Psychographics Are Just as Important for Marketers as
Demographics
WELCOME TO THE DIGITAL MARKETING BOOK CLUB MEETUP #01:
PSYCHOGRAPHICS!Initiative by The University of Illinois at
Urbana-Champaign
A Summary presented by Zainab Ahmad
Hello and Welcome to the very first meetup of the digital
marketing book club! Were talking about Psychographics today! The
club is of course organized by the University of Illinois.1
Psychographics Are Just as Important for Marketers as
DemographicsArticle for Discussion. By Alexandra Samuel, from the
Harvard Business Review
https://hbr.org/2016/03/psychographics-are-just-as-important-for-marketers-as-demographics
As you know, today well discuss the article: Psychographics are
just as important for marketers as demographics. This piece was
written by Alexandra Samuel and published on the Harvard business
review.2
Your Presenter: Zainab Ahmad
Hubspot Certified Content MarketerCopywriterDigital Marketing
Strategist Certified NLP practitionerXeniaWordArt.comLoves kefir,
kettlebells and reading
My name is Zainab Ahmad; Im an inbound certified digital
marketing strategist and copywriter working as Xenia WordArt. Ive
also earned various marketing certifications and am licensed in
NLP.3
Format and Agenda
We have 30 minutesI will summarize the article for usDefinition
of psychographicsAnswers to some questions posted in the groupWell
pass the mic around to discuss Please click on to enable chatType a
number in the chat box for your turnWell summarize and concludeLets
start!
Welcome, and thank you for joining us!
Very glad you could join us. Nice to see you, Elizabeth Badrov
and Rehab Samy! Im good, hope you are both great, too.Now, for the
structure of this meeting: we have 30 minutes. So Ill quickly
summarize the article, discuss the definition of psychographics and
answer some of the questions that have been posted in the
group.After that, the floor is yours. Type a number from 1,
sequentially in the chat, and well pass the mic around in that
order.Can you hear me clearly? If everything is fine, then lets
start!4
Demographics vs. PsychographicsMarketers are used to thinking
and speaking indemographics: Slicing a market up by: age, gender,
ethnicity, income, location, employment statusand other broad
variables can help to understand the differences and commonalities
among customers.
Butpsychographics, which measure customers:
attitudes, needs, values, activities, personalities, interests,
lifestyles etc
rather than objective demographic criteria, can provide deep
insight that complements what we learn from demographics.+
Lets start off with a quote from the article, distinguishing
between demographics and psychographics:5
Demographics vs. Psychographics
+
Visually, we can see that the target market or population can be
sliced up or classified according to different criteria.
Demographics include basic objective data such as age, income and
location.Psychographics being more subjective deal with needs,
wants, attitudes and values.6
The Internet and Psychographic ProfilingThe internet has made
psychographics more important to marketers in 3 key ways:321
The author then discusses role widespread internet access has
played in making psychographics significant for us: The internet
has changed the relative importance of demographics and
psychographics to marketers in three key ways: by making
psychographics more actionable, by making psychographic differences
more important, and by making psychographic insight easier to
access.7
The Rise of the Internet:How significant is the internet for
marketing?Lets find out:
Is the author right? Lets have a quick look a the impact of the
internet on consumer lifestyles:8
Case Study: The Family Tech Market
demographicspsychographics
To illustrate, she shares her research into technology devices
marketed to families. What patterns do we see in their buying
habits?-Marketers have traditionally defined this market by
demographic characteristics such as the parents income, education
level, location and the ages of their children.-However, based on
the parents views on technology, the author identifies three
distinct psychographic segments within this market: enables,
mentors and limiters.9
The Reasons Parents buy Technology
Images copyright Alexandra Samuel and Noise to Signal
The crucial point the article makes is that *reasons* parents
buy tech gadgets for their families determines their purchasing
choices. This underlines the importance of understanding the why,
or psychographic data, as opposed to just the basic demographic
facts.10
Values, not Demographics Drive Purchase
Images copyright Alexandra Samuel and Noise to Signal
To illustrate the values and behaviors of parents in this
example, lets take a closer look at these three psychographic
market segments:Enablers value their children having a good time,
and give the children free access to technology gadgets so they can
have fun.Limiters place greater value on learning, and limit their
childrens screen time for anything else.Mentors balance learning
and fun for their children.11
Psychographic Segmentation and Targetingexecution1Social media
is an integral part of the consumer lifestyleInternet marketing
tools abound give us rich user data for psychographic profiling (as
we learnt from Kevin Hartman, in our web analytics course)Smarter
keyword targeting
Lets take a closer look at the three ways the internet has made
psychographics data important to us as marketers:First, this
information is now more actionable:As social media becomes a fact
of life for consumers, information about their buying habits and
the tools to study this data abound.We can now use our keywords in
a smarter way to target just the right market segment.12
Virtual Communities as a Source of Datarelevance
2
Easier to find like-minded soulsPeople spend more time engaging
with others around shared interestsEngagement spans geographic and
demographic boundariesOnline tribes help to consolidate
psychographic profilesDifferences and conflicts help marketers
identify core issues of importance
The second point the author makes is how relevant psychographic
data collection has become as people congregate around shared
interests online:13
Internet Research Tools Provide Insightroadmap3
Customer SurveysSales and Customer Service StaffFocus Groups and
Group InterviewsSocial ListeningSentiment AnalysisWeb
AnalyticsVirtual Community EngagementTools include:Google
TrendsBoard ReaderNielsens PRIZM
`Finally: a plethora of tools are now available to marketers to
enable them to obtain, analyse and gain insight from psychographic
information.14
What Do YOU Think??Do you use psychographics in your
marketing?What kind of parent are you: enabler, limiter or mentor?
Do you agree with Alexandras assessment?What other market segments
would benefit from psychographic data analysis?What are your
favorite tools?What are your most important sources of
psychographic data? Comment below!
Weve summarized the article: what was YOUR take on it? Do
comment.15
Answers to Your Questions
1. Manuel: What is more important for Digital Marketing:
psychographics or demographics?2. Peter: Why do big companies fail
in this present 21st century where Digital Marketing is the gateway
to cross borders and increase brand image and growth?3. Muhammad:
what factors makes psychographics targeting more specific for
digital marketers as compared to demographics?4. Elizabeth: How can
I determine the best ROI for my marketing dollars considering there
are so many tools to use?
Ill pass the mic to anyone who wants to talk; lets just answer a
few questions:Manuel, Muhammad and Peter all asked why
psychographics is more important than demographics.As so many
people asked about this, well explore this question next.Peter also
asked why big companies were failing: Why do big companies fail in
the 21st century where Digital Marketing is the gateway to cross
borders and increase brand image and growth?Peter: thats a very
good question: in terms of our current topic, there are two
answers:1. the playing field is now more even, so smaller companies
can compete and take market share from bigger companies.2. Bigger
companies have many processes and systems in place, which can make
it harder for them to respond to rapid changes in the market or
individual consumers.Elizabeth, you have made a lot of important
points: your main question is How can I determine the best ROI for
my marketing dollars considering there are so many tools to
use?Lets take this question up, too.16
What is Psychographics Segmentation?
Analysis of consumer lifestyles to create a detailed customer
profile or buyer persona. Business Dictionary.comThe study and
classification of people according to their attitudes, aspirations,
and other psychological criteria, especially in market research.
WikipediaA
First: lets define psychographics:
In other words, for a given consumer segment, well study their
activities, behaviors, interests, hobbies, opinions, attitudes,
values, beliefs, lifestyle and habits. These are also termed
AIO.The term has been around since the 1960s, as you can see from
the Graph. As weve seen earlier, the rise of the internet coincided
with the rise of psychographics.17
Demographics or Psychographics?Q
or
?
So, the first question was: which intel is most important for us
as marketers: Demographics or psychographics data and why? 18
Demographics or
Psychographics?ADEMOGRAPHICSPSYCHOGRAPHICSWhoWhyObjective
factsSubjective valuesAbout ConsumerExpressed by
ConsumerQuantitativeQualitative, fuzzyBasic CharacteristicsDeeper
Profile AnalysisPopulation CultureData easier to obtainData
elicited from consumer (surveys, listening)30% of Purchases:
Rational70% of Purchases: Emotional
``````
Lets study exactly how these two market segmentation approaches
view our target market:Demographics looks at who the lead is,
whereas psychographics looks at what why they do what they
doDemographics are objective facts about the consumer such as age,
gender, income level, location, employment and so on.
Psychographics, on the other hand, are subjective and expressed by
the customer, such as beliefs about the environment or animal
rights, attitudes towards conventional schooling and so on.So
demographics will be measurable and quantitative, or as Kevin
taught us in analyltics, more likely to be structured data. Yet
Psychographics data is qualitative and fuzzy. In web analytics
terms, this data is probably going to be unstructured. Important to
note: unstructured data usually comprises 80% of the data a web
analyst works with.Psychographics require digging deeper, and are
relatively harder to obtain than demographics.Importantly, most
purchases are made for emotional reasons: only 30% of the time do
we buy stuff for rational purposes. (Icecreams and ipads,
anyone?)
19
What Does that Look Like in Real Life?
Source:
http://coupsmart.com/blog/2015/01/13/why-psychographic-data-should-be-used-in-marketing-campaigns/
So what does this actually mean?20
Demographics and Psychographics Data
+=A
Which answers the question: which is more important for
marketers? Demographics or psychographics? The answer is
Both.21
Psychographics and Market Researchexisting customers as
influencers and evangelistsactivities, interests and opinions
(AIO)usage rate, loyaltyindustry, seniority, functional areabasic
population and geographic statistics Market research and
segmentation approaches complement each other to create a complete
buyer persona or customer profileSEGMENTATION MODELS
Market research and segmentation approaches complement each
other to create a complete buyer persona or customer profile
We had the traditional approach of identifying our prospects
based on geodemographicsBased on occupation One could further
classify prospects according to their industry, seniority and role
using firmographicsTo quantify brand loyalty we could use
behavioristic data to measure the usage of our products and
customer loyaltyAs weve learnt, we can approach our market in terms
of their activities, interests and opinions using psychographicsA
relatively recent phenomenon is to create a social graph to
identify our most loyal customers and engage with them directly to
get feedback as well as to involve them in influencing their
peers
There different segmentation models, used to manage this data:
these include Minerva, 4Cs, VALS, PRIZM, ACORN and STP.
22
Heres Another Way to Look at It
Source:
http://bhsmadden.weebly.com/uploads/2/2/3/0/22307756/396933_orig.gif
Another way of visualizing the relationship between demographics
and psychographics.23
Source
https://marketoonist.com/2003/06/the-market-research-zoo.html
in other words
Its all about classifying people for marketing objectives24
ROI: Best Use of My Marketing Dollars?
QMarketing is all about knowing your customers and the best way
to respond to them.Thats why marketerslovedata.Psychographics is
the greatest thing that ever happened to marketing in general and
conversion optimization in particular.Build a deep understanding of
your customer, or risk irrelevance.You can only effectively reach
your target audience when you understand both their demographics
and psychographics. The combination of both sets of data starts to
form your buyer persona.MashableJeremy SmithNeil PatelHubspot
Elizabeth had a really good question: what does all this mean
for the return on investment in marketing? Lets have a look at what
some of the more influential marketers have to say:Neil Patel says
BuildJeremy Smith is enthusiastic: PsychographicsHubspot makes it
clear: You canAnd Mashable tells marketers: Marketing
25
A
ROI: Best Use of My Marketing Dollars?
To market effectively marketers need to know their consumers
deeplyBusinesses that succeed are those that know their customers
bestBig companies that are not timely and responsive to their
buyers are at riskThe most cost effective way to maximize marketing
dollars is to make data acquisition an integral part of the
business process.Gain insight by using:Customer surveysFeedback
from client facing employees (sales and customer service
staff)Social media engagement, listening, sentiment analysis and
virtual communitiesFocus groups and group interviewsWeb
analyticsDigital marketing tools (many of which are inexpensive or
free)Extended CRM fields Conclusion
In conclusion:26
Lets Discuss!
the mic is yours
Thank you for listening: now its your turn. If youd like to
comment or ask a question, please type in the chat box.27
Thank You For Attending!What are your favorite market research
tools for psychographics? Comment below.DIGITAL MARKETING BOOK CLUB
MEETUP #01: PSYCHOGRAPHICS!All images created by Xenia WordArt or
have a creative commons license unless otherwise
creditedPresentation by Zainab Ahmad: www.xeniawordart.com
Initiative by The University of Illinois at Urbana-Champaign
Thank you for attending.
This wraps up our first digital marketing book club meeting on
psychographics, arranged by the University of Illinois and
presented by me, Zainab Ahmad.
Been a pleasure talking to you, and look forward to your
comments.28
