Psychographic segmentation
Carol M Morgan, Doran J Levy, Michel Fortin. Communication World. San Francisco:
Dec 2002/Jan 2003. Vol. 20, Iss. 1; pg. 22, 4 pgs Abstract
(Summary)
Psychographics measure the motivations behind a behavior, including why
individuals in a specific generation or income bracket will accept or reject a
message, act on it or ignore it. Using psychographics can help communicators
improve the quality and accountability of their campaigns by zeroing in on the
most receptive audience for their message. When attitudes, motivations,
personality characteristics, and belief systems are analyzed mathematically or
statistically to determine groups with substantially different attitudes, the
result is a psychographic segmentation. With segmentation, the need to either
oversimplify or use averages evaporates, and communicators can select the most
effective message for each segment. Return on investment can be enhanced by
examining a psychographic segment's demographics.
How to increase communication ROI by examining values, beliefs and motivations
For many years, demographics have governed how communicators target their
campaigns. The problem is that even though individuals in a specific demographic
category share some common characteristic, such as age, sex or income, the
psychographics of these groups-their values, motivations and beliefs-are not
homogeneous. There are multiple motivations for a behavior, and people in a
specific demographic category have a wide range of attitudes. Although
demographics can turn up objective facts, such as that your target customer owns
a car, they can't tell you why the person bought the car. Psychographics can.
They measure the motivations behind a behavior, including why individuals in a
specific generation or income bracket will accept or reject a message, act on it
or ignore it. Using psychographics can help communicators improve the quality
and accountability of their campaigns by zeroing in on the most receptive
audience for their message.
COMMON OBSTACLES
When first beginning to understand and apply psychographics, communicators often
run into three impediments.
* The first is using demographics to infer an audience's motivations or
behaviors. For example, the suggestion that all mothers believe it is important
for their children to play a musical instrument. Such inferences are based on
intuited leaps of faith, and the relationships they postulate do not necessarily
have a basis in reality.
* A second obstacle is the multiplicity of attitudes and motivations within an
audience. There may be multiple motivations for a behavior, and individuals in a
demographic category have a wide range of attitudes toward a subject. Statements
such as "The primary motivators for Latin Americans are home and family" or
"Resistance to authority is a hallmark of Generation Y" are oversimplifications.
* The third obstruction to understanding audience motivation lies in creating
messages targeted to an average. An "average consumer" does not exist, and
messages targeted to this mythical audience remain too general to convince or
motivate anyone. In addition, an "average" perspective submerges and ignores the
real motivational differences that occur naturally within every audience.
For example, when attitude toward a subject or awareness of it is measured
before and after a communication, the results are usually reported as averages
of the total population. Before an information campaign, a communicator may note
that an average of 42 percent of an audience agrees that an employee benefit is
important, whereas an average of 58 percent agrees after-ward. The problem with
reporting averages is that a segment within that average may feel far more
strongly about the subject than others-and that one segment may be more critical
to the company's success than any other.
SUCCESS THROUGH SEGMENTATION These roadblocks can be removed by applying
psychographic segmentation. When attitudes, motivations, personality
characteristics and belief systems are analyzed mathematically or statistically
to determine groups with substantially different attitudes, the result is a
psychographic segmentation. When psychographics are segmented, the need to
either oversimplify or use averages evaporates, and communicators can select the
most effective message for each segment. For one segment a message may confirm
an established viewpoint, and for another, a targeted message will change a
mindset. Segments that consider an issue or subject to be far more important
than does the mythical average could be made up of opinion leaders who influence
others' viewpoints. When these weighty segments are measured in a statistically
accurate way, a communicator can compare before and after measures-by segment-to
determine the true impact of a program.
Return on investment can be further enhanced by examining a psychographic
segment's demographics. For example, a segment may be receptive to a particular
product, but lack the financial resources to actually purchase it. Or, although
receptive, those in a particular segment may avoid mass media to such an extent
that few messages, no matter how relevant, will reach them. The behaviors of a
particular psychographic segment can confirm for the communicator whether a
segment that evinces a particular attitude actually follows through with a
tangible behavior. Looking at all the facets of a psychographic segment
establishes whether or not it is a worthwhile target, allowing efforts to be
focused on the most profitable segments, as well as those with the highest
potential.
BREAKING DOWN BABY BOOMERS
For many organizations, baby boomers and mature consumers are an important
audience. People 40 and older compose 42 percent of the U.S. population, and
will grow to almost half (47 percent) by 2010. This immense demographic group is
responsible for 66 percent of all expenditures tracked by the Consumer
Expenditure Survey (CXS); enjoys 64 percent of all pretax income and controls 65
percent of all discretionary spending; and, according to the U.S. Bureau of
Labor Statistics, comprises 47 percent of all employees.
Since 1989, Strategic Directions Group in St. Paul, Minn., has conducted seven
studies, including surveying 20,000 people 40 and older, to develop a
comprehensive perspective on this important U.S. market. Each study gathered
demographics, behaviors, and media and Internet usage, which when combined
resulted in the development of nine psychographic segmentations for this market:
Lifestyle, Financial, Travel, Food, Car Purchase, Car Maintenance, Health,
Health Information and Health Compliance.
Knowing what motivates baby boomers-by segment-can be useful in many
applications. One is persuading individual boomers to continue working after
retirement, thereby benefiting the company with their high-- level skills. For
example, the Lifestyle segment identified by Strategic Directions Group is
divided into categories, including Financial Positives and Upbeat Enjoyers.
Examined by their demographics, both are affluent, educated segments. But
whereas Financial Positives have planned for a leisurely retirement with no
interest in returning to work, Upbeat Enjoyers are definitely interested in
continuing to work after retirement.
The behaviors of each segment parallel their attitudes. At a statistically
significant level, fewer Financial Positives who have retired with no intention
of returning to work are now working full or part time than are the other
Lifestyle segments. One in three (34 percent) once-retired Financial
TAKE A PSYCHOGRAPHICS TEST-DRIVE
Want a demonstration of how psychographics work? Visit http:// cartalk.cars.com/Survey/Results/
Psychographics to see if the car you drive is suited to your personality.
[Sidebar] HOW TO TARGET YOUR MOST PROFITABLE MARKET
Many marketers run into trouble when they try to be "all things to all people"
and attempt to market their product to everyone. Instead, try to discover the
demographics and psychographics of your niche-your specific (or greatest)
market. Then market to that audience more than any other, and as often as
possible.
Demographics are the basic qualities and characteristics of your market. They
include age, gender, culture, employment, industry, income level, marital
status, location and so on. On the other hand, psychographics are made up of the
emotional and behavioral qualities of your market. They include the emotions,
reasoning, history, psychology and thought processes behind people's decision to
buy your product.
[Sidebar]
INTELLIGENCE GATHERING
[Sidebar]
In other words, demographics include the segment of the population that needs
your product, whereas psychographics define those within your demographics who
want your product. If you don't know this, you can easily conduct a survey as
part of a marketing research campaign among your current clients, potential
clients and clients of other similar products or companies. Don't underestimate
your greatest source for marketing research-clients!
[Sidebar]
For example, here's a list of questions you should ask:
* Why did your clients buy your product? If they didn't buy it, why not?
* Why, specifically, did they buy from you or your competitor?
* Why did they not buy from you or the competition?
* Why did they buy from you at that specific time?
* Why did they buy right away (on impulse) or take their time?
* If they shopped around, why did they? Where did they go?
* What do they like the most and the least about the product?
* Would they refer you to others? Why or why not?
* What specific benefits do they see in your product?
* What specific benefits do they see in your competitor's product?
[Sidebar]
These are immensely important questions that can help you, guide you or even
cause you to change your approach altogether. Don't discount the power of doing
marketing research, especially within your own back yard, You want to know not
only who buys from you but, more important, why they do. In other words, think
psychographics and not just demographics.
[Sidebar]
TARGET YOUR MARKET
[Sidebar]
To illustrate the difference between demographics and psychographics: Hair
transplant doctors cater mainly to men who have experienced hair loss and are
able to afford an expensive operation. Men-bald men, specifically-are potential
patients because they may need more hair. Psychographics, on the other hand, go
a little further. In this example, potential patients are men who not only need
but also want more hair-because not all of them do. (It's a matter of
priorities, just like the type of clothing one chooses to wear.)
Therefore, to target this market as precisely as possible and thus generate
better leads, doctors must take the psychographic element into account, such as
their patients' lifestyles, their interests, the types of industries in which
they work (certain industries are image-related), as well as their previous
buying habits (such as men who have already invested in other hair-replacement
solutions)-the more information the better.
If you arm yourself with as much of this type of information as possible
beforehand, your chances of achieving greater success with your product will
increase. Just as you can't be everything to everyone, you shouldn't be
targeting everyone for everything.
[Sidebar]
Michel Fortin, based in Ottawa, Canada, is a direct response copywriter and
consultant dedicated to turning businesses into powerful magnets. Visit his web
site for more information, www.successdoctor.com.
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