Marketers traditionally rely on geographic and demographic breakdown to define their target audiences. However, relying solely on these methods can leave you with over-broad, and thus less effective, targeting.
Another dimension, known as psychographics, helps to target audiences with additional precision by incorporating individual preferences and habits into the customer profile. Psychographics look at what influences buying behaviors, such as beliefs, values, lifestyle, social status, opinions and activities.
Trying to reach large, diverse markets often fails to connect and convert customers because the data is superficial. Marketers can now understand their customers on a deeper level and use that knowledge to identify segments they can serve effectively.
Leveraging psychographic segmentation
Using personality traits can help narrow the focus and increase return on ad spend (ROAS) by identifying the best channels to deliver ads, position a product effectively, and craft messages that stick. Research shows that psychographic, combined with demographic segmentation, yields strong results.
Why it works
We're inundated with marketing messages all day long. Thousands of stimuli demand our attention. To cope, the human brain attempts to organize and interpret information through selective perception, in which an individual selects, organizes, and interprets information to create a meaningful picture of the world. Nuanced targeting that customizes messages and delivery modes according to unique personalities is the way of the future.
Selective perception’s four stages
1. Selective exposure.
We are not exposed to information on channels we do not access. For example, a person may only watch CNN, but not FOX, or may read The New York Times, but not The Washington Post.
2. Selective attention.
We look for and pay attention to messages consistent with our beliefs and attitudes. For example, you probably instantly discard solicitations from organizations whose values differ from yours.
3. Selective comprehension.
We interpret information so it is consistent with our attitudes and beliefs. For example, we may see a pink lawn mower and assume it will not work as well as a black lawn mower because of our associations with the color pink.
4. Selective retention.
We are more likely to recall messages consistent with our beliefs and ignore or forget things what do not align with our view of the world. For example, you may easily forget statistics that don't support your decisions.
Selective perception helps our brains manage and interpret information and helps explain how two people may witness the same event but have different recollections and interpretations of what happened, how important it was and if it was “good” or “bad.”
Psychographics leverage these "mental shortcuts" to shape marketing programs and improve performance.
How do I use psychographic segmentation?
1. Observe your customers.
Watch how they navigate your physical shop or website. For example, you might dig into your web analytics to see what pages are visited most and how long customers spend there. A significant amount of traffic to your Diversity and Inclusion page, Sustainability Report, or community giving pages may indicate that current visitors value buying from a responsible company.
This seems obvious but now there are tools to do the obvious more effectively. You can review the demographics and interest reports within Google Analytics which will segment your website's visitors based on pre-defined characteristics.
You can go further by interviewing customers to learn what motivates them to purchase your product.
You can use psychographic segmentation to understand current customers or identify ways to break through to new segments and expand your market share.
2. Build customer profiles.
As you build your customer profiles, consider using tried and true tools like Strategic Business Insight's VALS framework. VALS is one of the most popular commercially available classification systems based on psychographics. It classifies U.S. adults into eight primary groups based on responses to a questionnaire featuring four demographic and 35 attitudinal questions.
Psychographic segmentation can seem overwhelming because it requires you to navigate ambiguity, so lean on existing frameworks to take some guesswork out of building your segments.
3. Position your product, service, or brand.
Use psychographics to develop a brand and messages that resonate with your target audience. For example, when communicating with "thinkers" who are motivated by ideals, you might focus more on your organization's vision, values and community impact as opposed to other brand traits.
4. Pick your channels.
Psychographics can help optimize channels (e.g., social media versus TV). For example, if you're trying to reach "trendsetters," you may select Spotify in lieu of traditional radio.
Leveraging psychographics, marketers bring a laser focus to their targeting efforts, and may have a better chance of staying competitive in a crowded market.