Getting started with psychographic market segmentation

Trying to understand your potential customers – who they are and what makes them tick? Wish you could just crack open their minds and step right in? 

Good news – psychographic segmentation lets you do exactly that! Better yet, in this guide, we’ll walk you through the key types of psychographic data to focus on and how to start harnessing it for your organization.

Let’s jump in.

What is market segmentation?

Before we get down to the nitty-gritty of psychographics, let’s take a broader view of market segmentation.  

Market segmentation is a key strategy in product marketing. In a nutshell, it means dividing up your broad target market into different consumer subsets, or segments. These segments are typically based on demographic, behavioral, geographic, and psychographic characteristics – more on those in a sec!

The goal? To match products and messaging to your customer segments in a way that clicks with them. Get it right, and you've got yourself some tailored marketing that feels relevant to the people you’re trying to reach. 

Not only that, but good market segmentation helps you boost sales, build loyalty, trim the fat on marketing budgets, and maybe even charge a premium. 

Long story short? Segmentation brings some serious strategy to the table. It's how smart brands get personal at scale.

Key types of segmentation

When it comes to segmenting their target markets, there are four go-to ways brands tend to slice and dice things. Let’s break them down:

Demographic segmentation

This first slice covers basic background details on your target customers – age, gender, income, and the like. This data is generally easy enough to get hold of, but it doesn’t tell you much about customers’ motivations for buying. It’s a great starting point though.

Geographic segmentation

Next up is geographic data – think languages, cities, and regions. This tells you where your target audience is. Again, it’s pretty easy to grab but not hugely useful in isolation. 

Behavioral segmentation

Behavioral segmentation looks at how your customers buy. This includes handy data like how long customers spend on your site before making a purchase, which pages they browse, and whether they've signed up for your newsletter or downloaded your app. This is all valuable intel, but you’ve got to work for it.

What is psychographic market segmentation?

We’ve covered three of the four core types of market segmentation – now let’s dive into arguably the most interesting one: Psychographic segmentation.

This is all about tapping into the “why” behind your customers' buying decisions – their motivations and values at a core human level. It’s the intel that clues you into the actual person behind each transaction.

It works by dividing your audience into groups based on psychological qualities and behavioral traits. The goal is to ID subsets matching key criteria that set them apart from the crowd. With solid psychographic segments in place, you can get way more targeted in your messaging and product offerings.

The kind of intel we're talking about here ties to personality, attitudes, opinions, interests, and goals - the building blocks shaping people's choices. It's powerful stuff, but trickier to collect than basic demographic information. 

Typically, psychographic data comes from direct interviews or surveys with customized questions designed to uncover views, beliefs, preferences, and more. This can then be used to build more tailored marketing campaigns.

For example, take two big drink brands. Bacardi may focus its questions around fun, socialization, and status – zeroing in on laidback customers who like to party. Meanwhile, Jacobs Creek goes after would-be wine connoisseurs interested in craftsmanship and tradition. Each brand tunnels into a very different inner world.

The takeaway? 

Psychographic segmentation is key to getting inside customers' heads, understanding what makes them tick, and uncovering why they buy. When you combine this data with demographic, geographic, and behavioral data, you can build some seriously impactful campaigns.

Six key psychographic data points

How you decide to slice and dice things will depend largely on your audience and your product, but if you opt for the psychographic route, here are six key data points to consider:

Personality

Your customers' personalities – how they think, process information, and make decisions – are a big piece of the psychographic puzzle. Are they outgoing or reserved? Analytical or emotional? Adventure-seekers or homebodies? 

Crafting messaging that fits the most common personality traits shared by your target audience is key to forging an instant connection. For example, Jeep has done an awesome job of aligning itself with outgoing, adventurous personality types who see themselves in the rugged, off-road positioning – always ready for adventure. 

Lifestyle

Now let's look at how people actually live their day-to-day lives – how they spend their precious time, money, and energy. If your messaging can chime with that lifestyle the way Depop resonates with Gen Z, or luxury travel taps into high-flying executives, then boom – instant familiarity for customers. 

Athletic brands like Gymshark have crushed it by wrapping themselves in an aspirational image of healthy, active living to attract customers already living that sweatlife.

Social status

Unlike personality or lifestyle intel, data on social status zooms out and looks at how people view themselves compared to others around them, prestige-wise. It gets at desires tied to “keeping up with the Joneses” or standing apart from the crowd. 

High-end fashion brands like Balenciaga, for example, target buyers wanting the latest runway styles before anyone else – similar to how Mercedes sells that feeling of having “made it” compared to the average cubicle dweller. Tapping into perceptions of status can be marketing gold.

AIO (Activities, interests, and opinions)

AIO data looks closely at the topics and ideas that matter most to your audience. This is invaluable for identifying shared viewpoints and behaviors you can play to. 

Workday harnessed AIO brilliantly in their 2023 Super Bowl ad, appealing to office workers sick to the back teeth of corporate clichés. 

Attitudes

Attitudes data takes a  high-level look at customers’ mindsets and core beliefs. If you can identify attitudes held dear amongst your audience and authentically reflect those in your brand ethos, then it's a values match made in heaven. 

Take Patagonia, whose owner famously donated the company to a charitable trust fighting climate change. It’s hard to imagine how a brand could better appeal to environmentally-conscious consumers.

Priorities and motivations

Last but certainly not least, we’ve got to talk priorities and motivations – the “why” behind customer behavior. What innate human needs are they looking to fill? What goals are they locked into? If you can predict and speak to those underlying drivers fueling decisions, you’ll create an irresistible value proposition for your potential customer base. 

Slack have nailed this concept across their suite of offerings. Just take a look at this simple yet powerful copy from their homepage: 

“Speed up work with external partners, using Slack Connect.” 

In just nine words, it addresses the needs and frustrations of potential clients. Brilliant!

How to carry out psychographic segmentation

So, we've talked about psychographic segmentation and how it can help you make your product more attractive to your target audience. Now, let's dive into how you can start collecting and using this valuable data. 

Step one: Gather data

First, you need to gather as much psychographic information about your existing audience as possible. But this data needs to be solid - and size matters here: You’ll want to pull data from a large existing audience. That way, you know you’re building your segments on data that accurately reflects the people willing to spend money with you.

Market segments are born from the data you collect on your audience, and the customers, web visitors, and leads that make up that audience. The larger this pool is already, the easier a time you’ll have pulling out accurate data. 

Small data sets are the bane of many an analyst because they give too much weight to outliers. Larger datasets make it easier to identify real patterns and trends by reducing the impact of individual data points.

You’ll also want to conduct more general customer research. Make sure going into this process that you’ve spoken to your customers and understand their needs. What are their pain points? How does your product solve their problems?

Data sources

To get an insight into your customers’ minds, the best place to start is with a survey. The exact questions you ask will depend on your target audience, product, business model, and aims but here are a few to get you started:

• How would you describe yourself in three words?
• What are your top three leisure activities?
• What values matter most to you when choosing a product or service?
• What’s the number one thing you care about when buying online?
• Name a brand you feel loyal to and explain why.
• How do you prioritize spending vs. saving?
• What do you like most about our product?
• What made you buy it in the first place?
• What’s your number one pet peeve at work?

Remember: Nobody likes spending hours filling in a survey, so choose your questions carefully and keep it brief. To boost the number of responses, it’s a great idea to incentivize your survey or enter respondents into a prize draw.

Once you’ve got a nice robust survey dataset, validate it with information from the following sources:

• Public, third-party research
• Your marketing funnel (ad accounts, social media, your website)
• Your analytics and tracking tools
• Your CRM and other software

Step two: Analyze the data

Once you’ve done your customer research and gathered your audience data, you need to analyze it and find the patterns amongst your highest-value customers. If you can identify what they have in common, you can start to find other commonalities. This can uncover new opportunities for you to target.

You can combine this knowledge of individual, high-value customers with your knowledge of the wider market and your ideal customer profiles (ICPs). This’ll give you a better theoretical understanding of how your ideal consumer interacts with your products and moves through your funnel.

For example, imagine your ICP describes a risk-taker who loves experimenting with new products, but you find that most of your high-value customers are actually cautious and prefer well-established products with proven benefits. In this case, it would be wise to tailor your strategies toward those who look for reliability and proven effectiveness in their product choices.

Step three: Combine segments for specificity

Some segments are far too broad to be of much use on their own. “Fun-loving sports fans” doesn’t give you much to work with when it comes to personalizing your messaging and content delivery.

“Fun-loving US-based sports fans aged 25-34, employed full-time and earning $30k-50k a year” combines criteria for a much more useful and specific segment.

Step four: Segment by what matters

Your product’s value is a measure of the emotional benefits it provides to consumers, so for real ROI on your segmentation efforts, you need to focus on the segments with the strongest emotional need for a product like yours.

When you can identify specific segments, and especially when you can incorporate behavioral data, you get a clear picture of which segments are searching for a product like yours, and which of those are most likely to buy soon.

Focusing your marketing efforts on members of segments like this is sure to drastically improve your return on investment.

Step five: Test and tweak

As with any product marketing deliverable, it doesn’t stop here. The world never stands still and new data rolls in all the time. It’s vital that you use this new data to continually improve your segments, making them even more accurate.

Having a crystal-clear understanding of your market segments can give you a competitive edge in the business world. 

By tapping into the unique needs and preferences of your target audience, you can make informed business decisions, streamline your marketing efforts, and ultimately increase the sales of your product. Pretty cool, right?

That’s a wrap!

At the end of the day, psychographic segmentation is all about resonance. 

When you can target segments that share attitudes, personalities, and motivations, you start speaking your customers’ language – and that means way higher chances of turning interest into real sales. 

So, are you ready to get psychographic and step into your customers' worlds?

Want to learn more?

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