To understand what makes your customers tick, you may segment them. Demographics are an ideal place to start because they consider non-characteristics like age and gender.
You can target your time and resources on the most likely buyers with demographic segmentation. Let’s get started.
In this article, you will explore the definition of demographic segmentation, demographic segmentation variables, why you should segment your customers based on their demographics, and examples of demographic marketing.
A demographic segmentation strategy divides your subscribers based on factors such as gender, age, location, income, etc. This technique allows you to better understand the many types of customers you have and their wants and needs.
Demographic segmentation allows you to send more targeted messages rather than generic blasts, and it enables you to target your efforts on customers who will resonate with your brand and make a purchase.
Let us now look at some commonly used demographic segmentation variables in e-commerce marketing.
Variables for Demographic Segmentation
Using demographic segmentation, businesses can personalize their marketing by utilizing the following most important methods.
To create the right marketing messages and communication channels, it is necessary to segment by age. Using certain social media channels might be more effective for a younger audience than using email or SMS.
There are four categories: children, adolescents, adults, and seniors. These categories can also be divided into different generations. People in Generation Z might select different products from those in previous generations.
There can be differences in expectations and needs among people of different nationalities. A marketing strategy that is considered acceptable in one country might appear pushy and intrusive in another. Also, this is a good opportunity to send out promotions for upcoming holidays and events.
In addition to gender, the way a person browses and purchases might also be affected by their gender. Typically marketed to females, a product like perfume might seem irrelevant to most males on your mailing list. Personalized marketing is more effective when you know your product’s gender appeal.
Income determines a customer’s buying power and preferences. High-income customers, for example, may prefer messaging rather than privileged channels when they are searching for luxury products.
Black Friday deals and discounts are well received by lower-income customers. There are three income brackets for subscribers: low, middle, and high.
Education’s effect on income and lifestyle is assumed in this variable. This variable includes categories such as primary education, secondary education, college education, and university education.
Higher education subscribers, for example, might be more interested in complex and cultural products, while students might respond well to books and laptops.
As a result, price preferences are also affected by this variable. It also enables brands to offer products that meet the needs of particular professions. One example of protective clothing would be for those in the construction industry.
People at different stages of their lives can be reached with different strategies here. Families with a large number of children may prefer products that appeal to or assist them. Singles, on the other hand, may prefer to purchase more luxury products for themselves.
Demographic segmentation: Why is it important?
Following are some benefits of using the right demographic segmentation variables for your business:
- A higher retention rate: When customers feel valued and understood, they find it easier to stick around. Your customer retention rates will likely increase with effective segmentation as people are much more likely to stick with a brand that knows their needs.
- Personalized marketing campaigns: By identifying your key customers and their specific needs, you can create marketing campaigns tailored to meet their needs. As a result, delivery statistics will improve, engagement will increase, and revenue will increase.
- Building long-term relationships: Long-term relationships with customers require reaching out with customized messaging. They will not only stick around for the long term, but they will also tell their friends and families about your brand.
- Products and services that are more personalized: Knowing your target customer’s needs and preferences will allow you to provide them with products that resonate with them.
- The right pricing of products and distribution: Knowing the income and location of the customer can help with better pricing and distribution.
Examples of segmentation based on demographics
Let’s take a look at how brands use different variables in real life to individualize their marketing now that we know the how and why of demographic segmentation.
Segmentation by age
According to One Dollar Shave Club, their target audience is men ages 18-34 years and they choose to market to them accordingly. In creating engaging marketing messages directed at the right people, they consistently use playful, positive, and humorous messages.
Over the past few years, One Dollar Shave Club has been successful due to its clearly defined approach crafted with demographic segmentation. Examples include:
In creating marketing materials, companies need to consider gender differences as well.
As shown below women were specifically targeted in this award show email because it features women’s nominations. There’s a slim chance that an average male would find this email relevant since it’s based only on female email users.
Segmentation by family status
Depending on where people come from, they have different needs. As we can see from the following example, by targeting subscribers based on their family status you can market products that fit their lifestyle.
Ola’s newest ad illustrates the functionality of their model for large families. With children, dogs, and lots of room for equipment, it depicts the activity and togetherness of family days out. This program targets young professionals with young children and emphasizes space and fun.
Segmentation based on income
Marketing strategies differ according to income level. As seen here, Audi’s ad oozes luxury, versatility, and dynamics while targeting a high-income demographic.
Marketing luxury goods is all about exclusivity. It is important to emphasize a product’s uniqueness whenever speaking to high-income customers.
Benefits of demographic segmentation
Demographic segmentation can have a wide range of benefits for your business, including:
- A better level of personalization
- Increases customer loyalty
- By offering more relevant products
- More effective advertising
- Gaining an edge over competitors
- More effective lead generation
There are so many other things as well. Demographic segmentation is a relatively straightforward marketing automation tool that yields impressive results with little effort.