Psychographic segmentation is a form of market segmentation that helps to know consumers in much depth. There’s a reason behind every purchase of a customer, psychographic segmentation helps to decipher the ‘why‘ of the decision-making process.

When combined with other market segmentation data, many marketers believe it provides a more holistic view of audiences. In this article, We are going to see how psychographic segmentation creates a difference in customer retention.

Table of contents

What Is Psychographic Segmentation?

Psychographic segmentation is a part of marketing segmentation that deals with psychological aspects behind consumer purchases such as emotions, goals, aspirations, and resonating factors.

It is a marketing strategy that helps businesses not only to create products that meet customers’ specific requirements but make campaigns that generate incredible revenues.

Psychographic segmentation uses psychographic data to know the minds of your target audiences.

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How Psychographic Data Is Collected?

Initially, psychographic information is gathered through quantitative research and used to create different segments. The simplest way to accomplish this is through survey research.

As the majority of the world now has access to the Internet, with a significant shift toward mobile internet usage, online surveys are becoming an increasingly relevant way to gain consumer insights

Using online panels speeds up and improves accuracy, and ensuring question content clearly addresses the relevant information required for psychographic targeting is critical to the data collection process’s success.

Because they are an effective method of determining prospective customer values and beliefs, Likert scales are frequently used in psychographic surveys. To eliminate bias and develop more accurate segments, quantitative research is frequently followed by qualitative research, such as one-on-one interviews or focus groups.

Why Do We Use Psychographic Segmentation?

Everything begins with a thought. It is the origin of ideas, passion, inspiration, and aspiration.

The point is, when you use psychographic segmentation in marketing, it helps to make your marketing more relevant—that is, if the information used to create the segmentation is accurate.

Psychographic segmentation allows a deeper understanding of your customer personas on a personalized level. Once you understand what your customers need and want, you can create better products that will cater to their specific needs. It can increase the effectiveness of your:

Email campaign: Today’s consumers demand hyper-personalization. The more personalized your campaign the more revenue you’ll generate. Psychographic segmentation allows you to cater to those demands. You can acquire some help from a qualified email marketing agency to start producing personalized campaigns.

Content: When you create content that is highly targeted to your specific target audience, you can directly attract inbound leads, because you’re able to resonate with your customers.

Website: It is your home online. When you design for a specific niche audience, there’s no way they can deviate from your influence.

Your commercials: Focusing on specific segments can be especially effective when advertising on Facebook and other social media platforms. Assume you’re trying to reach out to interior designers: You can target the ad on Facebook to reach users who follow home-decorating magazines, websites, or businesses.

Five Psychographic Segmentation Variables

In the below section, we will discuss the five basic psychographic variables for segmenting process:

psychographic segmentation

Personality

Personality segmentation is the process of categorizing buyers who share similar personality traits into segments. Some prominent personalities are introverted, extroverted, emotional, and opinionated. This is an excellent way to segment buyers because customer personality and purchasing habits are so closely related.

Market researchers can use psychographic segmentation variables to create products based on the personalities of the majority of its consumers, which can help boost sales. Previously, many liquors, laptops, car, and perfume brands used their customers’ personality traits to improve their marketing efforts.

Lifestyle

This psychographic segmentation variable categorizes respondents based on their lifestyles. A person’s lifestyle can refer to the ways in which they spend their money, time, and/or energy.

For example, if a vintage cloth manufacturer intends to design clothes for various market segments such as fashion celebs, office workers, work-from-home moms, and so on. Customers whose lifestyle revolves around the office or home, those who prefer formal clothes, and similar other criteria are used to segment groups. As a result, the manufacturer can create clothes that cater to every lifestyle, i.e. likes and dislikes, assisting in the development of a brand that creates vintage clothes for every market segment based on lifestyle.

Social Status

Customers are frequently segmented based on their social class. High-end products, such as Chanel and Christian Dior, will be marketed to the upper-class consumer. On the other hand, some brands cater to the masses by designing products for the average middle-class consumer. This includes retailers like H&M and Marks & Spencer.

AIO (Activities, Interest, And Opinions)

This form of segmentation categorizes consumers based on their interests and activities. It may include hobbies, media consumption habits, and what people do with their free time.

Some viewers prefer stand-up comedies, while others prefer Narcos or Wild Wild Country – whether thriller or comedy, the common activity here is watching online shows. A researcher can determine preferred products and services based on the preferred activity and develop marketing strategies to cater to a wide range of activities, interests, and opinions.

Attitudes

A person’s attitude can be shaped by their upbringing, the values instilled in them, and their culture. Buyers are divided into groups based on their thoughts, attitudes, and motivators in this type of segmentation.

Customers are divided into groups based on their thoughts and attitudes. Attitude is an intangible parameter that provides insights into a customer’s basic nature. Each customer has a different attitude – a high-income individual will prefer to dine at fine restaurants and drive a Mercedes Benz, whereas a middle-class individual is more concerned with saving money rather than with luxury. These considerations must be kept in mind by a marketer when determining the target market for an upcoming product feature or a new product.

Psychographic Segmentation Examples

Have a quick look at the examples of differentiating on the basis of psychographic analysis:

Travel

As you are aware, there is a world of difference between going on a business trip and taking a vacation, but even within these distinct categories, there are numerous shades of variation in terms of why someone would choose to go on a business trip or a vacation.

For example, under the broad umbrella of “leisure trips,” you might find travelers looking for a new adventure as well as those looking to get away for some much-needed rest. Using psychographic segmentation in marketing, brands can drill down further to identify potential motivations for various travel plans, allowing them to tailor their campaign messages (and travel packages) to their target audience‘s desires, priorities, and preferences.

Healthcare

The healthcare industry has faced significant challenges in terms of encouraging patient engagement and healthier lifestyles, owing primarily to a lack of adequate audience profiling and targeting examples, techniques, and methodologies.

Psychographic segmentation in marketing can be used by doctors, hospitals, healthcare systems, health insurance carriers, and other industry participants to group potential healthcare consumers based on their key beliefs and preferences, such as individuals who:

  • Rely heavily on their healthcare professional’s recommendations and opinions; prioritize someone else’s health and well-being over their own.
  • Be proactive in seeking information and direction to improve their health and well-being.
  • Believe in the legitimacy of naturopathic or holistic medicine (or reject it).
  • Exhibit a variety of other motivations, beliefs, and/or priorities.

Retail

Retail product marketers typically attempt to identify their target audience based on key demographic data points such as income, education level, number (and ages) of children in the household, and so on.

Psychographic segmentation identifies the psychological differences between your buyer persona, allowing marketing teams to create granular consumer profiles that highlight the various priorities and motives driving their purchasing decisions. As an example:

One family may permit their children to spend more time with electronic devices because they believe it is important to expose their children to new forms of technology. This type of household may fall under the consumer profile of an “enabler” in psychographics because they encourage their children to use electronics more frequently.

4 Advantages Of Psychographic Segmentation

Have a look at the benefits of implementing psychographic segmentation:

Allow Messaging to a Target Market

Not everything is essential. When you use psychographic segmentation, you are sticking to a specific niche market, which can help you yield long-term results.

Enhances Customer Understanding

Your understanding of the buyer’s persona is not only limited to their demographics, interest, likes, and dislikes. But, a more sensitive factor such as psychology.

Helps to Cater To Changing Customer Demands

In this fast-paced world, people’s demands are constantly changing, as are their thought processes. Psychographic segmentation helps to comprehend their changing thought process and purchasing habits.

Allow Personalization

It is far more effective than geographic or demographic segmentation because it provides details about factors such as lifestyles, interests, opinions, and so on.

With the aid of psychographic segmentation, customization of products and marketing campaigns becomes a lot easier.

Summing Up

Identifying psychographic segments allows you to gain valuable insights about your target market that other forms of segmentation do not cover, allowing you to uncover personal factors that influence purchasing decisions.

However, before conducting psychographic research, you should consider its limitations, such as high costs and potential inconsistencies with analysis that may arise if not proactively addressed.