Customer Satisfaction through Psychological Segmentation
If you can think, feel, and behave like your customer, you will be able to communicate with them effectively.
Understanding how our customers make their buying decisions along with their current attitudes toward your company allows you to provide them tailored service and information to make their buying journey easy.
Benefit? Happy customers = increased sales, higher customer satisfaction, and higher retention. WIN WIN!
Purchasing decisions and customer behaviors when dealing with your company relate to the individuals’ lifestyles and interests. People have different interests, attitudes, and traits. Some people are very fitness and health conscious while others are foodies. Some people are sports mad and highly competitive, while some just want to have fun on the weekends. Some people want to be highly involved in their financial planning, others really want someone else to help them through or do it all for them. Psychographic (or Attitudinal) segmentation occurs when you break your market down along these interests and attitudes so you can offer the most appropriate products and information to each segment.
If you can think like, feel, and behave like your customer, you will you be able to communicate with them effectively. Psychographic/Attitudinal segmentation takes you right into your customers’ thought processes.
What is Psychographic/Attitudinal Segmentation?
Just as demographics explain “who” your buyer is, psychographics explain “why” they buy and the process they go through to get there. Demographic information includes your customers’ factual data – gender, age, income, marital status etc. Psychographic segmentation is dividing your market based upon consumer personality traits, values, attitudes, interests, habits and lifestyles, and your data holds the key.
You can only effectively communicate with your target audience when you understand both their demographics and psychographics. The combination of both sets of data starts to form your buyer segments or personas – a detailed picture of the people you work with now, and would like to work with in the future.
So how do I know which psychographic/attitudinal group my customers fit into?
Use data to predict this – and then put this knowledge into action. Good news is, this is in the data you already have.
- Historical transactional data
- Customer surveys
- Website analytics & app usage
- Call centre notes and transcriptsTake a look at your existing data. What has inspired people to click, call or buy in the past? Are your customers experiencing significant life events (e.g. having a baby, moving house)? Are they expressing intentions or concerns? Extract and analyse this rich information and use it to create structured data sources and defined customer segments.
Next Build Personas from your Customer Segments
Buyer personas are fictional representations of your ideal customers. They are based on real data about customer demographics and online behavior, along with their personal histories, motivations, and concerns.
With personas, businesses can be more strategic in catering to each audience, internalise the customer that they are trying to attract, and relate to them as human beings.
So how many personas do you need to create? Generally consider three to five personas to represent your audience; this number is big enough to cover the majority of your customers yet small enough to still carry the value of specificity. Give each persona a name and description relevant to your business e.g.: the avoider, the casual user, the fashion upgrader, the knowledge geek – whatever holds the most relevance to the segment.
Marketing personas will vary from company to company, and each will be unique. There will, of course, be similar themes that run throughout all personas. It’s when you get into detail that you start to see where the differences crop up and you’ll be able to pinpoint the needs of that group. Figure 1 gives an example of how a persona might look.
Using Psychographics in Your Marketing
Getting the psychographic data is important, but really applying it to your marketing messaging and processes is how you make it effective:
- Craft messages that really resonate for your customers.
- Design scripts, checklists for service, and allocation of marketing and advisory staff for each person.
- Select optimum delivery channels.
- Train service, advisory, data and IT staff.
- Automate the application of the statistical model to all customers.
- Monitor model to ensure accuracy over time
The results will be a better experience for the customer and a more engaged user for your business.