Psychographic Segmentation: discovering the “Why” behind purchase decisions

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Wouldn’t it be great to be able to read minds? To know exactly why and what your customers are thinking at any given moment.

Well, by using psychographic segmentation, mind reading is almost a reality. Sadly, it is not quite in a Professor X kind of way just yet, but psychographic segmentation can help you figure out what makes your customers tick. It deals with the “why” behind the decisions your customers make.

Sounds magical, but it is actually all analytical reasoning. We’ll guide you through it all.

What Is Psychographic Segmentation?

Just like behavioural segmentation, psychographic segmentation is a type of market segmentation. Except where behavioural segmentation deals with actions, psychographic segmentation deals with reasons.

To put this in Layman’s terms, psychographic segmentation is separating your audience into distinct groups. These groups are based on their consumer purchase behaviour. Examples of these groups include lifestyle, social status, and attitudes.

It can sound odd that these things can influence customers’ buying decisions, but they do. Let us take social standing as an example.

Some customers will only shop from certain brands that they feel are reflective of their social status. It does not matter to these customers that other, less expensive brands may offer better quality clothes. These customers will only purchase from brands that they feel are of their social status.

This information enables you to better understand how customers view your brand and products. You can also identify pain points and address them. As well as reveal what customers want to achieve through purchasing your products.

You can then use all this information to market the same product differently for different segments of your customers. This means you can hopefully sell more of a product to a more diverse group of people, without making material changes to the product.

We will go more in-depth into different examples of segments you can use to break up your customer base.

psychographic segmentation

Psychographic Customer Segmentation

As we mentioned above, there are many psychographic profile segments you can use. They come under many names, but they are all based around the same core ideas.

We are going to look at five variables — lifestyle, activities – interests – opinions (AIO), social status, personality, and attitudes.

Though there are lots of profiles available, you do not need to use all of them. Many of them overlap and intertwine. But if they do not apply to your customers or help you understand them better, do not attempt to force them into a psychographic profile.

Lifestyle Segmentation

Our lifestyles are a huge defining part of who we are and therefore the products we consume. Our clothes are generally determined by our lifestyle choices, which is why our styles and tastes change throughout our lives.

But what do we mean by lifestyle? It is kind of a vague, all-encompassing term that could refer to many things. To make this easier, you can analyse the most important dimensions of their lifestyles.

These are what is known as AIO variables which stand for activities, interests, and opinions.

AIO Segmentation

Activities are pretty straightforward to build a psychographic profile out of. Do you want to find out what activities your customers enjoy and how often? How much of a financial commitment have they made to said activities?

Activities should cover work, hobbies, holidays, club memberships, social events, community, and entertainment.

Knowing what activities your customer enjoys will reveal a wealth of insights about products they are likely to purchase due to this. For example, active people are more likely to buy sports gear, while sedentary people may spend more on high-tech home gadgets.

Interests refer to the degree of engagement customers have with a particular thing. This could be activities or a broader interest like family, food, home, work, community, fashion, or recreation. You can use this to narrow down more specific products your audience may be interested in.

Finally, opinions. We all have them. About ourselves, others, social issues, political issues, economic issues, businesses, services and products.

We also hold some opinions more strongly than others, depending on our beliefs and values, and generally by how much it affects us. In business terms, if someone has a poor opinion of a brand, it is almost impossible to change their minds and selling to them is futile.

Social Status

We touched on this earlier but social status determines so much about our preferences around the products we use. Each class has predetermined preferences that they may not have even consciously considering.

For businesses, this can be a vital tool in knowing who to target and who would never be interested. Or if you have a product that is helpful to all social classes, it can help you target your messaging to each different social class.

Personality

Another vague term that can be difficult to define into clear groups, but not impossible. You can form personalities from groups of customers with similar personality traits. Examples of defined personality traits could be creative, analytical, extroverted and so on.

You can then segment your audience by personality to target potential customers systematically.

Attitudes

Attitudes are intricately linked to our opinions and beliefs. They are usually moulded by our cultural background and the way we were raised. Your audience will be made up of a wide variety of attitudes.

Knowing your audience’s attitudes can bring valuable insights. Use these to target the right customers with the right messaging.

psychographic segmentation

Benefits of Psychographic Segmentation

Psychographic segmentation has plenty of benefits besides the obvious benefit of better understanding your audience. It is what you do with those insights that brings the biggest benefits.

Measure and Track Consumer Buying Behaviour

Psychographic segmentation delivers insights about why customers behave the way they do, enabling the discovery of customer motivations. You can use this to effectively measure how well your marketing strategies are resonating with your audience.

Consumer-Centric Strategies

You can then use this information to shape your marketing strategy more effectively. By this we mean, you can launch marketing campaigns that resonate with customers’ subconscious needs.

Higher ROI

Because you can target your marketing campaigns more effectively, you should in theory see a better return on investment (ROI). This is particularly true if you can reduce paid channel costs, or more efficiently target them to your audience.

More Predictable

Other types of marketing segmentation changes over time. It can be random and unpredictable and therefore difficult for businesses to strategise for. Because much of it is based on our personality, attitudes and social status, these things rarely change and are more constant.

This allows businesses to segment their customers and build a detailed long-term strategy more accurately.

It Doesn't Have to Be Time Consuming

You can build the psychographic profile of your customers in a variety of ways.

  • There is the old-fashioned way of conducting traditional market research: you can do this through surveys, interviews, focus groups and observations. Though it is time-consuming, this approach can give you valuable information about potential customers.
  • Alternatively, technology allows us to take shortcuts and use insight platforms to gain this information instead. This technology, like our AI Symanto Insights Platform, can collect and analyse any text data far faster than traditional routes and may reveal insights that a traditional market research is unable to.

Nowadays, you can analyse vast amounts of psychographic data in minutes. Because of the huge amounts of data available, you can build segments and target them more accurately. It is technology well worth investing in for your business.

Symanto Insights Can Help

When done correctly, psychographic segmentation is a powerful tool. But what is more important is what you do with the information you obtain.

Insights are pointless without action to follow them. For example, imagine a travel business that targets its audience through personality types and then, uses this information to offer last-minute deals to extrovert or impulsive personality types.

How you use psychographic segmentation insights will be unique to your business. Why don’t you request a free personalised demo and find out for yourself?

Discover how Symanto can help you to grow your business in a very time and cost-efficient way.

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