Demographics Vs. Psychographics In Audience Segmentation

+ Demographics Vs. Psychographics In Audience Segmentation


Writer: Dejan Kvrgic

Expert: Veronika Boskova

Editor: Viri Serrano

Designer: Mark Yoder

As marketers, we are all used to looking at the market in a certain way – and dividing it based on age, gender, location, education, and similar broad, basic variables.

That practice – known as demographic segmentation – has been around for decades, helping businesses understand and target potential customers more accurately.  And yet, it’s not uncommon for people who may technically fall within the same broad categories to act and make purchase decisions in radically different ways. 

That brings us to the issue of marketing budgets: Does that mean that demographic segmentation no longer cuts it? No, we wouldn’t go as far as to invalidate the usefulness of demographics. That said, we believe that there is a need for brands to dig a bit deeper and analyze their target market using a slightly more detailed and insightful approach.  And that’s where psychographics enters the stage: Focusing on the more “intangible” characteristics – things like consumers’ interests, preferences, habits, behaviors, and emotions – psychographic segmentation allows marketing teams to refine their approach and understand the target consumer better. With that in mind, we feel that it might be time for a demographics vs. psychographics debate – a discussion about how effective the “traditional” approach is in this day and age. 

Demographics Vs. Psychographics: Exploring The Difference 

The main goal of a segmentation study is to split up large and diverse groups into smaller target markets that should be more responsive to your product or brand message. Obviously, you can’t target the entire market; that would make zero sense when it comes to your marketing budget and the effectiveness of your campaigns. Instead, you need to divide it into groups – and see whose needs you can realistically cater to as a business. 

And the first step to getting there is employing demographic segmentation. Demographic segmentation is a foundation of solid marketing strategy, but don’t fall into the trap of relying solely on demographics to identify these unique groups. To dig deep enough, you also need to consider behaviors and psychographics. 

Demographics can tell you a bit more about who your target buyers are. Psychographics, on the other hand, may provide insights into what compels these consumer groups to make purchasing decisions the way they do. That might just be the simplest way to summarize the difference between these two approaches to audience segmentation. But knowing both who your target buyers are and what makes them tick could help you segment your audience, target the right consumers, and position your products or services better, making all your marketing efforts more efficient.

One, as we’ll discuss later, doesn’t work that well without the other. It is like seeing only one half of the picture while remaining blind to the other. Combine demographics and psychographics, and you get a robust marketing duo that gives you a 360-degree view of your target consumers. From there, it’s possible to use those insights to navigate product design, marketing strategy, brand messaging, and even pricing philosophy. 

Demographics: Definition & Factors 

Demographic segmentation refers to the method of dividing the target market based on generic demographic variables – such as age, gender, education, income, and marital status, to name a few. The goal here is to determine who you think will be your typical customer so that you can target that particular portion of the market. The most commonly used demographic segmentation factors include:

  • Age – While that isn’t always the case, more often than not, different age groups tend to have different interests, wants, and expectations. As such, it is a key variable in homing in on your target audience. 
  • Gender – Do note that gender-based audience segmentation is a “double-edged sword.” Done right, it’s a powerful marketing tool. But done wrong, it may make it seem like you are simply fueling gender stereotypes.
  • Income – Income will obviously have an impact on the consumers’ purchasing decisions, which makes this an important consideration when determining your pricing strategy. 
  • Education & Profession – While this isn’t the universal truth, income is – in most cases – closely related to the consumers’ educational backgrounds and professions. These three factors could influence one another in terms of consumers’ spending power, for example.
  • Family Status – Another distinct group of demographic traits to consider can be found in your audience’s homes. Things such as marital status and number of children could play into what the customers need and where they choose to spend money. 
  • Ethnicity & Race – Customers’ preferences can also be affected by their cultural, racial, and ethnic backgrounds. It is essential that you’re mindful of these categorizations when looking at your target market.

Psychographics: Definition & Factors 

Psychographics can be defined as the psychological and cognitive attributes that provide insight into the customers’ beliefs, values, goals – and, ultimately, purchasing habits. Psychographic audience segmentation is based on things like personality characteristics and traits, lifestyle, habits, behaviors, interests, and social class. Psychological factors such as these tend to influence the consumer’s behavior – and as such, can be used to gain deeper insight into what motivates them and personalize your marketing strategy accordingly. 

Let’s look at each of these factors – and see what they can tell you about your target audience’s psychographic makeup

  • Personality Characteristics – Factors like values, preferences, opinions, beliefs, as well as personality traits play into how your customers interact with the world. Understanding these factors makes it easier to connect with your target audience on a more meaningful level. 
  • Lifestyle – Lifestyle metrics can tell you more about how the consumer views themself in society – and how they choose to structure their lives. Factors like relationship status and occupation – or any other major life choice – can be reflected within this metric. 
  • Habits – Habits as psychographic factors help you identify things that are an integral part of the customers’ routines and things they’re used to in their day-to-day lives – both good and bad. Given that habits aren’t always easy to break, they must be taken into account.
  • Behaviors – Behavioral psychographic factors – or, in simpler words, how the consumers behave – typically play into their buying patterns and product usage and might also affect how often they shop for specific product categories. 
  • Social Class – While social classes are not officially a thing in the US, it’s not uncommon for consumers to view themselves as part of the lower, middle, or upper class, making all their purchase decisions based on that. 
  • Interests – This factor often influences how the consumer interacts with the brand. While everyone’s different in this regard, there are usually some shared interests you can take note of and employ in your marketing campaigns.

Disadvantages Of Demographic Segmentation

At this point, it should be evident that using only demographic segmentation may not be the best fit for every business out there. Why? Demographics-based audience segmentation has quite a few limitations. For one, it can sometimes be a bit too “one-dimensional.” You’re relying on simple demographic data – which can potentially cause you to make blanket statements and assumptions about your target audience. In other words, it doesn’t leave any room for people who may not fit into a generic demographic “mold.” Two, the information it provides is often too vague to allow for any actual customizations in your marketing approach. It focuses on simple metrics and fails to recognize actual consumer wants, values, or behaviors. And three, with the constant changes we see in every aspect of our lives, demographics run the risk of being misinterpreted – and, at times, flat-out outdated. 

Can Psychographic Segmentation Work On Its Own? 

There’s no denying that demographic segmentation is a great starting point for marketing teams. You get to split your target market into broader segments based on simple data – things such as the person’s age, gender, and location. That’s nowhere near enough, though. It isn’t until you include psychographics into the mix that a whole new world of customer insights opens up for you – allowing you to create detailed buyer personas and deliver highly customized experiences. 

Here’s the thing: Most of us just want to be understood. That has nothing to do with marketing; it’s a basic human truth. Today’s consumers are guided by subjective perceptions and will make their purchase decisions on a subconscious level. Psychographics could help you uncover and understand those aspects of a target audience that you wouldn’t be able to tap into if you relied solely on demographics. So, does that mean that you should always begin with demographic audience segmentation and build on it by adding psychographics into the equation? Or can you afford to skip the “traditional” method – and go straight for the psychographics? 

It depends. The truth is that there’s no need for these two methods of audience segmentation to be mutually exclusive. In fact, they complement each other pretty well. Then again, sometimes intangible, psychographics-based targeting can be enough – even when it’s used on its own. That’s because psychographics provides insights into what your consumers need, want, and value – which is much more important than what demographic group they belong to.