No two people are created equal, and no two customers are identical. Market segmentation is a must for any company that wants to maximize its reach. Even within a specific niche, segmenting enables you to reach different sections of society, giving you inroads to more customers and increasing the loyalty of those consumers.
The most common form of segmenting is breaking down a population by demographics. For example, men might get a different message than women, and older customers would receive a different style of marketing than younger consumers. On the surface, this is a great way to differentiate between groups of customers who are fundamentally different and cannot be reached via identical means.
However, while demographic segmentation does have its place in marketing, it’s not the most efficient way to segment. To really find out the divisions in your marketplace, you have to dig a little deeper. After all, there’s more to people than their age or gender. Behaviors and attitudes are far more important in terms of creating customer profiles and identifying ways to reach groups of people.
Psychographic segmentation takes the traditional forms of segmenting and goes well beyond the barriers that once existed. As the name suggests, psychographic segmentation ventures into the various ways that people think and feel about the world around them.
The more you understand a population, the better you’ll be able to market to this group. Psychographic segmentation allows you to develop new insights based on questions you might never have considered. For example, you can learn whether your customers value price or brand name, and you can also see how different discounts affect buying behavior.
The sky’s the limit with psychographic segmentation, but the deeper you try to go with market segmentation, the more diminishing returns you’re likely to receive. For instance, sending out surveys to determine consumer behavior only works if you get a high response rate and your customers tell the truth. Psychographic segmentation also requires frequent maintenance and updating of customer profiles. After all, demographics rarely change, but people’s attitudes change frequently.
In spite of some flaws, psychographic segmentation is easily the most effective and incisive way to understand your customers and give them the personal touch that’s necessary to retain their business. To learn more about psychographic segmentation and other market research tools, check out eCornell’s Marketing Strategy Certificate. This online program offers in-depth training on:
- Marketing strategy, marketing research and analysis
- Applied tools such as segmentation, targeting, positioning, and strategic pricing
- Brand management and brand equity
- Promotion strategies