Demographic Segmentation: What it is and How to Use It
Effective demographic segmentation is a superpower for digital marketers that can lead to a massive 100.95% higher click-rate compared to non-segmented campaigns. It personalizes your marketing approach to meet your customers’ needs and get their attention – no matter which platform they’re using.
Add value to your messaging and bottom line by building the right segmentation groups using demographic variables to determine the most valuable customers and create marketing campaigns that attract them — a win-win for both you and your target audience.
What is demographic segmentation?
Demographic segmentation divides your market into groups that share similar characteristics (think census data like age, gender, marital status, income, occupation, ethnicity, education levels, and household sizes). A good segmentation strategy helps you find and analyze a lot of demographic data in a short time for market research and promotional purposes to attract potential customers.
There are many demographic segmentation variables (and also demographic segmentation examples) that marketers can study, but some of the most common are:
- Gender, or the range of attributes relating to and differentiating between masculinity and femininity.
- Age, or age groups.
- Ethnicity, or cultural group like Caucasian, African-American, Asian, etc.
- Net worth, or targeting by income level, for example, a restaurant that caters to middle-income families.
- Occupation, or what someone does for a living.
- Education, including what and where they studied, as well as highest level of education completed.
- Marital status. Are they single? Married? Divorced or widowed.
Segmenting by demographics is the most common audience segmentation strategy, and in many ways, the most effective. In mass marketing, demographic segmentation is one of the most powerful ways to identify different groups in your target market, allowing you to focus on them individually.
Advantages of demographic segmentation
When a business segments its prospects by demographics, it focuses on consumers who are most likely to buy its product or service. This makes it easier to identify the target market and automatically creates a customer-centric focus.
Demographic segmentation is easy to use, and data is readily available from many government resources in most countries. It allows you to improve your business in the following ways:
Enhance your customer relationships
Demographic segmentation leads to personalized marketing that helps brands reach their customers on a more human level. It helps your audience identify with what you are selling and how you are selling it. When consumers feel like you are advocating for their needs, they are more likely to do business with you.
Improve your products and services
Having a deeper understanding of your target demographic allows you to adopt a more customer-centric approach to resolve problems, create products, and offer services tailored to suit consumers’ needs.
Whether you develop fitness programs or sell make-up, you’ll know which products and applications your clients within a certain demographic will likely use and therefore buy. Cater a product or service to their needs and watch your profitability increase.
Build powerful marketing strategies
Demographic segmentation helps you create powerful and personalized marketing strategies. For example, if your target customers are in the 20- to 30-year-old demographic, you’ll focus your campaigns and use channels that resonate with this specific age group.
Once you have the information to help clarify your target audience, use it to develop resources and marketing plans that can make a massive impact on your bottom line.
How to use demographic segmentation in your business
A single, universal marketing campaign simply cannot appeal to everyone. What engages an 18-year-old college freshman will not interest a 35-year-old homemaker or a 53-year-old lawyer who’s putting kids through college.
Understanding these differences can help you isolate your customers by categories and use specific selling points for each of them. When you focus on serving smaller and more refined demographic segments, you get real value in return.
Messenger bots are a useful way of getting the right information into your hands. They effectively deliver demographic results and offer businesses the following:
Improve ad campaigns
The key thing to keep in mind as you’re thinking about demographics is how you can send better ads to relevant audiences. If you sell anti-aging skin products online, odds are, you don’t want to target women in their 20’s. If you’re marketing a software product to middle managers, you don’t want place ads in from of hourly employees.
You can use chat marketing platforms like ManyChat to sent targeted Messenger ads to your ideal audience at the right time, with the right message. Segmented Facebook ads continually prove to help companies lower ad spend and get more qualified leads.
Optimize customer experience
Digital advertising and marketing avenues like Facebook let you choose your audience based on age, education, gender, relationship status, and other variables.
Your Facebook Messenger bot greets potential customers, but before selling them anything, it asks basic questions: Which city do you live in? What’s your age? This information helps the brand provide a customized selling experience.
Bud Light used hyper-locality and personalization capabilities to deliver beer right to users’ homes, even reminding them to stock up before game day. This beer delivery chatbot resulted in an 83% engagement rate.
Send more relevant messages
One of the most powerful ways to segment your audiences is by using ManyChat tags. Tags help you divide your lists by any demographic, from gender to occupation and other information you collect, so you can send customized messages people actually want to read, which in turn, means higher open rates and higher conversions rates.
Related: How to Use ManyChat Tags
Build consumer-centric tools
Messenger bots can automatically detect the geographical location of users, gives them the option to designate a language, and talks to them in their chosen language. You can select from 38 languages, including Spanish, French, German, and Portuguese. You can even include custom emojis, structured messages, and a feedback channel. This helps businesses connect with customers on a more personal level than sending the same message to subscribers in different countries.
Catering to specific customer needs is chatShopper’s specialty. The company offers a personalized fashion bot directed toward a European demographic.
chatShopper understands customer relationship management is critical to making sales, which is why they built a multilingual app that works in both German and English.
Demographic Segmentation FAQ’s
What are the 5 main different segments for demographics?
The five main types of variables used in demographic segmentation in marketing are:
- Age groups
- Education level
- Income level
- Religion, race, and nationality
What are the 4 types of market segmentation?
The four main types of market segmentation are:
- Psychographic segmentation
- Demographic segmentation
- Geographic segmentation
- Behavioral segmentation
How is demographic segmentation used in consumer markets?
Demographic segmentation divides a target market into smaller categories based on demographic variables, including age groups, gender and income level. This customer segmentation strategy is commonly used because it’s easy to obtain through consumer insights, census data, social media, and more.
What is an example of a demographic?
Demographic data examples include age, gender, marital status, education, income, ethnicity, race, and employment.
Using demographic targeting in your marketing strategy
More than 95% of new products introduced each year fail because businesses focus more on the new product than understanding their customer segments. This can be improved with more helpful demographic information.
Making segmented demographics your best friend when it comes to marketing will help you create effective strategies that lead to refined messaging. Studying the demographic segmentation examples above, will help you understand your audience more, which will lead to higher success for your business. With time, you will define which demographic factors are the most crucial variables for your brand, allowing you to craft explicit advertisements, communications, and messages that work — every single time.