Increase Your Sales By Understanding Types of Psychographic Segmentation

You have probably heard that not everybody who visits your website is going to buy from you. A strategic marketer knows this and seeks to attract and sell to the people who are most likely to purchase.

Dividing more likely customers from less likely is called segmentation. Segmentation allows you to be more strategic with your marketing and better appeal to the diverse needs of potential customers.

Segmenting your visitors allows you to do several things:

• Customize your marketing messages to appeal to the unique needs of your website visitors
• Focus your ad buying on those who are truly the most likely to purchase
• Create products and services that appeal to different needs within your market
• Not waste your time and money on those who will probably never purchase from you

Ways of Segmenting Your Visitors

Marketers have traditionally sorted potential customers based on the following segmentation techniques:

• Demographics – age, gender, ethnicity, marital status, children, occupation, income, education, and so on
• Geographics – where someone lives

When you know demographic and geographic information about a person, it helps you better understand if they might truly be a good fit for your products and services. However, there are pros and cons of this type of segmentation.

Geographic data can tell you that a person living in New York is likely not looking for a dentist in Los Angeles. People living in rural Montana have a different set of concerns than people living in downtown Chicago.

Demographic data understands that people at different stages of life have different desires. A female college freshman is not likely going to be interested in the same kinds of real estate options that a 67 year old male financial professional may have.

Yet as you probably guessed, demographic insights aren’t perfect. While some of the needs of a female college freshman differ from the 67 year old male, some are the same. They are both probably interested in taking care of their teeth. They might both be interested in the same types of fitness. They might read similar books. They might both prefer healthy food options.

Marketers started to see the limitations of demographic and geographic data and understood there were other buying criteria at work inside a customer. Enter the discipline of pyschographic segmentation.

What is Psychographic Segmentation

Pyschographics is simply a way of trying to understand what is going on within the minds of customers that influence their decision to purchase or not purchase.

As Alisa Meridith explains, “Demographics explain ‘who’ your buyer is, while psychographics explain ‘why’ they buy.”

Think about the last significant purchase you made – say something above $1,000. Did you make that purchase because you are simply male or female? Did you make that purchase because of where you live? Or was there some other primary reason?

An Example – My Last Major Purchase, New Carpet

I’ll use my last major purchase as an example. My wife and I decide to replace about 60% of our current carpet. The total bill was around $5,500.

Why did we make that decision? Here were some of the driving factors:

• I hated looking at the carpet in our bedrooms, stairs, and hallway every day. It made the house look junky. It made me embarrassed at times to have guests over.
• A couple of us have allergies in the house. I was concerned that perhaps old carpet was contributing.
• I had put off the decision long enough. We had extra money from a tax refund so I didn’t have to tap into any savings or investments.
• I knew that buying a high quality carpet would last for years. Even though I don’t like to make big purchases, I could justify it due to how long the product would last. Buy once, cry once, but be happier every day looking at the new carpet.

As you might notice, most of these decisions were psychological in nature. Notice how traditional demographics and geographics did or didn’t factor into the decision:

• Gender – both my wife and I wanted the carpet. Both genders were equally represented in the decision.
• Age – I had been wanting the new carpet for 12 years. Perhaps I got tired of waiting. But I don’t think our age had much to do with the purchase.
• Ethnicity – If there is an ethnic reason why people buy carpet, I would like to hear it.
• Marital Status – Would I have wanted new carpet if I was single? Maybe I wouldn’t have cared as much. Maybe I would have lived in a different house and not have had as many guests over if I was single. Perhaps single men don’t buy new carpet that often. Maybe they do. I can’t tell you for sure. All I know is that my wife sure wasn’t pressuring me to buy new carpet, I was the primary mover behind this decision but in the end, we made it together.
• Children – Now I am sure the kids helped wear down the old carpet some but they weren’t really complaining about it. I was concerned that the old carpet was contributing to allergies however. And I did get satisfaction in putting new carpet in their bedrooms to give the kids something nicer to experience. Plus the new carpet pad cuts down on noise. So I would say the existence of kids did influence my buying decision.
• Occupation – I am self-employed and work from home. I see the carpet all the time. My occupation was an influential factor.
• Income – Even though I don’t like making purchases on diminishing assets, having enough money did help justify the purchase. However, I feel this decision was based more on personality traits than on actual income.
• Education – I guess being educated helped me a bit in the research process of buying the carpet but I am not sure whether having a couple of degrees really made an impact. In fact, I am sure it didn’t.

Demographics did play some role in my decision but there were many psychological factors at play as well as you probably noticed. Let’s take a look at a list of psychographic influences that affect purchasing decisions.

Types of Psychographic Segmentation

Psychographic segmentation has typically been defined by three major categories: Interests, Activities, and Opinions (often referred to by the acronym IAO variables).

For our purposes, we are going to branch out much wider than those three and list quite a few psychological factors without worrying about which larger categories they might fall under.

#1 Personality Traits and Types

There is a lot we could talk about under personality traits but lets just look at the standard 8 personality types that often get mixed and matched to form the 16 personality types (source: Myers-Briggs Foundation)

1. Introversion (I) – gets energy from time alone, less social, likes dealing with ideas and inner world
2. Extroversion (E) – gets energy from time with people and involvement in events and activities
3. Sensing (S) – focused on information gained from the five sense and the physical world
4. Intuitive (I) – abstract thinkers that are more focused on impressions and meaning and patterns of information, can “read between the lines”
5. Thinking (T) – looks for basic truths and principles, logical, looks at pros and cons
6. Feeling (F) – looks for what people care about, points of view, what’s best for people
7. Judging (J) – decisive, likes things under control, tends to be task oriented
8. Perceiving (P) – flexible and spontaneous, adapt to the world rather than control and organize it

Under the Myers-Briggs system, these personality traits are then combined to form the 16 personality types:ISTJ, ISFJ, INFJ, INTJ, ISTP, ISFP, INFP, INTP, ESTP, ESFP, ENFP, ENTP, ESTJ, ESFJ, ENFJ, ENTJ. A short description of each of these 16 types can be read here. You can also purchase in-depth reports on each of the personalities from 16Personalities.

So how do the personality traits and types affect your marketing and conversion efforts? Each of the personalities are going to using different buying criteria depending on what matters to them. They will absorb the information on your website based on their personal priorities and values.

For example, a logical thinker is going to be weighing the pros and cons of your offering, probably against other options in the marketplace. A feeling individual might be looking for testimonials or reviews from customers about how your product or service bettered their life or solved their problem. An introvert may want a detailed report or guide to read whereas an extrovert may want to pick up the phone and talk to real person.

Being aware of the different ways people are built will help you appeal to what’s important to them. You may realize that your product or service really only appeals to a few personality types leading you to focus on smaller market segments. This will help you craft more targeted marketing messages or include information that appeals to specific personality types.

#2 Lifestyle

Lifestyle is a very generic term that could include a lot of different factors. We’ll only list a couple here.

• Stage of life – includes how old a person is and what they are doing at the moment. A person in their early twenties may or my not be in college. They won’t have a lot of career experience. They may or may not be wanting to start a family. They may or may not be interested in a long term relationship. They may want to travel the world or they may want to start a career. Or they may not know.
• Rural vs. Urban vs. Suburban – At first, whether someone is rural or urban may look more like a geographic question. But in psychographic terms, this concerns the mentality of the person and how they see themselves. Does someone live in a rural setting and embrace a country lifestyle? Or do they live in a rural environment and not like it and can’t wait to escape for more excitement in the city? Is someone living in New York love the fast-paced lifestyle or are they secretly longing to escape for the quiet and slower paced suburbs? Only knowing where they live does not tell you anything about a person’s underlying thoughts about their living situation – whether they are satisfied with it or want a change.
• Freelancer, Entrepreneur, Corporate – A person’s job can often be an expression of lifestyle. The solo freelancer or entrepreneur who works wherever or whenever they want have a different set of concerns than someone that goes to work in a suit and tie in a skyscraper every day.

Again, those are only a few examples of what might fit under this category. If your product or service appeals to a particular lifestyle, don’t hide this in your marketing and advertising. Show how you can support that lifestyle and the needs and concerns that go along with it.

#3 Interests

Interests are another category that could include many different things. Interests can form the basis of niche and micro niche markets. Here are a few examples:

• Political activism – embrace certain causes passionately, may have an affinity for companies that support the same causes.
• Protecting children – customers with this interest may be willing to spend money on products and services to protect kids (alarm systems, emergency cell phones, etc.) or share product or service information with other parents with the same concerns.
• Pet care – some people are very passionate about taking care of their pets and treat them like others might a real person. They may be willing to spend great amounts of money to give their pet the best life they can.
• Environmentalism – committed environmentalists may make purchasing decisions based on a product’s impact on the environment or if a company supports environmental causes.
• Healthy cooking – someone passionate about healthy cooking may spend a lot of time searching for information or willing to pay for products that support healthy cooking but reduce labor time (take the Instapot craze for example).
• Technology – people can be interested in technology for various reasons: how tech can improve their lives, fascination at how it works, or desiring praise from friends for owning the latest tech.

Think about what interests your website visitors have that intersect with what you are trying to sell. If you can connect your product or service to an underlying interest, you have tapped into one more compelling reason someone may want to purchase.

For example, if you are selling an alarm system and you are emphasizing how it can help protect property from being stolen, yet your target market is more concerned about protecting people, you are missing the primary psychological driver for purchasing. But if you talk about the invaluable worth of a person’s life, suddenly that monthly monitoring charge for an alarm system doesn’t seem so high.

#4 Activities

Activities could include travel, sports, attending political rallies, church events, concerts, theater, and more. Understanding why someone engages in these activities can tell you a lot about them.

For example, someone who works out regularly may not want to be a competitive athlete. Instead, they may have a family history of heart disease and wish to do all they can to not increase their risk factors. In this case its fear, not pride in athletic ability or achievement, that may be the underlying driver of exercising.

If you were trying to sell to this person and you emphasized how your product will help them win an athletic contest, your marketing isn’t going to work as it isn’t connected to their underlying interest. However, if the product helped them work out more efficiently and reduced soreness after exercise which would allow them to work out more often and hit their health goals, you would have a greater chance of connecting with their underlying motivation for exercise. Your product moves from “irrelevant” to “relevant” in their minds. They may be willing to spend quite a bit of money to do what they can to avoid a dangerous disease.

#5 Values

Values are simply what people feel is most important in life and what is good or desirable. Values can be very strong drivers in purchasing decisions.

Examples of values:

• Hard work
• Honesty
• Honor – personal honor or honor toward a greater cause
• Loyalty
• Efficiency
• Dependability
• Using personal gifts and intelligence for societal good
• Business as a means to serve a greater mission
• Stewardship – Maintaining wise spending habits
• Compassion – financially supporting charitable organizations, volunteering time toward protecting the vulnerable
• Education as a means to better oneself, family, or society
• Public service

You may find that your product or organization naturally connects with the values held by your target audience. Instead of hiding your values, consider being upfront about them. If you created a product or service with a greater mission in mind beyond financial gain, tell your audience. Let them know why you are in business and what greater good you are trying to accomplish.

#6 Beliefs

Although some aspects of society put pressure on people to hide their beliefs, those beliefs still often influence purchasing decisions and what company a person chooses to do business with.

If someone has strong religious beliefs and wishes to protect their children from harmful content, they may invest in Internet filters or avoid certain subscription TV and movie services that don’t have adequate content controls.

Others may have strong beliefs about violence which may lead them to have certain views about firearms and the companies that sell them. Others may have beliefs that value personal protection and justified killing and may strongly support firearms and the 2nd Amendment. Some may have beliefs that tolerate some types of firearm ownership but not others.

Another example of beliefs guiding purchases is clothing. For some women who highly value modesty, certain types of clothing can be hard to find that adequately coincide with their convictions. Others may have different standards that allow them to wear a wider variety of clothing.

Instead of ignoring these beliefs, a strategic marketer recognizes their influence over the potential customer and seeks to understand them as much as possible.

#7 Habits

So much of our daily life revolve around habits – when we wake up, exercise, eat food, watch TV, surf the Internet, etc. Habits are also powerful drivers of human behavior.

For example, if a marketer knows that a potential customer tends to make purchases online in the evenings after dinner on weekdays, he will send his email offers at that time and avoid sending them on weekend mornings where they are less likely to be seen and acted upon.

If a theater chain knows that a certain percentage of their customers always buy popcorn and a drink when they go to a movie but are also concerned with expense, they may offer a substantial membership discount that lessens the price but encourages viewing frequency.

Some people may want to break bad habits and are willing to pay money for products and services that may help. Some may have started a new dieting habit and are willing to pay for app that helps them sustain their new behavior.

#8 Opinions

Knowing what opinions your potential customer holds can be a significant advantage to your sales efforts.

For example, a woman may believe she looks better in blue dresses than red. She may favor chocolate ice cream over vanilla 90% of the time. She may think that eating out should be avoided as much as possible. She may only shop at a certain grocery store given their commitment to healthy food options. She may believe that public schools will not do as good of a job educating her children than a private option.

Notice how all those opinions affect purchasing decisions. Opinions often help people narrow their choices. Their opinions may be completely rational or irrational. It doesn’t matter. They are what they are and they are influencing decision making all the time.

Opinions may be easier for a marketer to influence than beliefs. Educating a customer thoroughly may help them alter their opinions to be more open to buying your product. Offering a no-risk guarantee may encourage that woman to try a red dress and see if in fact it may make her look good after all. A restaurant may be able to convince customers that their healthy line of foods means that they are now a viable eating out option.

On the other hand, your product may enforce existing opinions. You may provide study materials to parents who believe in home schooling. You help people cook great food instead of eating out. You may provide customized beauty products matched toward certain skin and hair tones.

If you don’t know a person’s opinions about something, you can’t be sure whether you should enforce them or seek to persuade them to think differently.

#9 Hobbies

Some people spend a lot of money on their hobbies. Quilting and sewing, crafts, car restoration, gardening, yacht racing, and mountain climbing are all lucrative industries.

Think about how your product or service might support a hobby a group of people are passionate about and are already spending money on. You might realize their is an untapped market that you might be overlooking.

#10 Social Status

Maintaining or improving social status can be a strong motivation for some people. Some like to show off their wealth. Some would rather hide it. Some believe that showing any kind of wealth might alienate them or breed resentment from their current social circle. Some believe that in order to fit in, they need to drive a certain kind of car or wear certain clothes.

If you want to understand how social status affects advertising, look at the car industry. Go view advertisements for different kinds of cars, trucks, SUVs, and minivans in different price ranges. Notice what kinds of people and situations are included in the advertising. Much of it revolves around social status.

#11 Occasions

Your product or service may connect with people who are buying for a particular occasion. Would your product make a good wedding gift? Might it help enhance a summer travel experience? Would it be a gift for a graduate or suitable to commemorate a promotion?

People purchase things based on occasions and events. Take advantage of this to open up a new angle for your marketing.

#12 Company Perception

A potential customer may be influenced by how they perceive a certain company.

For example, I refused to shop at Walmart for many years because I believed the company was hurting American small business owners. I also won’t do business with a certain domain registrar because of the type of advertising they typically engage in.

Think about how your potential customers perceive you. Are you viewed as trustworthy? Competent? High class? Budget? Honest? Greedy? Be aware of how your marketing and business decisions affect buyer perception.

#13 Brand Loyalty

Brand loyalty is similar to company perception. Some people shop at certain places because they have come to trust a company to meet their needs or give them happiness.

There are Coke people and Pepsi people. Some love Nike and some prefer Addidas. Maybe its the logo or the image associated with the company. Maybe it is how driving a Lexus makes people feel about themselves and how they think others view them.

Perhaps one brand reinforces their social status. Another brand might be preferred by a group of hobbyists due to how well that company serves that industry and the reputation they have earned over time.

How to Get Psychographic Data

Because psychographic elements are part of the inner hidden world of the individual, it is harder data to get than geographic or demographic data. However, it isn’t impossible.

Facebook Insights

Consider Facebook. At its core, Facebook is a psychographic data mining operation. It exists to know its users at a deeper level than anything that has come before it for the purpose of marketing and advertising. Facebook asks its users directly what they are interested in along with the typical geographic and demographic data. They also know a lot about you based on what links you share and what you like.

Facebook offers advertisers a powerful tool called Facebook IQ Insights which aggregates user information based on traditional demographic and location data along with psychographic data like interests and behavior. You can take advantage of this tool to target markets with psychographic data that best match those who are most likely to buy from you.

Personal Interviews

If you want to know more about your customers, set up an interview and talk to them. Some people are more than happy to tell you about themselves and what they think of your company and products and why they buy or don’t buy.

Surveys

Surveys allow you to essentially interview a larger number of people online and easy collect and sort the data. Surveys make it easy to segment leads based on their responses.

Social Media Listening

A great way to research a target market is to see what they are saying online. Forums, Facebook groups, and chat groups are all ways you can get a better understanding of what a target market cares about, how they view products and companies, and needs that are not being adequately addressed.

Conclusion

Psychographic segmentation is an exciting yet challenging discipline for a marketer. Yet the more you learn to think in psychographic terms, the more your marketing and sales efforts will benefit as you connect with people’s core desires that influence their purchasing decisions.