Today we’re going to talk about a subject that is often misunderstood by small business owners: the difference between demographics and psychographics. When you created your business plan we’re sure you were told to define your target market. Most of the small business owners we encounter either have a very vague target market such as “Women aged 18-85” or worse; their target group is “everyone”.
Today, we’re just going to tackle the first pitfall of a very general target market, but don’t worry we’ll get to “everyone” at some point, we’re not letting you off the hook that easy!
The concept of demographics arrives from measurable categories such as age, location, sex, occupation, income, ethnicity and so forth. And that’s great, most of us like easy measurable categories, it sure makes a marketer’s job easier and enables us to quickly separate people into categories. And while there might be a general assumption that “rich people” or “middle aged men” behave the same measurable way, the problem is that people rarely fit into these neat demographic categories. At the core, a target group such as “Professional Women age 18-65” or “Medium sized household in Georgia” are too simple. That type of target market is derived from the presumption that “women age 18-65” think and behave exactly the same. Do you know any 18 year old girl that is identical to the average 50 year old woman? Or vice versa? Do you even know two 50 year old women who think, act and behave exactly the same way? The occasional pair of identical twins aside, most likely not. And if you do, then very few.
Now you’re thinking, but wait a minute, I make jewelry and all women love jewelry! Well, not all of them. But even among the ones that do, they have different tastes, needs, habits, price points, uses and so forth. And their price point does not directly correlate with their income, it has to do with how much they’re willing to spend on a product. You can have a middle class woman who will save for months to buy a piece of jewelry, and a woman at double the net worth who thinks it’s a waste of money.
So then how do we solve this problem? Enter psychographics. Psychographics categorizes people (remember we like categories) based on things such as attitudes, beliefs and motivations; basically they tap into what makes people tick. For example often, a need for recognition is a much stronger motivator than someone’s age. Similarly a passion for snowboarding can say a lot more about consumer behavior than gender. At the core, psychographics transcend demographics. A 65 year old woman who is a board game fanatic will possibly have more in common with a 16 year old male board game fanatic due to their shared love of board games, then she would women her own age who enjoy gardening.
The question we want you to ponder today is, how much more powerful would your marketing efforts be if you could focus on the psychographics of your target audience? Of course we’re not saying ignore demographics, if you’re selling a $800 bar of chocolate your audience will most likely be made up of a certain demographic income group. But it’s not their income that will motivate them to buy your chocolate bar, it’s their love for chocolate. Everyone in that demographic income group will not be your customer, so don’t focus on the demographics. In fact, if you focus on the true motivator, a love for chocolate, you might be surprised at how many outside of your perceived demographic expectations become loyal brand followers, while their purchasing habits might be slightly different than their higher income chocolate loving counterparts, they will be more loyal to your brand than demographically accurate vanilla-lovers.