Demographics vs. Psychographics in Audience Segmentation

By Indeed Editorial Team

Published April 26, 2021

Demographics and psychographics are both important in marketing, as they allow you to better understand your target consumer and tailor your marketing strategy. Marketing professionals can best use these two forms of audience segmentation collaboratively to create marketing campaigns. If you're interested in researching and understanding your consumers, learning about demographics and psychographics can improve your marketing. In this article, we define demographics and psychographics, list examples of each and provide key differences between the two.

Related: Demographics: Definition and How It Is Used

What is audience segmentation?

Audience segmentation is a marketing strategy that functions by identifying subgroups within your target audience so you can market specifically to them. By using audience segmentation, you can understand your consumer and brand in a way that appeals to your target consumer. There are many types of audience segmentation, including segmentation that uses demographics and segmentation that uses psychographics.

Audience segmentation is important for correctly identifying target audiences and accurately appealing to potential customers. Marketers use audience segmentation to decide whether to market to certain subgroups or to market differently based on the subgroup they're appealing to. By using data to make these decisions, marketers can save their campaigns both money and effort.

Related: What Is Market Segmentation?

What are demographics?

Demographics are statistical data that categorize and group the population by identifying different variables and subgroups. Professionals define demographic data based on aspects of a consumer such as gender, age, marital status, parental status, health and financial status. Marketers use demographic data to create subgroups of the population they wish to market to based on those features. Demographic data is a foundation for audience segmentation in marketing.

You can find demographics by using the US Census or by using website analysis to see the common features of the people visiting your website. You may use this data to create a beginning draft of the aspects your target audience typically has. This allows you to define subgroups and further investigate their psychographic data to refine your marketing strategy.

Related: 12 Marketing Tips for Your Marketing Campaign

What are psychographics?

Psychographics are data that collect and categorize the population by using IAO (interests, activities and opinions) characteristics. Psychographic data focuses on the characteristics people can usually control, like values, lifestyle, needs, wants, concerns, hobbies, spending habits and attitude. Psychographics focuses on understanding the comprehensive personality of your consumer.

Psychographic audience segmentation is a more targeted and detailed way of understanding your target audience. You can gather psychographic information by interviewing your existing clients. Consider asking them what they like to do with their weekend, what kind of entertainment they enjoy, what their travel plans are and if they have any long-term goals they're working on.

Other than interviewing, you may also send out surveys or questionnaires, invest in social media analytics and look at your website analytics. When looking at your website analytics, you might focus on if a customer shops a sale or uses a discount code and what comments they're leaving on your site. You can use psychographic data to better understand which social media site your customer uses most and focus your advertising funds on marketing there.

Demographics vs. psychographics

Skilled marketers use both of these fundamentally different audience segmentation methods simultaneously to produce effective marketing campaigns. Here are some ways these methods compare and contrast to each other:

Accessibilty

Though marketers tend to use demographic segmentation more often than psychographic, it doesn't allow you to recognize the atypical behavior that might take place within certain subgroups.

Demographic data is usually easier to obtain and implement than psychographic data, but psychographic data is usually far more effective than demographic data, especially for marketing on an individual level.

Purpose

Demographic data is quantitative, while psychographic data is qualitative. That means the demographic data can tell you who a consumer is, while psychographics tells you why someone makes a purchase. By using both kinds of data, you have a comprehensive understanding of who your consumer is and what leads them to make a purchase.

Application

A marketer can use demographic data to create a rough draft of their target audience, then add psychographic data to refine the notion and present a polished target consumer. In some marketing campaigns, demographic data can be used to attract an initial audience, while psychographic data can convince them to buy into the brand and follow through with a purchase.

Related: The Marketing MIX: The Art of Using the 4 PS of Marketing

Example of using demographics and psychographics in marketing

Using both demographic data and psychographic data can make your marketing campaign more effective and ultimately lead to an increase in sales or proficiency. Let's say, for example, that you sell a quilting goods box that ships out monthly. You've already determined through demographic data analysis that your target audience is women between the ages of 35 and 65, and your social media advertising plan is to target ads for your subscription box on a prominent social media platform.

A few months into the ad campaign you realize your sales and website visits aren't going up, so you decide to gather some psychographics. You send out a survey to your current customers covering their interests, how they spend their time, how they feel about social media and which social media platform they like best.

When you get the results, you realize you've been targeting your advertisements on the wrong social media platform for your target audience. By using psychographics and demographics together, you're able to better understand who your target consumer is. You can use the data to tailor your marketing campaign to them and boost your reach and sales opportunities.

Here are some other examples of demographics and psychographics in marketing:

  • A small boutique surveys their customers and finds that most of them prefer texting to mail. The boutique manager sends discount codes and sales alerts through texts rather than mail and boosts profits.

  • The manager of a dentist's office looks into the demographics and psychographics of their customer base and realizes most of their patients are children who exhibit a fear of appointments at their clinic. By modifying the marketing campaign to use bright colors and make it fun, appointment retention increases by 20%.

  • A local restaurant wants to increase their sales during the weekend, so they speak with some of their regulars and discover that a majority of their patrons enjoy watching sports, but the local restaurant never puts them on. They run a campaign advertising that they'll be showing the game and offering free wings and their weekend sales double.

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