Consider this: You have two consumers. They are both married white men; 73 years of age. They are both English. They are both extremely wealthy and live in castles.
Relying on this demographic information alone, you would probably assume that these two individuals have very similar shopping behaviors. You would also probably be surprised to learn that these two men are Prince Charles and Ozzy Osbourne.
If you’re wondering how the Prince of Wales and the Prince of Darkness can be so alike and so different at the same time, you’re really contemplating the distinction between demography and behavioral segmentation.
What are demographics?
Traditionally, we group people into meaningful buckets based on factors like age, income, gender and location.
Demographic information has obvious intrinsic value in terms of marketing direction. Many companies sort their audience in this way because the data is readily available. Almost any transaction can furnish a business with at least the consumers’ name, location and assumed gender. Companies that offer rewards or customer loyalty programs can easily gather so much more.
Demography is undoubtedly foundational and useful - but is it enough? What critical information do brands miss out on when they focus on traditional descriptors? Behavioral segmentation goes a step beyond demographic data to more meaningfully differentiate potential consumers.
How does behavioral segmentation work?
The difference in behavioral segmentation data and demographic data is a matter of what vs. why. It explores consumers’ less tangible qualities, like their values, decision making strategies, attitudes, fears and beliefs. The objective of a behavioral segmentation is to sort consumers by their shopping behaviors, even if this creates a mixed bag of age brackets, genders and income levels.
As you can imagine, this data is a bit more complicated to extract than the kind of information you can glean from a submission form. Well-designed consumer interviews and surveys reveal the qualitative and quantitative data that helps marketing strategists divide audiences into more meaningful buckets based on their behavior – and shape messaging accordingly.
What does behavioral segmentation data do that demographic data can’t?
Behavioral segmentation is more interested in finding common purchase drivers within a pool of consumers than in establishing external similarities. When it comes to designing effective marketing strategies, this kind of research gives you several key advantages.
1. Behavioral segmentation helps you find the story.
Imagine you are part of a company that sells fiber supplements. Demographic data reveals that your average consumer is female and older. Recognizing this, you direct your messaging towards women 50 and above. Advertisements feature active adults with salt-and-pepper hair. You invest in endorsements from older celebrities.
Why this strategy may not be entirely ineffective, it simply leverages a correlation between age and shopping behavior. It doesn’t explore the consumer’s relationship with the product or address what influences purchases.
Effective story-based marketing is all about understanding motivations. Where demography highlights a particular age bracket, a behavioral segmentation study seeks to isolate a portion of the population concerned about gut health. Tell the story of how your product helps your audience meet their health goals, and you’ll win their consideration.
2. Behavioral segmentation avoids oversimplifications.
Painting with broad strokes can cause you to miss out on key segments of your target audience – and it can cause your business to miss out on sales.
Take our example about fiber supplements: A behavioral segmentation reveals that, while the average consumer may be over 50 and female, proper digestion knows no age or gender. Younger people who would otherwise be intrigued by your product may fail to consider it if you target a demographic rather than tell a story about gut health.
Advertising campaigns that are exclusively directed at a particular age bracket or seem overtly masculine or feminine may actually alienate potential consumers who will assume your product isn’t intended for them.
3. Behavioral segmentation helps you discover new audiences.
You can’t make more women over 50, but you can use well-crafted messaging to create more digestive health enthusiasts. This is the magic of behavioral segmentation.
By examining the motivations that unite your target audience rather than static external factors, you can continue to explore ways to broaden your reach. When you find that your product offers value to a demographic of people who don’t typically shop your category, you gain an opportunity to build new in-roads and grow your brand.
How do behavioral segmentation and demography work together?
While behavioral segmentation can tell you a lot about what motivates your target audience, demography is your best bet for determining where to find them.
Different advertising platforms are more popular with particular genders and age groups, so it’s important to take this into consideration when deciding how to deliver your messaging. Story-based marketing is powerful, but it’s only as effective as it is visible. Make sure your campaign is delivered as thoughtfully as it was designed.
Is behavioral segmentation right for your business?
Investing in a behavioral segmentation study is a great move for businesses that want to increase the long-range effectiveness of their marketing strategies. It can save companies from casting an excessively wide next by identifying a specific, well-described target audience. It can also broaden your prospects by helping you target consumers beyond your expected demographic.
Because of the complexities involved in gathering and analyzing behavioral segmentation data, it’s often best to partner with a consumer research company that is prepared to turn your findings into a plan of action.
By being willing to think differently about how your target consumer may look, you’ll open yourself up to a world of possibilities and unprecedented opportunities for growth.