Psychographic Segmentation in Product Marketing Strategy: The Ultimate Guide

You’ve probably heard of different segmentation methods, from behavioral to demographic and now psychographic segmentation.

Customer segments enable you to find/understand your target audience and boost engagement, making them an important marketing tool. And while each segmentation method has advantages, psychographic segmentation can truly turn your product into a growth engine.

TL;DR

• Psychographic segmentation is a marketing strategy that divides the market into smaller groups based on personality traits, lifestyle, social class, attitudes, interests, and values.
• It differs from demographic segmentation, which focuses on who the customer is, and behavioral segmentation, which focuses on what the customer does.
• Instead, psychographic segmentation aims to understand the motivations and drivers behind customer behavior.
• It enables marketers to create better buyer personas, design more effective products, and position their brands favorably in the market.
• There are four primary ways of collecting psychographic segmentation data, including market research, in-app surveys, focus groups, and customer support teams.
• Use the data you collect to improve your marketing strategies by revising your messaging to meet customer’s needs and adjusting your marketing campaigns to connect with your target customer.
• Userpilot can help you collect all the data you need to better understand your customers. To learn more about that and how its advanced segmentation feature can help you better connect with users, book a demo today.

What is psychographic segmentation?

Psychographic segmentation is a form of targeting that enables marketers to segment customers based on the psychological characteristics that influence their buying behavior, including their personality, lifestyle, social class, and more.

The five psychographic segmentation variables

Psychographic segmentation goes beyond buyer behavior to identify the motivations behind the behavior.

To do that, it tracks and analyzes several psychological variables (psychographic data) influencing buyer behavior to help you better understand the customers’ thinking. These include:

Personality traits

Research has shown that there is a strong correlation between customers’ personalities and their buying habits. Exactly how you classify these personalities will depend on your marketing needs.

Indeed, different personality classifications abound, from extroversion to introversion, creativity, agreeableness, optimism, opinionated, etc.

To be successful, market researchers must determine the dominant personality(s) of their prospective customers and tailor the product to match that personality.

The Nike brand, for example, is an inspirational brand designed for high-achieving athletes. From its innovation to its branding and even its “Just Do It” tagline, Nike appeals to the winning mentality of this customer base.

Lifestyle

A person’s lifestyle and daily habits can also be a strong indicator of their consumption habits, making it a great basis for customer segmentation.

Manufacturers and sellers of home/office furniture and supplies have hacked the lifestyle marketing strategy to a tee. Health-conscious customers will often receive targeted marketing campaigns with ergonomic designs, active customers may receive ads for standing desks, and more.

By analyzing how customer choices align with their lifestyle, they can design better products for each group and target each group with the right marketing messages.

Social status

Social status and class heavily inform a person’s spending habits. It defines their product choices, niche markets, preferences, and the prices they’re willing/able to pay.

Every social class has its preferred shoe and clothing brands, grocery stores, vehicles, electronics, and even holidays.

Of course, social status doesn’t predict everything, but you can safely assume that the preferences of middle-class earners will differ from those of upper-class earners.

For example, vehicle brands Bentley, Land Rover, and Ferrari cater strictly to the upper-class earners who can afford their products. Likewise, you’ll often find separate holiday cruises for low-income versus high-income earners.

Activities, interests, and opinions

Activities, interests, and opinions (AIO) focus on hobbyists, enthusiasts, and individual interests. It segments customers based on the topics they’re interested in or their opinions on certain matters.

The AIO parameter doesn’t always have to be complex. It could be as simple as creating market segments based on the shows a person views or as complex as identifying a person’s product preference based on their politics.

For example, Nike makes different shoes for different interest groups. There are shoes for running enthusiasts, shoes for basketball players, and even shoes for fashion enthusiasts.

Values and Attitudes

Each individual’s attitude is shaped by their cultural background and the way they were raised. As a result, every prospective customer will have a different attitude, which can be a variable for psychographic segmentation.

Because attitude is an intangible parameter, observing it requires some imagination on the part of the marketing team. Even if two persons have the same personality traits, their attitudes toward life may differ.

To properly observe and assess attitudes, you need to ask questions about the customer’s beliefs and find the things they consider important or unimportant.

For example, lifetime pet lovers will be more inclined to purchase premium pet products, regardless of their income bracket. To them, the pet’s comfort is priceless.

Psychographic segmentation vs. demographic segmentation vs. behavioral segmentation

Psychographic segmentation’s focus on intangible characteristics like values and personality traits differs from other forms of segmentation like demographic and behavioral segmentation.

Demographic segmentation uses demographic data, such as gender, age, income, location, etc., to categorize the target audience. It essentially tells you who the customer is on a basic level.

Thus, demographic segmentation groups customers based on their shared demographic characteristics to enable you to create better marketing campaigns.

Similarly, behavioral segmentation groups customers according to their observed behavior. An individual’s browsing or shopping history, for example, can tell you about their buying behaviors, product knowledge, loyalty, etc.

You can also group users based on their attitude toward your brand, salesperson, or product, their use and knowledge of your product, and their willingness to stick to your brand over the competition.

On the other hand, psychographic data goes beyond instantly observable features to understand why individuals act the way they do. In essence, it aims to determine the underlying drivers for observed behavior.

Psychographic segmentation, thus, empowers you to understand your customer’s thought processes by drawing on their habits, opinions, and daily activities.

Why is psychographic segmentation important?

At its core, psychographic market segmentation helps marketing teams to understand the “why” behind individual purchasing habits.

Knowing your customers’ motivations for their purchases will help you to create better buyer personas. It’ll also empower you to design products that more closely match their needs and preferences.

Following the above, understanding your customers’ psychological traits can also help you position yourself favorably in a congested market. It enables you to create targeted and personalized marketing campaigns to engage your target market.

More importantly, if your product is already on the market, psychographic segmentation can help you to identify gaps and pain points within the product.

Understanding customer psychographics ultimately helps businesses allocate their resources more effectively and economically. By doing this, they can drive customer loyalty and raise their marketing ROI.

How to collect psychographic segmentation data

To use psychographic segmentation, you must first collect psychographic data. While there are many different ways to approach this form of data collection, some of the most effective include:

Conduct market research

Market research is an organized effort to gather data about your customers and their needs and preferences.

Although it can get fairly expensive to run, well-conducted market research can tell you a lot about your customer base. It reveals their pain points, background, and goals, helping you to create better buyer personas.

When surveying your target audiences, aim to determine the psychographic factors influencing their actions. With the right questions, you can learn what motivates them, their personal preferences and goals, what they do for fun, etc.

Collect psychographic data with in-app surveys

Your customers are the best source of psychographic information about your target market. The easiest way to collect this data from them is through in-app surveys.

Again, to collect psychographic data, your survey questions must be carefully crafted. Use open-ended questions with open-text answers to understand your customers as individuals and reveal what they want from you.

For instance, you could ask questions like:

• What are your biggest struggles with [area relating to your product or service]?
• What are your goals in [area relating to your product or service]?
• If [your product or service] could [free X hours, save X dollars, etc.], what would you do with the extra time/money?

Conduct focus groups

A focus group is a group of people similar to your target market but unaffiliated with your company who participate in a discussion about your brand and its products.

Good focus groups bring together a diverse group of people. They’re most effective when you craft a thoughtful questionnaire to help you uncover the needs, wants, and desires of your audience.

In addition to discussing their behaviors and motivations, group members can also highlight what they think of your products and messaging.

Involve the customer support team

Your customer support team interacts with your customer base daily, making them great sources of data about each client. Thanks to these interactions, they can recognize similarities in temperaments, desires, etc.

To ensure you get the information you need, though, you’ll have to actively involve the customer service team. Inform them of the right kinds of questions to ask and direct them to record needed data correctly.

If done correctly, your support team can provide you with fresh insights from the front lines of customer relationship management.

How to create psychographic marketing strategies

Once you’ve collected all relevant survey data, you will have more information on who your customer is and why they buy your product. Now, it’s time to put those customer insights to work on your marketing strategies.

Adjust your marketing messages to meet customer needs

Armed with your target customer’s needs and motivations, it’s time to adjust your messaging. Your goal here is to connect your product’s messaging to the customer’s needs and motivate them to buy.

Think about it for a moment: the persons you best connect with are those who recognize your interests, likes, dislikes, and personal quirks. They make you feel seen and loved. The same applies to your target customers.

Likewise, for your message to resonate better with your audience, it must be tailored to their sense of who they are and what they need.

You can, for example, highlight customer testimonials that have the same pain points and achieved their goals using your products and services.

Use psychographic segmentation to reach your target market

Psychographic segmentation is also a great tool for identifying and reaching your target audience. You can use psychographic segmentation to update your buyer persona, product roadmap, and other marketing materials.

As you better understand the psychology of your audience, you may be able to test new concepts for products and services. Most importantly, though, you’ll be able to create effective marketing campaigns that meet their needs.

After some psychographic analysis, for example, a cloud-based project management software may find that it has two customer groups: “collaborative creatives” such as design studios and “efficient organizers” from businesses looking to streamline processes and workflows.

For creatives, its marketing campaign may highlight creative brainstorming and collaboration. It could showcase teams working together to turn ideas into creative projects.

For organizers, it could focus on efficiency, deadlines, and productivity. It may showcase efficient task management and project planning, and emphasize features like automation and analytics.

By personalizing each campaign to the motivations driving both user groups, you’ll be able to speak directly to their values and connect with them.

Psychographic segmentation examples

Thankfully, several real-life psychographic segmentation examples abound to guide your process.

Apple focuses its marketing efforts on building products that match customer lifestyles

Tech and marketing giant Apple provides one of the foremost examples of psychographic segmentation out there.

Despite its large demographic market, Apple focuses on users who value innovation, quality, and a premium user experience. As a result, its products are designed for lovers of sleek design, cutting-edge tech, and brand status.

Apple also invests in understanding how users interact with their devices and why. The result is a hugely successful marketing emphasis on innovation and exclusivity.

Tropicana connects with its target audience through a healthy lifestyle blog

Designed for a health-conscious target market, Tropicana orange juice positions itself as a healthy alternative to soda and sugary drinks.

To reach this community, Tropicana partners with blogger “Tropimamma” to offer health advice to an audience that consists primarily of young moms. They also use social media to share health advice and receive customer feedback.

As a result, they’re able to successfully connect with health-conscious individuals looking to escape the junk in the world.

Conclusion

Psychographic segmentation isn’t magic. It empowers you to understand your customers’ thought patterns, enabling you to better engage with them on a human level.

Book a Userpilot demo today to learn how we can help you better analyze your customer base and target specific portions of them with personalized messages.