The ultimate guide to psychographic segmentation

Recognition and interest in the lesser-known practice of psychographics is growing. Marketers are used to using demographics to segment a market by factors like gender, ethnicity, and age, but psychographics is an entirely different way to think about the differences and similarities among customers. 

Psychographics—the classification of customers based on their values, interests, and attitudes—has become increasingly relevant with globalization and the expansion of the internet.

For example, when a company expands its reach to global audiences, it interacts with a wider range of viewpoints and personalities. Crafting messages around certain psychographic segments is useful for appealing to specific personality qualities.

This article will explain how psychographic segmentation works and how you can use it for precision-targeted messaging.

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Psychographic segmentation is a technique for dividing audiences into different market segments based on psychological criteria. These include personality traits, internal motivations, and other largely subjective qualities.

In business and marketing, psychographic research and segmentation is driven by a desire to know what motivates the buying habits of different groups and how this is shaped by wider personality and behavioral factors.

Psychographic qualities are often deeply ingrained in the psychology of different audiences, making psychographic segmentation an effective way to establish stronger customer–brand relationships in different groups.

Demographic segmentation vs. psychographic segmentation

Demographic and psychographic segmentation are somewhat similar as they are both forms of market segmentation. However, psychographics is more concerned with a group’s intrinsic (unobservable) qualities rather than its extrinsic (observable) qualities.

That said, psychographic data can and should be measured despite its inherent subjectivity. By comparison, demographic data is usually easier to gather and measure, with little to no room for interpretation.

Psychographic segmentation is important when you have, for example, a specific message or business objective that requires you to precisely understand and target people who think, feel, or act a particular way. In contrast, demographic segmentation divides groups according to more concrete metrics, such as age, location, and population size.

Some psychographic segmentation categories overlap with parallel demographic categories. For example, those in a given profession are more likely to fall within the same socioeconomic status, and age groups within a geographic boundary likely have similar entertainment preferences.

Psychographic factors can take much longer to establish and become firmly rooted. These aren’t always trends or “signs of the times”—although psychographic segments can be developed from casually held beliefs and fleeting trends. For this reason, psychographic segments are often a complex blend of deeply held convictions and temporal beliefs and choices.

Psychographics are based more on people’s subjective interpretations and experiences, but you still need to measure them before applying them to market segmentation.

The psychographic categories you use should link to the product category, topic, or area you want to understand. However, generally, a lot of psychographic research revolves around exploring and understanding the following categories:

• Opinions

• Values

• Beliefs

• Interests

• Social status

• Personality traits

Psychographic segmentation examples

The following are examples of realistic psychographic segments you might analyze:

• Favorite pastimes (sports, hobbies, video games, outdoor activities)

• Social activities

• Buying habits

• Club memberships

• Brand loyalty

• Attitudes toward current events

• Political beliefs

• Informal yet strong identities (e.g., dog or cat owners)

Psychographic segmentation can significantly improve your social and market intelligence and help you adjust your marketing and communication efforts accordingly.

Your primary focus should be how psychographic data translates to a group’s primary motivations and behaviors. Why do some groups gravitate toward one attitude or lifestyle over another? What’s the relationship between lifestyle, belief systems, and behavior?

Consider how psychographic segmentation helps you achieve your specific aims. You’ll need to think backward from your goals. First, determine which groups will help you achieve your goals and, secondly, which would benefit from this.

The following are some common goals you can achieve by developing psychographic segmentation alongside effective targeting and engagement strategies:

• Driving sales

• Increasing customer buy-in

• Fulfilling stakeholder goals

• Improving products, services, or processes

• Honing a message for greater appeal (among a specific target audience)

• Defining your target market

• Identifying what your target audience wants and needs

If you or your organization don’t yet have clear, specific research goals, it’s okay to leave room for adjustment or realignment in the future. Simply learning more about the groups relevant to your industry can guide and clarify your ambitions.

The most important thing is to gauge how your products and services appeal to your target audience. Psychographic segmentation can also help prove or disprove who your ideal customer really is.

Judging the value of psychographic segmentation can be hard as it also depends on your market segmentation strategy. As digital marketing trends change, what worked before may need adjusting to work now.

That said, the following are some possible benefits of well-developed and applied psychographic segmentation:

• Provides deeper insight into a target audience

• Allows greater fine-tuning of personalized messaging

• Increases the precision and effectiveness of marketing campaigns

• Helps organizations anticipate a group’s future needs

• Improves product development

• Makes a market segment feel valued

• Enhances the customer-brand relationship

• Establishes a more accurate customer persona

• Directs resources more efficiently

These advantages aren’t without certain drawbacks. To some extent, psychographic segmentation carries costs and risks:

• A narrower focus on certain groups may come at the expense of other, more important groups.

• You might create division between groups, especially if segmentation is obvious.

• It runs the risk of stereotyping, causing you to lose the very nuance you sought.

• You might have a reduced view of the “bigger picture.”

• Some groups may dislike feeling psychoanalyzed (especially on sensitive topics).

This last segment may put up some resistance to hyper-personalization. While it has its use, poorly applied psychographic segmentation can sour relationships (and brand image). This is because it touches directly on deeply rooted belief systems, ideals, and personal identities.

When is it best to use psychographic data?

The dividing line for when (and when not to) use psychographic segmentation is likely the same as for any personalized marketing strategy.

Even if the information is publicly available, how would the group in question feel about being scrutinized? What are the chances of damaging your brand’s reputation? If your interests are strongly at odds with those of the group, it’s murky territory at best.

Data acquired through genuine, positive exchange—such as direct customer feedback—generally has the greatest long-term value for building brand relationships. In any case, since Google is no longer supporting third-party cookies, companies must lean on more robust first-party data.

Compared to demographic data, psychographic data is more inherently personal and tied to the individual. However, the internet and the rise of ecommerce have made psychographic data collection, analysis, and application much easier—you just need to know where to look.

Directing marketing and other outreach efforts toward specific groups has never been easier. Automated marketing software places this ability in the hands of very small teams and even individuals. The most important thing, though, is to consider the rationale for why you are focusing on a particular psychographic segment.

Start by asking who your target audience is and why you want to reach them. Consider what you don’t know about them but wish you did.

How to find psychographic data

First things first, you need to collect raw data.

Like demographics, information about a group comes from a blend of participatory and non-participatory data sources. However, the difference is that psychographic data is rarely routinely published—at least, not in conventional ways.

You’ll need to look for information reflecting shared interests, values, beliefs, and opinions, which may or may not already revolve around a group or segment. The difficulty lies in the fact that most psychographic data originates in people’s hearts and minds.

Hobbies are one type of psychographic data that’s easy to find. This is because the motivation behind them usually drives hobbyists to share their experiences. Outward behavior is easier to detect.

There are many data collection methods, but the following are often reliable resources for psychographic data:

• Surveys

• Reviews

• Interviews

• Pre-existing studies

• Ethnographic research

• Third-party reporting organizations

Consider internet traffic in relation to psychographic data. Much of it is a cross-section of values, interests, and beliefs shared by like-minded peers who self-select into niche groups—almost the definition of psychographic segmentation. Web communities are essentially a form of psychographic segmentation in action.

Whatever data sources you rely on, consider using automated data collection tools wherever possible. Less time spent collecting and parsing data means more time to apply it. Numerous customer relationship management (CRM) platforms, email/SMS marketing platforms, and research platforms streamline the data collection process.

A polished qualitative research platform is highly adapted to psychographic data because it allows users to tag and categorize data for easy, intuitive access. It will also consolidate and contextualize your psychographic segmentation data with other market research.

For developers, there are even more sophisticated data-collection tools, including the following:

• Application programming interfaces (APIs) that access external databases and import them into your own

• Web scraping tools, which collect various types of data from websites (usually with a wide net)

• Data mining tools for extracting specific kinds of data from larger datasets using algorithms

Unify your data-collection efforts around a single streamlined environment before collecting data. This can prevent the likelihood of time-consuming data silos and data sanitation issues. It also reduces the chance of mistakes (like sending a targeted message to the wrong group).

How to collect psychographic segmentation data with surveys

Surveys are particularly useful for collecting psychographic data for two reasons:

1. Organizations can cut through the noise and ask relevant questions.

2. Customers can provide information that’s hard or impossible for researchers to find elsewhere.

Your survey collection efforts may already be psychographic if you include open-ended questions, as these invite opinions. You’ll want to shape your survey questions around the key psychographic categories that are most important to you.

How to segment your psychographic data

Now it’s time to start categorizing your hard-won data. You’ll need to search for commonalities and shared sentiments—or at least where those sentiments relate to the same topic.

For instance, you could categorize a single data point as relevant to a hobby, opinion, and behavior. Each data point may fulfill multiple purposes, so it’s essential that your research platform supports assigning data in multiple places without causing redundancy.

Rather than endlessly copying and pasting things in multiple places (which quickly gets confusing), use a dedicated research platform with a sophisticated labeling system. Collaboration tools further simplify segmentation, especially for large research teams.

You could also consider applying psychographic data to market segmentation as it comes in. This won’t just keep your memory fresh; it can also detect flaws in your early data collection efforts. You can then adjust your approach before amassing larger volumes of data that would otherwise require resource-intensive sanitation efforts.

Rather than segmenting a group according to hobbies, behaviors, or personality traits, lifestyle segments are a blend of all three. Lifestyle is also more deeply ingrained; it’s unlikely to change as frequently as a single activity or interest.

As such, lifestyle insights provide a broader view of a psychographic segment. Rather than looking at each opinion or personality trait, lifestyle can provide a more telling description of how someone leads their life.

Social class can be a tricky segment. Defining the boundaries between one class and another can be challenging.

It’s a psychographic segment that’s easier to grasp using an obvious example: rich or poor. You can leave the division open to debate. For instance, what social class marks cash-strapped young professionals in a high-paying field with high tuition loans?

When the dividing line between psychographic segments is hard to define, it’s often best to use more clarifying language (for example, “people making six figures without debt”). This also highlights the importance of using multiple overlapping segments.

Practically any product uses psychographic segmentation, whether deliberate or not. For instance:

• Toy companies know they need to market products to children (a demographic). Psychographic segmentation comes into play when a toy appeals to children with certain personality traits.

• Boutique retailers and fashion designers use psychographic segmentation to promote high-end products. They might appeal to the desire for fashion-forward style, then further to specific lifestyles within a socioeconomic class.

• Apple is a strong example of psychographic segmentation in action. Tech enthusiasts already comprise a psychographic segment, of which Apple users are a smaller subset—but Apple takes it further by developing products around specific hobbies and lifestyles. For instance, some computers appeal more to young gamers, while another line provides busy professionals with more business-appropriate tools.