Think about what you’d pick up in a mall today and compare it to what you found intriguing five years ago. You may have noticed that over the years, your interests have deviated from what they used to be. And that’s why demographic segmentation has become an essential strategy in marketing.
What attracts a 10-year old is quite different from what an 18-year old would find interesting. Seeing these differences in interests helps you categorize your audience into demographics. Through these various demographics, you can create more targeted and appealing advertising campaigns.
So out of the several marketing segmentation available, be focusing on demographic segmentation in this post. I’ll be explaining the rudimentary details of what demographic segmentation is, the probable variables of demographic segmentation along with why it’s important for every marketing strategy/campaign.
What is Demographic Segmentation?
As the name implies, demographic segmentation is a branch of market segmentation that categorizes a target audience into smaller groups based on demographics like age, sex, and marital status.
Demographic segmentation means understanding the external makeup of your target audience and finding out what will appeal better to them. Asides from this, it is also a means of properly channeling your resources to the right stream. Say, for example, you own a diaper company. Your marketing team will save a lot of time when ads are directed at not just parents alone, but parents who have babies and toddlers.
Through this segmentation, you can find out what their buying tendencies are, what they like, and what they definitely won’t subscribe to. Once all this is put into consideration, your marketing ads will have a higher click-through rate because it’s reaching the right people.
And this is why demographic segmentation is one of the first go-to’s in market segmentation. It is easier to group an audience based on demographics because all you might need could be a survey or analytics software. Also, it’s the fastest way to categorize a huge data of your target market.
Why is Demographic Segmentation Important?
While it’s practically impossible to please every member of your target audience, it is possible to convince a significant number. And the best way to do that is through segmentation. If you’re still wondering what the fuss about demographic segmentation is about, here are some of the reasons why it’s highly important to your marketing strategy.
Grants a Significant Return on Investment (ROI)
Like every other interaction, you might consider opting for cold calls with the hope that it’ll attract a number of potential leads. However, this type of broad marketing is only going to cost you a lot of money. Plus at the end of your sales funnel, you’re not exactly certain of a significant customer base after. I mean if I don’t have babies, why will I be interested in seeing the best baby strollers on my feed?
Demographic segmentation helps you channel all your resources to the right place. You’ll be marketing to people who have a high chance of buying what you’re selling.
So whether you’re creating social, email, ad or physical campaigns, you have to create segments and market to them differently based on what will interest them. This is the one way to get the return on investment that you’re hoping for.
Through demographic segmentation, you’ll understand your audience better. With the information you get, you can go back to the drawing board to better understand the holes in your previous campaigns. This segmentation will broaden your vision and help you create winning strategies. You’ll know how to budget resources and the right time to allocate for each step of the funnel. The more specific your campaigns are, the higher chances they have of converting.
Improves Product Quality
Through demographic segmentation, you can better understand the needs and wants of each specific segment. This feedback can be applied to subsequent product updates. An example is the Airpod by Apple. After segmenting their audience, they understood that there’s a need for improvement in the earphones department.
Apple understands that most of its customer base would be more interested in a wireless earphone that provides mobility and comfort when listening to music or receiving a call. By capitalizing on the Airpods, Apple keeps updating its features that strengthen the loyalty of their customers.
Improves Customer Loyalty
Customers stick to brands that resonate with them. When you provide what you’re sure they’ll need, it improves the relationship you have with your audience. This because they see the effort you put into personalization and they understand that you’re trying to understand their wants and needs.
Think about the emails you’ve received lately. Which one do you keep opening? The personalized email that provides you with content you’re interested in or a generic email that looks like it was obviously sent to a thousand other contacts?
Variables to Consider in Demographic Segmentation
If you’re looking to start market segmentation and you want to dive into demographic segmentation, here’s are some common variables or sub-segments you should really consider;
1. Age Segmentation
Being the most common reason for varying interests, age is a great place to start off when you want to segment your audience. A number of marketing campaigns usually categorize their segments using this as the basis.
The first reason to include age in consideration is knowing ‘where’ to place your ads. Because, while older people are drawn to Facebook or their emails, a younger generation will spend most of their time on social apps like Instagram, Twitter or Tik-Tok. Age lets you understand where your target audience is located. With this in mind, you can work around creating and strategically placing these ads.
Asides from influencing ad placements, age also plays a huge role in purchasing trends. The type of clothes a demographic between age 18-24 would fancy, will be completely different from what a demographic of age 55-64 would like.
2. Gender Segmentation
Usually when marketing clothing or fashion items, the first demographic that comes to mind is gender. This is because what men would ordinarily find attractive might be different from what women would consider fashionable. Finding out the gender of a person can help you tailor your products to what their perceived taste would be like.
Another example is if you run a sanitary care business like producing tampons or cups, it is easier to get more buyers from the female gender than the male.
Do note that segmentation by gender only works if your product is gender-specific. Also, be careful not to play into gender stereotypes like believing men always want blue and women opt for pink.
3. Religious Segmentation
While this might seem like an unnecessary question on a form, imagine getting an ad on a Bible app when you’re a Buddhist or Atheist. It’ll definitely be on your ‘swipe away’ list. And this is why a number of sites deploy the need for a religious demographic. Especially when a particular product revolves around these boundaries.
In some cases, you may have already applied a demographic segmentation by say gender. And now you want to market your carefully sewn Hijab collection to a demographic of women. The issue with this is that a greater percentage of your target market will be Muslim women. So, you need to also segment these women by religion to appeal and further maximize the power of your ads.
4. Level of Education
The level of education one determines the purchasing choices and interests. Let’s say you’re a bookstore owner looking to expand in a certain location. Your first segmentation won’t definitely be by gender but by the level of education in your location. Are you surrounded by professors and Doctors? Or do you have more high-schoolers and middle-schoolers in your environs? The answer to this question will let you know what genre of books you should stock up in your store.
If your business isn’t something related to the above and you just want to sell your service to a market, level of education also plays an important role in the diction you use in your ad. The way you’d create an advert for a graduate is different from the ads you’d create for a middle school student. The key difference is in language and details.
5. Ethnicity and Race Segmentation
People have different cultural and ethnic backgrounds and this difference influences our daily needs. For instance, an African American would have a hair product different from what an Asian would use. And this is because race plays an important role in hair texture.
Another example would be owning a grocery store. The type of groceries a person shops for depends on what they consider normal for a daily meal. And daily meals are influenced by a person’s cultural background. Where there’s a high population density of Indians for instance, you’d have to stock your shop with ingredients and grocery items that are common to Indians. This is because since they make up a significant percentage of the demographic in your location, you have to create things that’ll be considered valuable to them.
So if you’re offering a product or service like the examples above, you’d have to segment your audience based on their race, cultural background or ethnicity.
6. Income level and Occupational Segmentation
Income plays a significant role in buying choices. This is why retail outlets target their marketing ads, campaigns and expansion based on this demographic. Walmart and Target are examples of retail stores that segment their target audience using this demographic. Most people who patronize these stores are low-income shoppers and all the products fit into what their shopping budget would be.
Another example is fancy sports cars like Ferrari and Porsche. These companies have to undergo research to find high-income earning people who will be more inclined to buy these cars for the amount they go for.
And that’s why even airlines have three categories of customers all based on income level. That is the Economy, Business Class and First Class tickets.
Occupational segmentation is when you market a product or service to an audience in a particular profession. What appeals to a white-collar worker, will be different from the marketing that appeals to a blue-collar worker.
For example, you can’t market pharmaceutical products to an electrician and hope to get a ton of purchase. He/she will definitely be sceptical about the authenticity of your product. Your best bet will be going through a Doctor who can endorse or prescribe to hundreds of electricians. Your product can then become a brand because it comes under the advisement of a trusted healthcare professional.
So if you’ve been considering segmenting your marketing audience, you should totally go ahead with it. It is easy to satisfy people when you group them in segments with similar interests. Remember, the more you resonate with an audience, the more they’ll stick to your business. And in many cases, you’ll get referrals.