Market segmentation is the process of dividing your consumers into segments based on specific parameters. The four main parameters are demographic, geographic, behavioral, and psychographic.
Just as access to quantitative big data revolutionized the possibilities of behavioral segmentation, developments in AI are shaping new possibilities around psychographic market segmentation.
Conducting large-scale research for psychographic segmentation was once arduous and inefficient. Thanks to advancements in AI technologies that automate the process, psychographic market segmentation is more practical and accessible than ever.
Given these new capabilities, let’s explore psychographic market segmentation, its benefits, applications, and how AI is changing how it is conducted.
Psychographic Market Segmentation Explained
Every single decision you make is motivated by something.
Example: What are you going to have for dinner tonight?
If you’re spontaneous, you might just pick up something on the way home and not give it much thought. If you’re habitual, it’ll be the same thing you had last [insert day of the week here]. If you’re rationally driven, it might be something to balance what you had for lunch. If you’re emotionally driven, you might pick up some comfort food (it’s been a tough day at work), or something that reminds you of your childhood.
Your consumer base is made up of people who are motivated by a myriad of things. Some of those things are situational, but at the core of their decision-making is their personality type.
Psychographic market segmentation is a type of marketing segmentation that aims to identify what motivates each of your customers and divide them into groups based on personality traits and the reasoning behind their decisions. From there, you can tailor your messaging and your communication style to each segment to maximize the effectiveness of your marketing campaign, product development, and customer service.
Behavioral vs Psychographic Market Segmentation
Behavioral segmentation looks at the consequences of decision-making and attempts to find patterns to make predictions about future behavior. In other words, behavioral segmentation assesses WHAT your consumers are doing.
Example behaviors include time spent on the website, previous purchases, and level of engagement. By analyzing behaviors we can guess what motivated them, but we may not be accurate in our assumptions.
Psychographic market segmentation takes it a step further and focuses on the personality characteristics and motivations behind the behaviors. We look at WHO is doing WHAT and WHY.
Examples of personality characteristics include lifestyle, attitudes, principles and beliefs, and activities and interests.
Benefits of Psychographic Market Segmentation
Target with accuracy
Optimize your marketing messaging by speaking directly to your audience using language that resonates with them. For example, rational thinkers respond to facts and evidence, whereas emotional thinkers respond to feelings and social rewards.
Personalize chatbots and emails so that customers feel they are engaging with a representative. Mass emails are perceived as spammy. The more relevant your messaging is, the greater your customers are likely to engage and come away with a positive perception of your brand.
Targeted messaging maximizes the effect of each and every ad and email you send out. Save time and money by efficiently converting leads into sales.
Build brand loyalty
If you continually and consistently send out relevant messages to your customers, they’re more likely to stay connected and develop loyalty to your brand. Misjudged or unwanted messaging, conversely, can negatively impact brand loyalty.
Connect with a more diverse audience
Segmentation enables you to market to a more diverse group of people without fundamentally changing your product or service. Approach your product from all angles and market to a new set of customers with different needs and motivations from your primary customer base.
Applications of Psychographic Market Segmentation
Create personalized emails that belong in your customer’s inboxes. Increase engagement by aligning your messaging with different personalities. Create a customized experience by directing customers to different landing pages depending on their psychographic profile.
Created targeted ad campaigns on Google and social media sites . Currently, you can’t filter your ads by psychological traits (give it time), but you can make associations between behavior and psychographics, for example, likes and interests and psychological traits to refine your tone, speak directly to different segments and improve the efficiency of your sales funnel.
Direct your content marketing
Discover the different subsets of your audience and direct your content to appeal to them. Use your findings to enhance your product descriptions, blog, and social media content.
Product development and innovation
Gain deeper insight into the motivations and pain points of consumers and use that information to adapt and develop your product range or service.
Emerging Technologies vs Traditional Methods
Up until recently, conducting research for psychographic segmentation has been time-consuming and costly. Surveys, interviews, and focus groups are all great ways of understanding your customers in-depth, but there are several issues with these traditional methods.
1. There’s no guarantee that your sample is representative of your consumer base as a whole. You may be missing key insights.
2. The greater the sample size, the better, but It’s very difficult to manually sift through and process such large quantities of qualitative data.
3. It’s highly impractical to regularly conduct and process this research manually. As a result, it can be difficult to notice patterns and trends.
Advancements in technology and AI are changing all of that. At Symanto, our products automate the process of analyzing existing big data. Vast amounts of qualitative data can be processed within minutes, giving you immediate feedback which you can turn into action for your business.
How To Conduct Psychographic Market Segmentation with Symanto
Our suite of tools enables businesses to discover different subsets within their audience based on personality traits, communication style, their opinions and emotions when interacting with your brand, and more.
Then, we convert our findings into actionable insights for your company so that you know the best direction to take going forward.