In this article, we will discuss the importance and benefits of psychographic data and why they must be used in marketing campaigns.
Marketing via demographic data creates a broad and generic overview of your target customers. The demographic segmentation of your customer base typically includes their average age(s), approximate location(s), ethnicity, marital status, gender, etc. However, marketing by psychographic data segments your customer base by behaviors, beliefs, values, lifestyles, and attitudes.
Demographic data is the dry data, the hard facts like age and gender; while psychographic data forms the personality of the consumer, their likes, interests, and habits.
Psychographics is the study of personality, values, opinions, attitudes, interests, and lifestyles, and can be valuable in the field of marketing. When a relatively complete profile of a person or group’s psychographic make-up is constructed, this is called a “psychographic profile”. Psychographic profiles are used in market segmentation as well as in advertising. Some categories of psychographic factors used in market segmentation include:
- activity, interest, opinion (AIOs)
The Practicality of Psychographic Data
Psychographic data provides a much more holistic perspective into your industry and the vertical market in which you operate; if you know what motivates your customers, and what they do and don’t like, you have a huge step ahead of your competitors.
Knowing your customers’ motivations and behaviors can also improve your marketing strategies:
- Form more accurate and robust description profiles of your target customer.
- Educated decision-making and direction for creation of advertising content.
- Valuable feedback for product enhancement, differentiation, and spin-offs.
Psychographic data can also answer compelling questions. Questions such as: Will our customers try something new? What spending patterns and habits drive sales? What subcategories exist within our user base?
How Can Psychographic Data be used?
Group your data. Organize the data reflecting the real world, create backstories and context. Be empathetic to that one group (or multiple groups) and write in a voice and style that speaks to them directly, be relevant.
Using one of our clients as an example, Lindt Chocolate tied for the largest Facebook coupon campaign ever using our CoupSmart promotions platform. They collected psychographic data from over five hundred thousand of their fans/customers.
Key Psychographic Discovery: Many of their fans liked, or were interested in baking.
Business Use-Case: Lindt Chocolate employed a new re-marketing strategy by sending emails with recipes to over 600,000 unique customers gained from their recent CoupSmart coupon campaign. Their e-mail content included baking recipes to educate their customers how they could bake using Lindt chocolate.
The results for the remarketing campaign were impressive: Over 600,000 unique customers were remarketed to, 30% opened the email and 26% clicked-thru. Most importantly, it drove Lindt’s bottom line by experiencing its largest holiday sales increase in 5 years, with a sustained sales increase throughout the following fiscal year. Here is Lindt’s webpage with chocolate recipes. A screen shot is below:
Organizing Psychographic Data into Groups
What kind of offers and content do you send? How do those align with the lifestyles, behaviors, attitudes, and values from your customers’ lists? Before executing, organizing is paramount. How will you begin to do that?
Here is an example:
Strategic Business Insights uses their US VALS Framework, which breaks U.S. consumers into 8 groups, innovators, thinkers, believers, achievers, strivers, experiencers, makers, and survivors. This is their graph: VALS stands for The Value and Lifestyles System.
What Kind of “Effectiveness” Are We Talking?
Collecting and implementing psychographic data is a challenging task. It requires intelligent marketers and strategic thinkers with a strong background in human psychology and consumer analytics. Using psychographic data to drive the bottom line of your business requires significant collection efforts on the front-end as well as strong coordination and communication throughout the implementation process. However, the hard work does pay off and your company profits will soar!
Building psychographic profiles of your target customers allows for more effective and focused marketing communications, content deliverables, and other promotions. Gaining a holistic perspective that includes demographics and psychographics of your target customer will increase sales and loyalty. Your marketing content and offers will be more relevant to your customers and more relevant than your competitors’ content offers.
Many of our Clients are using psychographic information acquired in their CoupSmart campaigns to help them determine, or better understand, their prototypical customer base. In many cases, they are discovering that their assumptions of who is their primary customer base are not completely accurate.
How can you find psychographic information to learn more about your customer base? We can help. We collect valuable psychographic data along with demographic data for companies with our smart coupons; simply contact us to learn more.