Who are you selling to? Chances are, if you look at your customers, they have some commonalities. They share characteristics. For example, you might look at your customers and notice that they generally have the same income or annual profits, depending on your market. The majority of your audience might come from a specific region of the country or have a similar ethic background.
If you drew a diagram, you’d start to see that your audience has many overlaps. You’d start to get a picture of your average customer. However, this diagram would be a bit limiting. You might see that the average customer is 30-40, lives in the southwest, and makes $30,000 to $40,000 annually.
But, what do you know about how this customer buys from you? Do you have information on why they buy from you, or someone else? The old way of collecting information about a prospect just doesn’t tell the whole story. How you market to one 35 year old in the southwest may be completely different than how you’d market to another 35 year old.
Why is this?
It’s because the commonalities that you’re looking at are purely quantitative. They’re demographics and they don’t tell the whole story.
The Difference Between Demographics and Psychographics
Demographics are defined as,
“Studies of a population based on factors such as age, race, sex, and economic status, level of education, income level, and employment, among others. Demographics are used by governments, corporations, and non-government organizations to learn more about a population’s characteristics for many purposes, including policy development and economic market research.” (Source: Investopedia.com)
In short, much of your market research is likely based on demographics. The information is relatively easy to obtain and it can give you a general idea of your audience.
Psychographics, on the other hand, are a bit more complicated. Psychographics is the study of personality, values, opinions, attitudes, interests, and lifestyles of your audience. For example, the age of your audience is a demographic, what they like to do on Saturday nights is a psychographic.
Psychographics give you a much stronger understanding of your prospect. For example, you might learn that half of your audience goes to concerts on a Saturday night and the other half stays home with their family. You could create separate marketing pieces for each group and appeal to their lifestyle.
This is an oversimplification of how you might use psychographics, however it clearly demonstrates that just because your audience shares some characteristics doesn’t mean that they share the same values and interests. Because purchases are based on emotions, it’s helpful to understand the emotions of your audience and psychographic information can help.
Customer Personas and Market Segmentation
If demographic information explain who buys from you, psychographic information explains why they buy from you. Together they can create a strong customer profile or persona. The customer persona provides a complete description of a specific type of customer. For example, a few years ago Best Buy’s customer personas were leaked to the public.
- Buzz (the young tech enthusiast)
- Barry (the wealthy professional man)
- Ray (the family man)
- Jill (a soccer-mom type who is the main shopper for the family but usually avoids electronics stores)
Each of the personas included in-depth descriptions about likes, dislikes, and store navigation details. For example, Jill rarely shops at the store but spends a lot when she does. To help market to Jill, Best Buy improved the signage in their store, created escorted assistance to make checkout faster and easier, and created places for Jill to hang out with her kids as they played with the gaming systems and gadgets in the store.
By creating a shopping experience designed specifically to improve Jill’s preferences and habits, Best Buy was able to increase sales.
The first step to creating a customer persona is to gather demographic and psychographic information about your audience and your current customers. Explore which customers are the ones that you want to attract more of as well.
The next step is to start finding common characteristics and creating personas for those groups.
Once you’ve described your customers in written profiles and created a specific persona for each identifiable client group, go ahead, and give them a name, one that suits their description. You’ll now have a clearer picture of the various customers that buy from you and who you should be marketing to and targeting. You’ll be able to maximize your time by segmenting your marketing efforts into specific tactics designed for each persona.
Instead of creating a marketing campaign and hoping speaks to your audience, you can now create a comprehensive experience for each persona. This attracts them to your business at the right time, provides the solution they’re looking for, and delivers it in a manner that they respond to. You’ll attract more prospects and convert them as you leverage psychographics and your customer persona to retain customers.
Using psychographics in your marketing will help you connect to your prospects and ultimately those prospects will turn into loyal customers.
Your success is my business!