What Is Demographic Segmentation (+ Examples)
What is demographic segmentation, and what does it have to do with your digital marketing strategy?
It’s all about tailoring your marketing messaging more specifically towards a specific group of potential customers.
Talking to a small targeted customer group is better than talking to a large, random crowd and hoping for the best.
So let’s take a deep dive into what demographic segmentation is and how to apply it to your business marketing segmentation strategy to get more profitable results.
What Is Demographic Segmentation?
Demographic segmentation is all about dividing your customers into different groups based on different personal and socioeconomic factors, buying patterns, and behaviors.
Different segments can include:
- Age group
- Income status
- Educational status
- Buying patterns (bundles, once-off or occasional purchases, regular buyers)
This allows you to create tailored offerings, marketing messages, ads, and campaigns for each group and their specific needs, desires, and problems.
This marketing effort will pay off in more conversions, sales, and revenue.
Types of Demographic Segmentation?
Age segmentation is when you divide your customers into age groups, such as 18-25, 26-34, 35-50, etc.
You can also think of age ranges determined by lifecycles — students, young adults, mid-lifers, over-forties, empty-nesters, etc.
Other businesses prefer to use the typical generational terms such as Millennials, Gen X, Gen Z, etc.
Income and occupation
Income level and occupation are popular demographic markers, particularly for companies with more high-ticket or luxury offers.
It’s all about targeting the right offer with the right price to the right group that can afford it.
Income and occupation (including education level) are some of the main factors that determine your customers’ lifestyle and buying preferences, so it’s worth taking this category seriously.
Gender segmentation may sound silly, but this demographic factor bears consideration to avoid stereotyping your consumer market.
While your products or offers may be more suited to males, don’t exclude females who may also be interested — as a gift for a male family member, for example.
Focus on promoting positive values and perspectives, regardless of which gender you’re marketing to.
Religion and Ethnicity
Diversity is a hot topic in customer segmentation.
Ethnicity, race, nationality, and religion heavily influence interests, preferences, beliefs, and reasons for buying.
Keep this in mind to avoid offending one group in your target audience.
For instance, Coca-Cola is a global brand, but they tailor marketing messages according to the demographic information of each country.
Family structure strikes at the heart of many customers’ value systems, beliefs, and consumer behavior, as well as their available spending money.
For families with young children, you’ll want to highlight product benefits such as durability, safety, affordability, etc.
Other Types of Marketing Segmentation
- Geographic segmentation — categorizing your target market according to the areas/cities/countries they live in. This is useful when determining shipping costs and accessibility, for instance.
- Psychographic segmentation — categorizing your target market by focusing on traits like social status and engagement on certain social platforms, daily activities, hobbies, food habits (like vegan, paleo, banting, etc.), and opinions on a particular topic (political, religious, environmental, cultural, etc.).
- Behavioral segmentation — categorizing your target market by their behaviors. This can include lifestyle factors, such as exercise habits, eating habits, buying patterns, travel routines, etc.
- Firmographic segmentation — categorizing your target market based on business variables such as company size, location, annual revenue, etc.
Benefits of Demographic Segmentation
1. Advanced personalized marketing
Demographic segmentation is beneficial because it allows you to speak more precisely to various specific groups within your target audience.
It allows for personalized marketing, i.e., making each potential customer feel more special as if you are talking directly to them.
It makes your brand stand out because customers will feel that you care enough to make an effort to understand their unique needs, desires, and problems.
2. Develop better products and services
Demographic segmentation also allows you to develop better products and services.
Armed with more detailed marketing research, customer feedback, and customer demographic data, you can expand your range of products and offers.
You can tweak certain specific features according to the particular needs of each group in your target audience.
You can also create bundled products for each market segment, offering only what applies to each group.
3. Laser-focused marketing strategies
By now, it’s clear that demographic segmentation is the laser gun in your marketing toolbox.
Clarity on your target audience segment and their needs, interests, behaviors, and beliefs is the best starting point for every marketing campaign you create.
Marketing is about creating relevant connections with your ideal clients.
Relevance depends on your understanding of your clients, which opens the door to conversations that generate revenue!
This can save you loads of money in your marketing efforts because you know exactly who you’re focusing on, what you’re offering, and why, instead of throwing the whole budget into generic ads and hoping for the best (which inevitably ends up giving rather underwhelming results).
4. Build customer loyalty and retention
Customers are people, just like everyone else.
A relevant connection is the key to getting their attention, trust, and money.
Market segmentation turns that key.
When customers feel like a brand knows and understands them and listens to their problems and the solutions they are looking for, they will be loyal to your brand for a long time.
Customer retention is one of the core factors that ensure business success, so inspiring customer loyalty with targeted marketing messages and offers is crucial.
It’s the cheese on your mac, okay? It makes everything better.
Pitfalls of Demographic Segmentation
Before you get ready to light up your enthusiasm for market segmentation and take off, be aware that it can also backfire if you do it incorrectly.
For instance, don’t get so laser-focused that you end up excluding people who are also potential targets.
Get specific with your digital marketing, but don’t overdo it, or your sales will be far less than the effort you spend.
Using demographic variables incorrectly
Make sure that your offers and marketing messages are aligned with the particular demographic segment you’re aiming at.
In other words, don’t market vegan whole foods to steak enthusiasts.
Check that your marketing message, the offer itself, the price, the ads, and the entire campaign aligns with every aspect of the demographic variable you’re marketing to.
Examples of Demographic Segmentation
Age segmentation — Adidas
Adidas, one of Nike’s biggest competitors, aims at a similar age range as Nike — 15-45, but with a different approach to their slogans and target messages.
Nike has been on the scene for ages, so Adidas came up with the message “creating the new”, appealing to young people with a sense of freshness — something different.
They also apply this slogan to their advertising on the social channels their audiences spend time on, using technology to be as relevant in their audience segmentation efforts as possible.
Income and occupational segmentation
Income segmentation makes plenty of sense for luxury brands like Prada, who market their products to clients in the upper socioeconomic groups.
It’s not just about the high-quality, luxury product with a well-known brand name, but the full, glamorous buying experience for the consumer.
Occupational segmentation is relevant to industry-specific products and marketing.
Caterpillar.com is a leading manufacturer of construction and mining equipment, and this includes hard-core, durable mobile phones.
They offer practical and essential features such as waterproof phones with big batteries that last, dustproof speakers, aluminum frames, and gorilla glass screens.
Gender segmentation — Fatherly.com
A fun example of gender segmentation is Fatherly.com, a company that focuses on providing more masculine-looking and masculine-featured products for dads.
Their branding, positioning, and marketing make for a fun and practical customer experience that is more than just a parallel offering of mom products, giving dads their own niche.
Religion and ethnic segmentation
Ann Voskamp (Religion)
Religious segmentation is about catering to your target audience’s religious beliefs.
For instance, well-known Christian author Ann Voskamp’s products are marketed to devout Christian women who want devotional material with meaty substance for reflection.
Adwoa Beauty is a great example of ethnic segmentation, as it provides natural hair care products for multi-cultural hair textures.
Ethnic segmentation applies to various industries today as it’s a social hot topic, so consider how it can apply to your organization as well.
Family structure segmentation — IKEA
Family structure plays a huge role in people’s expendable income and buying patterns.
Couples about to begin a family look for quality, affordable baby products.
Couples with children in school look for resources that can be passed down.
A good example is Ikea’s kids’ furniture with a focus on storage solutions (because no kid ever has enough, right?).
Level up your marketing with demographic segmentation
Now that you know how demographic segmentation works, look at your customer data and see which categories stand out — location, age, gender, buying patterns, socioeconomic status, etc.
Then, start turning your attention towards the ones that are most prominent and create targeted marketing messages for each group.
Check that every aspect of your marketing message and offer makes sense for the demographics you’ve selected.
Time to test, tweak, optimize, and make a profit!