The importance of Psychographic Data in marketing campaigns.

Upon completing the Inbound Marketing Course in partnership with The MarTech Lab, a key phrase stood out. “All great inbound marketers have a profound understanding of their audiences’ aspirations and work tirelessly to help.” As a psychology student this resonated with me, as my amateur prior assumption would be that inbound marketers were primarily interested in the demographic data of potential customers, however it is actually psychographic data that is key to their success. According to CB Insights, a 2009 experiment found that psychographic informed behavioural marketing increased click rates by 670% (“What is psychographics,” 2020). So, this blog post will attempt to give an understanding of psychographic data and its advantages.

Demographics are objective attributes such as age, income, and geographical location, which provide information about who your buyer is. Whereas Psychographics are the subjective psychological and cognitive attributes of a consumer that reveal their beliefs, values, and goals (Meredith, 2021), which provide understanding as to why they buy.

A combination of demographic and psychographic data gives inbound marketers insight into potential buyer personas, and recognising both allows improved segmentation of customers to ensure a campaign is targeted to the appropriate audience. Importantly, customers who fall into the same demographic groups may not fall into the same psychographic group! Obtaining psychographic data requires more time and effort on the part of an inbound marketer than demographic, but the rewards of the insight provided can be invaluable.

Key methods of acquiring this data includes:

• Conducting Interviews and Focus groups with existing customers.
• Examining website analytics (e.g., Google analytics).
• Gather data from market research firms.
• Surveys/questionnaires/quizzes
• Social media (i.e., likes, clicks, tweets, posts)

So, how can you discover what your target buyer is like? Whether they research a product extensively before buying it, or do they like to try something new? “Knowing the personality traits of your target buyer can help you write verbiage that appeals to them specifically (Meredith, 2021).” In psychology, personality traits are often considered key predictors of behaviour (Paunonen & Ashton, 2001).

Upon conducting a meta-analysis, Azucar et al. (2018) discovered the Big 5 personality traits can be extrapolated from social media digital footprints, and that the traits identified can be remarkably accurate predictors of behaviours. The authors convey that obtaining the data via this medium is less time consuming and obtrusive to the consumer than the traditional, self-reported, psychometric test. They believe that identifying the Big 5 traits can potentially enhance marketing as it leads to better profiling of customers and the ability to tailor marketing materials. Importantly they also state that “accuracy improves when analyses include demographics and multiple types of digital footprints (Azucar et al., 2018, p150.).”

Psych lexical studies have demonstrated that people’s word choices are influenced by their personality traits, and therefore text-bases datasets are markedly helpful. For example, Cambridge Analytica (a political consulting firm) found that neurotic personality types use terms such as “actually” and “apparently” frequently. IBM have been compiling Linguistic Inquiry and Word Count (LIWC), a psycholinguistic which utilises Twitter as its data set.

According to CB Insights, IBM has used this data set to train it’s Artificial Intelligence (AI) engine, and program further refined “algorithms” to sort and retrieve psychographic information from emails, blog posts, text messages, search histories, online purchases, online reviews and comments, social likes, and shares (“What is psychographics,” 2020).

Brand Loyalty & Psychographic segmentation

Loyal customers, rather than new customers, are key in a business’s success. According to Gajanova et al. (2019), marketers invest more money, and time acquiring new customers than retaining existing loyal ones. However, focusing more energy on retaining loyal customers may not only result in lower acquisition and operating costs, but importantly boost the transfer of positive information about a company amongst people. Research by Gajanova et al. (2019) aimed to ascertain if particular groups of a company’s customers display a higher level of loyalty to the company than others. They divided customers according to demographic and psychographic segmentation. From their analysis, they found that within the psychographic variables “generational market segmentation” had the strongest measure of association.

As each generation exemplifies a unique set of experiences, values, and lifestyle that influences them, knowing these differences allows marketers to construct messages that are relevant, and pertinent to how they emotionally connect with a brand. “Understanding generational values and motivations has become essential because each generation is driven by unique ideas about the lifestyle to which it aspires (Smith & Clurman,  1997)”. 

Psychographics allow marketers improved influence, an ability to identify those who are likely to be most receptive to products, and an emotional awareness of the customer. Influential psychographic factors to consider include not only personality traits, but also lifestyle, social class, interests, behaviours, and habits. HubSpot (Meredith, 2021) identifies four key principles to consider in psychographic marketing.

1. Motivate your buyer based on their needs.
2. Meet them where they’re at.
3. Capitalise on their priorities, hobbies, and interests.
4. Include a tailored call-to-action.

In conclusion, demographic and psychographic data are both vital to success in inbound marketing. However, identifying your target buyer’s psychographic profile will allow you to appeal expressly to them, via the appropriate marketing channels, imagery, and wording. The opening quote of this piece  “All great inbound marketers have a profound understanding of their audiences’ aspirations and work tirelessly to help” must always be the predominant philosophy.

References:

Azucar, D., Marengo, D., and Settanni, M. (2018). Predicting the Big 5 personality traits from digital footprints on social media: A meta-analysis. Personality and Individual Differences, Volume 124, p150-159  https://doi.org/10.1016/j.paid.2017.12.018

Gajanova, L., Nadanyiova, M., & Moravcikova, D. (2019). The Use of Demographic and Psychographic Segmentation to Creating Marketing Strategy of Brand Loyalty. Scientific Annals of Economics and Business, 66(1), 65–84. https://doi.org/10.2478/saeb-2019-0005

Meredith, A. (2021, December 20). How to Use Psychographics in Your Marketing: A Beginner’s Guide. HubSpot. https://blog.hubspot.com/insiders/marketing-psychographics

Paunonen, S. V., & Ashton, M. C. (2001). Big Five factors and facets and the prediction of behaviour. Journal of Personality and Social Psychology, 81(3), 524–539. https://doi.org/10.1037/0022-3514.81.3.524

Smith, J. W., & Clurman, A. S. (1997). Rocking the Ages. HarperCollins e-books.

What is psychographics? Understanding the Tech that threatens elections. (2020. May 6). Retrieved from CB Insights  https://www.cbinsights.com/research/what-is-psychographics/