Learn More About Demographic Segmentation
Business owners always look for an advantage in marketing products and services so they can gain more revenue and their profit margin will rise. Demographics are the main factor in achieving that advantage. Demographics refers to people or group statistical analysis. The important thing is that business owners let them find people who belong to the category of an ideal customer. Look for those who need what you are offering, and you have more success in using demographics so you can sell to them. Know the value of different demographic group segments.
Demographic segmentation is important, but you must know why so you will know how to use it to your advantage.
Market segmentation divides customers into groups based on their similar characteristics. Demographic segmentation is a segmentation strategy that is the most common, conventional, and basic. The groupings of this segmentation are based on a specific statistical data about populations that include variables like age, household size, gender, income, marital status, education level, income, ethnicity, and occupation.
Other frequently used demographics include the following:
- Geographic: Customers are categorized based on their region, location, climate, population density, and if they live in a suburban, rural, or urban area.
- Psychographic: Psychographic segmentation may be the most challenging form because the characteristics they base it on are not always available. It is about the emotional and psychological qualities of a person which includes interests, lifestyle, opinions, values, and personality traits.
- Behavioural: Customers can be identified based on their purchasing behaviour and outline. Behavioural characteristics are the previous purchases, web page views, payment methods used, shipping, participation in the reward program, and product returns.
There is no limit to the characteristics that can be used to divide the market. The characteristics you choose to segment customers is based on data availability. And you must limit the characteristics that you pick for customer profiles to the ones that are sensible for your business.
How to Acquire Demographic Data
It is fine if you are not able to get the demographic data of all your customers or audience members. You could still have enough data from people that you can use to build a customer profile. Therefore, you can use the pick the social media platforms, create an improved marketing material, your customer base will quickly grow. Further, you can enlist assistance from Singapore marketing experts to save you time and energy.
There are different methods of unlocking information, and here are the two most common ones:
If you own a website, then you use analytics software so you can understand those who visit and what they like.
Most of the analytics software lets you see basic demographic information such as age and gender. You can go to your analytics software account to check if it is gathering information. You can use a Google Analytics (GA) tool that adds to your current solution.
GA gives you information about the age and gender of a group in your audience.
You only must log into your GA account, click on the audience, then demographics, and overview. In case you are unable to access this part of your account prior to that, then you would have to activate it and check again in 24 hours.
Surveys and Quizzes
Quizzes and surveys give you a way to ask audience members direct questions. When the answers you received are enough, you can feel safe about knowing that it represents most of your audience segments.
The difference between a survey and quiz is that people want results from quizzes. You cannot just ask demographic questions and that’s it.
You can include a couple of demographic questions that are calculated to improve engagement and give a higher response and completion rate compared to surveys.
Surveys let you ask demographic questions directly but there is a much lower engagement rate. Averagely, external survey completion is below 20%. If you require more data, quizzes and surveys are the best options.
Analytics makes it easy for you to gather a lot of data.
Why is Demographic Segmentation Important?
- You can build long-lasting relationships with customers – Reaching customers on a level that is more human using demographic-based personalization marketing creates deep customer loyalty. It lets them identify your brand and make you feel like being an advocate for what they need. This makes them want to do business with you for a long time.
- Your product and service improve – Loyal customer relationships encourages you to check your products and services differently. If you have a deep understanding of your target audience, you can serve them better by putting yourself in their shoes. If you produce start programs and know that most of your audience prefers the same programs, you will go in that direction.
- Optimize the strategies of marketing – Demographic segmentation lets you build more specific marketing strategies. It is helpful in clarifying visions, gain more direction with the future of advertising plans, and optimize resources, budget, and time.
Its Importance to Marketing
Generational – It is critical to understand which generation belongs to your target market. For instance, the buying habits of baby boomers are different from the millennials and X-Generation. Aside from having different ways of buying, they are also not the same when it comes to speaking about several ways of buying. If you are not targeting millennials online, you are unable to capture the greatest demographic potential.
Ethnicity – People who are not in the same culture have varying tastes and buying habits that come from one another. For instance, if the remodelling contractor widens his business to where it can be accepted to negotiate everything they buy, the contractor must prepare to make sales. This could change his pricing to make sure he has a client and earn a profit. It is important that we understand and respect several holidays and culture of certain ethnic demographics.
Niche – All parts of demographics have a foundation, and a lot of businesses use contemporary technology through social media. They also use online analytics programs to target demographics in a specific niche. One example is married couples who have dogs and no kids. These people have more tendency to spend their money on the dog like it was their child. This target market is good for pet services.
Where Can You Find Demographic Data
An advantage of market segmentation and demographic lines is the readiness of information.
The resources could include:
- Your market research – Collect information from your customers through questionnaires and surveys like what was mentioned above.
- Aggregated data sets – Different companies are selling bundles of market data that they collect and aggregate from varied resources.
- Data sources from US governments – You can have useful demographic information according to zip codes. The popular resources are the Bureau of Labor Statistics and the Census Bureau. For instance, there is sex, age, ethnicity, and race that is in the neighbourhood level from the current census records.
- Local governments – The majority of cities are tracking the demographic data of residents. You can check local resources so you can see if the databases can be accessed publicly.
What are the Limitations of Demographic Segmentation?
Since demographic segmentation is focused on the characteristics that do not have an actual basis of behaviours, you will find limitations. Demographic segmentation must be combined with multiple demographics or with other kinds of segmentation.
For instance, if the segment is only based on your age, you are going to realize that it is too broad and you cannot use it. Other variables such as income provide a target market that is more useful. Use different kinds of segmentation in order to create customer profiles. For instance, if you are going to sell mattresses, the needs of an attorney who lives in a city alone might not be the same from what a cashier who lives in the suburbs.
Market segmentation based on basic characteristics is useful because segments normally have the same interests and needs. However, you must be careful not to have stereotypes.
Demographic segmentation is very important in market research especially if you want to improve your business and profits.