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What is psychographic segmentation? A beginner’s guide

9 min read
Brand marketers use psychographic segmentation to position their products so that the right customers can discover them. What is it, and how can it help you reach your target market?


What is psychographic segmentation?

Psychographic segmentation breaks down your customer groups into segments that influence buying behaviors, such as: beliefs, values, lifestyle, social status, opinions and activities. It’s different from behavioral segmentation because it draws out the motivations behind behavior, rather than tracking the behavior itself.

And, although different, it often goes hand in hand with demographic segmentation:

  • Demographics tells you who your customer is, while psychographics tell you why they buy
  • Demographic data is quantitative, but psychographic data is qualitative

Understanding your customers’ psychological characteristics is the final piece of the puzzle when building a holistic customer profile.

Customer personas

You’ll need to understand your target audience’s psychographics and demographics to be able to build up a customer persona – a fictional character who is most like your customer base – and reach them effectively.

See how one informs the other to build up this buyer persona of Meredith, a personal trainer:

Demographic profile Psychographic profile
Female  Enjoys healthy living
Age 25-45 Lacks time to herself
Married  Enjoys Netflix box sets
2 Children Buys quality rather than economy
Household income $75k+ Is career-orientated
City dweller Loves going out with girlfriends

Demographics will only give you the dry facts about Meredith, whereas psychographics will give you insight into her potential buying behavior. The two together give a more holistic picture of Meredith as a customer.

6 Benefits of psychographic segmentation

These are all benefits of psychographic segmentation, or the process of grouping people based on lifestyles and personalities.

  1. You’ll understand your customer’s needs, wants, concerns, motivations and aspirations
  2. Better communication – you’ll be able to talk your customer’s language, on their personal and emotional level
  3. The focus shifts from just the benefits and features of your product or service onto your customer’s life and how you can improve it
  4. You’ll find out how your customers use your product or service, and why
  5. You’ll be able to customize your product for different personas
  6. It goes a step further than behavioral segmentation because it includes attitudes and opinions as well

Get the eBook: How to Drive Profits with Customer Segmentation

The 5 variables of psychographic segmentation

For market researchers, psychographic segmentation means selecting the most likely buyers based on their interests, activities and lifestyle choices.

Psychographic segmentation is increasingly important today as consumers group themselves into smaller and smaller interest tribes such as Iron Man athletes, Game of Thrones fans, BBQ smoker cooks, Fortnite players or social justice warriors. It is also easier now to use psychographic segmentation as a tool because people signal their interests via channels such as social media.

There are five psychographic segmentation variables for market research:

  1. Personality. There’s a strong correlation between customers’ personalities and their buying habits. Some of the personality filters that can be applied in this segment include: introvert, extrovert, emotional, creative, sociable, optimistic and organized.
  2. Lifestyle. A brand can design products or services for different lifestyles. For example, trainers – some people want them for marathon training, others for walking to work, casual wear or as a fashion statement. By analyzing customers’ lifestyles, the right trainers can be targeted at the right audience, and by listening to feedback, the trainers can be improved.
  3. Social status. This affects product choice, price, and niche markets. Each social class has its preferred, and affordable, brands of clothes, grocery store, vehicles and holidays. Cruise companies typically segment their customers by social status:

 

Market Average passenger income per annum
Luxury cruises In excess of $60k
Mid-market cruises Between $40k and $59k
Mass market cruises Between $20k and $39k

 

  1. Activities, Interests, and Opinions (AIO): This variable hones in on enthusiasts and hobbyists as well as interests like sport and politics. It could be as simple as noting that a TV viewer watches mainly comedy movies or as complex as understanding an environmental campaigner’s politics.
  2. Attitudes: Our cultural background and upbringing shapes our attitudes. They reveal a customer’s nature, and because they are intangible, require some imagination on the part of the marketing team when deciding at whom to target a product. You probably wouldn’t offer discount vouchers to a Ferrari driver, but a parent with five children might snap them up.

How to collect psychographic data

The way to start your psychographic segmentation is to conduct research into the interests and hobbies of your customers. This is an easy step: the methodology is straightforward and, for the most part, people are willing to talk about their interests. You may want to ask about:

  • Sports
  • Music
  • Recreation
  • Volunteering groups
  • Activities with their kids
  • Activism
  • Media preferences
  • Values
  • Opinions about current events
  • Brand preferences
  • Personality types (introvert vs. extrovert is always telling)
  • Travel
  • Professional and networking associations

Send out surveys

The most obvious way to uncover segmentable psychographic information with surveys. Because psychographic data is qualitative, it’s best collected using open-ended questions with open text answers.

But keep it short and sweet. It should take no more than five minutes to do and a mixture of multiple-choice and in-depth open text. This is a two-stage process:

1. The first stage is a kick-off question, to reveal what customers want from you to improve their lives. Every industry is different, so you will need to tailor your question more specifically than these generic examples, but here’s the gist:

What are your biggest challenges with [area related to your brand]?
What do you want to achieve in [area related to your brand]?

2. The second stage is refinement, to understand customers as individuals. Questions could be:

If you had to choose just one [product or service] which one would you be most interested in? [Tick boxes of options]

You can also use a Likert scale for customers to report their experiences with your brand or product:

The [product] was easy to use
Strongly agree – agree – neutral – disagree – strongly disagree

Interview customers

It’s good to talk, and conducting face to face, telephone or video interviews enables you to pick up on voice or body language cues that written answers miss. Make sure you interview dissatisfied as well as satisfied customers – they often offer deeper insight into what needs improving. Satisfied customers are great for gathering positive testimonials. Qualtrics research services can help when you want to conduct interviews.

Organize market research panels and focus groups

You’ll be able to gather a wide demographic selection of people with diverse backgrounds. You decide what you need to know and who you want to ask. A market research panel, or online sample, is a group of people recruited to respond to your survey. They are usually chosen from a pool of respondents who’ve agreed to be contacted by a market research service to respond to surveys.

Learn more about Qualtrics Research Services

Online survey software is now a tried and tested solution, replacing traditional methods such as focus groups or interviews. With many people to choose from, your brand can quickly and easily set up market research studies for specific demographics, segments or audience groups.
Such respondents have already agreed to be part of a panel, so online samples tend to achieve higher response rates than other methods such as existing customer databases.

Use digital analytics

You can also delve into your website’s analytics, browsing data and social media likes, retweets and shares to get a good idea of the types of people who are interacting with your brand. Social media listening analyzes text responses to gauge sentiment and ‘the word on the street’ about your brand.

Companies that have mastered psychographic segmentation

The world’s greatest brands are masters of psychographic segmentation.

  • Patagonia understands environmentally conscious outdoor enthusiasts and trekkers
  • Harley Davidson taps into the psyche of riders including their image, attitude and bucket-list trips
  • Snapchat understands youth and their interest in ‘vanishing’ content
  • Microsoft intimately knows what business people in specific industries need to succeed
  • Comic Con connects with fans by making them part of their favorite show, not just watching it

What’s important to remember is that psychographic segmentation is not standalone. It complements:

  • Demographic data – who your customer is
  • Transactional data – what they buy
  • Behavioral data – how they travel through their customer journey

When you have all your data, action the insights it reveals, and make sure that it’s consistent with your branding across all your marketing channels.

Get the Ebook: How to Drive Profits with Customer Segmentation