Both demographic and psychographic information plays a vital role in market research and digital marketing. They both offer insights into the customer and, also, are fundamental inputs to a business’s digital marketing strategy. The ability to mine demographic, as well as psychographic information, has given rise to the Long-Tail Economy.
What is the long tail economy?
Our economy has changed from consisting of a few mass markets to countless of small niche markets. Technology – such as the Internet as well as sophisticated search engines – has made it much simpler for consumers to find as well as buy bespoke products. Moreover, ‘microtargeting’ – which is defined as the ability to filter prospects by demographic, psychographic, and even by their behaviour – has allowed businesses to focus their digital marketing efforts on potential buyers who are very likely to be absorbed in what the particular company has to offer.
The term ‘Long-Tail Economy’ is defined as the ability of digital marketing to reach a small, however highly engaged, and passionate target market or customer segment with a customised product or service. The Long-Tail Economy hangs on the theory that our culture and economy is increasingly shifting away from an emphasis on a relatively small number of mainstream products and markets, at the top of the demand curve on the way to a vast number of niche products in the tail.
What does ‘demographics’ mean?
Demographic information tends to emphasise external or physical factors such as age, ethnicity, gender and location. This type of data allows you to understand better certain background characteristics of your target audience. By posing demographic questions in surveys, it is possible for you to gather demographic information about current as well as potential customers and, in turn, help you design a market segmentation strategy to reach the right clients.
Demographic questions are any question(s), the goal of which is to better understand the identity of a particular respondent. Demographic surveys (in other words surveys which use demographic questions) look for basic information about respondents. This information allows the survey designer to understand where each person fits in the general population.
What does ‘psychographics’ mean?
The term ‘psychographics’ refers to the study of a consumer’s not-so-visible characteristics. These facets are, for example, their interests, activities, opinions, lifestyle as well as attitude.
In determining what the psychographic characteristics of a particular audience are, qualitative data is highly valuable. Through this, you discover the real motivation behind why people love, in addition to advocating for, number of brands. With this data in mind, it is possible to alter your messaging to bridge the gap between you and your customers. With getting to know the psychographic factors of your audience members, it will be possible for you to forge a much deeper connection with them and generate that elusive sense of audience engagement. If you treat your clients as individuals, with a distinct personality and not as a number, by emphasising their inner drives, their problems and what will help them, you develop into something relevant and increase chances of conversion.
What are the pros and cons of demographic segmentation?
Demographic variables are typically easier to collect and measure versus those involved with psychographic segmentation techniques. Targeting generally is more straightforward when you use demographics as a metric, e..g it is possible to target a consumer group such as university-educated millennials or men between the ages of 35 and 45.
With demographic variables, consumer profiles are easy to understand across the board. This lends itself to a more straightforward strategy-development process in terms of internal collaboration between departments of your company.
The downside of demographic segmentation is that similar demographics do not always imply related needs, values or motivations within a particular demographic group. The effectiveness of your digital marketing message may be hampered by a “one-size-fits-all” approach to the individuals within a specific demographic segment.
Skewed or problematic demographic data that occurs within a given region can produce unreliable assumptions. This potentially reduces the accuracy of your digital marketing message and methods.
What are the pros and cons of psychographic segmentation?
As stated previously, psychographic segmentation provides an awareness of the motivations behind consumer behaviour. This gives digital marketers a more precise picture of what makes their potential customer “tick.” It is easier for brands to identify the underlying motives and needs of their target audience which enables them to customise more compelling digital marketing messages. Psychographic segmentation offers a better overall understanding of the consumer, which enables brands to execute effective emotive digital marketing to highly responsive segments.
It has traditionally been more challenging to obtain psychographic data as opposed to other data collection methods. It can be challenging to get data for clients in a given population because participation in a psychographic survey is usually required. However, psychographic segments can be statistically projected across a population with predictive modelling although the accuracy of segment assignments will be significantly less than with a prospective survey.
Clear rules regarding the interpretation of data must be put in place to ensure that the approach is consistent among the individuals or departments which engage in customer segmentation analysis.
Although marketing has all but gone digital, fundamental traditional principles of marketing are still very relevant.
If you have a small business and don’t know much about marketing or digital marketing, we highly recommend that you go on a digital marketing course to find out how you can bring your company’s messaging into the digital age.
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