online purchases.
- Online behavioral patterns of users.
- Time spent on each website.
- Reviews of restaurants, hotels, etc.
- Locations visited
- Online payments
Psychographic Segmentation Variables
In Psychographic segmentation, you can detect high-quality leads that are categorized by variables like personality, lifestyle, social status, attitude, activities, interests, and opinions.
By analyzing these variables, you can gain a deeper understanding of your customers' needs and tailor your services and marketing campaigns accordingly.
Let's take a closer look at each of these psychographic segmentation examples:
Personality
Market analysts can conduct a personality segmentation based on people's similar behavioral, emotional, and cognitive traits to form groups of customers with matching personalities.
By analyzing personality segmentation, you will be able to identify your main customers' personality groups, adapt your services or products accordingly and introduce new features to attract them effectively. Here are a few popular personalities psychographic segmentation examples:
- Introvert
- Extrovert
- Friendly
- Emotional
- Funny
- Opinionated
Lifestyle
Another way you can divide customers is based on their lifestyle. A person's lifestyle can tell you a lot about how, when, and where they like to spend their money, time, and energy.
Are they athletes? Do they eat healthily? How much sleep do they get? You can segment your audience based on their sleeping pattern, eating tendencies, level of physical activity, etc., figure out their needs, and develop your product and services accordingly.
Social Status
In most cases, customers' social status dictates their preferences and the products they use. Each social class has its own choice of clothes, food, cars, etc. Each person's social status indicates how much money they can afford to spend on particular products.
A good example would be high-end products such as those that are made by brands like Prada, Cartier, or Dolce & Gabbana. These products are targeted at what is called the upper-class consumer. On the other hand, brands like Zara, H&M, or Mark and Spencer target the majority by creating affordable products for the middle class.
Attitudes
Each individual has a set of values and a point of view that is influenced by the culture in which they were raised. You can tell a lot about someone based on how they think and behave. The person who rides a Ferrari is more likely to spend money on luxury products or dining at a famous restaurant, while those with less income would rather spend money on more necessary items.
Activities, Interests, and Opinions (AIO)
This type of psychographic market segmentation focuses on customers' activities, their passions, and their opinions on different issues. Religion, gender, politics, the environment, and cultural topics often lead to strong opinions which can impact people's interests and activities.
In general, these three characteristics are strongly correlated and can influence the products or services your customers use or even how they respond to your marketing campaigns.
5 Psychographic Segmentation Examples
We will provide examples of psychographic segmentation based on each characteristic mentioned above to help you understand them better.
The Personality Example
For example, suppose you sell software to developers or have a food delivery application. In that case, you might notice that your average customers score low in extroversion or, in other words, are introverts. Once you notice your major group characteristics, you can more match your services to their personalities and run campaigns to attract the same traits.
The LifeStyle Example
Lifestyle segmentation is a type of psychographic segmentation that includes collecting insights about potential customers' habits and preferences.
Lifestyle is what people value and how they choose to spend their money. Consequently, if you want to promote your new health product, you might target athletes or people who care enough about their health to exercise on a daily basis.
The Social status Example
Each person's social status shows how much money they can afford on certain kinds of products. Brands like Rolex or Burberry have a clear idea of their target audience. They cater mostly to upper-class consumers with their high quality and high price, which a middle-class customer can't usually afford.
The Attitudes Example
Attitude is an important measurement that can give a lot of information about your customers' basic nature. For example, a person in a high-income group, upper class, could easily afford dining in a super luxury restaurant or buy certain cars and jewelry brands.
The AIO Example
Activities, Interests, and Opinions are three highly correlated concepts and can have a significant impact on customer choices and purchases.
Your market segments' opinions and behaviors influence the products and services they buy and even how they respond to your messaging.
A famous example of AIO segmentation is Cambridge Analytica's use of big data and AI to analyze voter profiles. They used the people's political opinions, religious beliefs, interests, and activities to target them with messages that affected their voting behavior.
Why is Psychographic Segmentation Important in Marketing?
Psychographic segmentation can bring a much deeper and more comprehensive understanding of your customers and their needs.
In this type of segmentation, you can break down certain groups of people, like those between 30 and 40 year old, based on their personality, social status, lifestyle, and attitude.
This will help you narrow your target audience and specify it more effectively than ever before. Here are some advantages of psychographic segmentation in marketing:
- Learn more about your customer behavior by analyzing its different variables
- Customize your products and services for your targeted audience
- It is more effective and detailed than any other marketing segmentation methods
How to Collect Psychographic Data?
Psychographic data can be collected and analyzed in several ways. Some methods involve using analytical tools such as:
- Popup survey
- Quizlet
- Questionnaire
- Google Analytics
- Social Media
- Big Data and AI
- Focus Groups And Interviews
Tips on Using Psychographic Segmentation
Psychographic segmentation can provide you with a lot of customer data, but it is important to use these data effectively within your limited time, budget, and goals.
Here are some tips on how to use the data effectively:
- Optimize your customers' experience
- Optimize your website
- Develop your product that addresses the needs of your customers
- Use the data to improve your marketing campaigns
Frequently Asked Questions
What is the Difference Between Psychographic Segmentation and Demographic Segmentation?
Demographic segmentation divides people based on their age, gender, occupation, location, and marital status, while psychographic segmentation is concerned about their personality, lifestyle, Interests, Attitude, and opinion.
What are Psychographic Factors?
Here are five factors of psychographic segmentation:
- Attitudes
- Lifestyle
- Social Status
- Personality
- Activities, Interests, and Opinions (AIO)
How Can I Use Psychographic Segmentation?
You can use psychographic segmentation in your market research for your business and gain valuable insights into your consumer base. Using psychographic segmentation, you divide your customers into groups based on factors influencing their purchasing behaviors: beliefs, values, lifestyle, social status, opinions, and activities.
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