Psychographic segmentation: how to increase communication ROI by examining values, beliefs and motivations

Communication World, Dec, 2002 by Carol M. Morgan, Doran J. Levy

For many years, demographics have governed how communication target their campaigns. The problem is that even though individuals in a specific demographic category share some common characteristic, such as age, sex or income, the psychographics of these groups--their values, motivations and beliefs--are not homogeneous. There are multiple motivations for a behavior, and people in a specific demographic category have a wide range of attitudes. Although demographics can turn up objective facts, such as that your target customer owns a car, they can't tell you why the person bought the car. Psychographics can. They measure the motivations behind a behavior, including why individuals in a specific generation or income bracket will accept or reject a message, act on it or ignore it. Using psychographics can help communicators improve the quality and accountability of their campaigns by zeroing in on the most receptive audience for their message.

COMMON OBSTACLES

When first beginning to understand and apply psychographics, communicators often run into three impediments.

* The first is using demographics to infer an audience's motivations or behaviors. For example, the suggestion that all mothers believe it is important for their children to play a musical instrument. Such inferences are based on intuited leaps of faith, and the relationships they postulate do not necessarily have a basis in reality.

* A second obstacle is the multiplicity of attitudes and motivations within an audience. There may be multiple motivations for a behavior, and individuals in a demographic category have a wide range of attitudes toward a subject. Statements such as "The primary motivators for Latin

Americans are home and family" or "Resistance to authority is a hallmark of Generation Y" are oversimplifications.

* The third obstruction to understanding audience motivation lies in creating messages targeted to an average. An "average consumer" does not exist, and messages targeted to this mythical audience remain too general to convince or motivate anyone. In addition, an "average" perspective submerges and ignores the real motivational differences that occur naturally within every audience.

For example, when attitude toward a subject or awareness of it is measured before and after a communication, the results are usually reported as averages of the total population. Before an information campaign, a communicator may note that an average of 42 percent of an audience agrees that an employee benefit is important, whereas an average of 58 percent agrees afterward. The problem with reporting averages is that a segment within that average may feel far more strongly about the subject than others--and that one segment may be more critical to the company's success than any other.

SUCCESS THROUGH SEGMENTATION

These roadblocks can be removed by applying psychographic segmentation. When attitudes, motivations, personality characteristics and belief systems are analyzed mathematically or statistically to determine groups with substantially different attitudes, the result is a psychographic segmentation. When psychographics are segmented, the need to either oversimplify or use averages evaporates, and communicators can select the most effective message for each segment. For one segment a message may confirm an established viewpoint, and for another, a targeted message will change a mindset. Segments that consider an issue or subject to be far more important than does the mythical average could be made up of opinion leaders who influence others' viewpoints. When these weighty segments are measured in a statistically accurate way, a communicator can compare before and after measures--by segment--to determine the true impact of a program.

Return on investment can be further enhanced by examining a psychographic segment's demographics. For example, a segment may be receptive to a particular product, but lack the financial resources to actually purchase it. Or, although receptive, those in a particular segment may avoid mass media to such an extent that few messages, no matter how relevant, will reach them. The behaviors of a particular psychographic segment can confirm for the communicator whether a segment that evinces a particular attitude actually follows through with a tangible behavior. Looking at all the facets of a psychographic segment establishes whether or not it is a worthwhile target, allowing efforts to be focused on the most profitable segments, as well as those with the highest potential.

BREAKING DOWN BABY BOOMERS

For many organizations, baby boomers and mature consumers are an important audience. People 40 and older compose 42 percent of the U.S. population, and will grow to almost half (47 percent) by 2010. This immense demographic group is responsible for 66 percent of all expenditures tracked by the Consumer Expenditure Survey (CXS); enjoys 64 percent of all pretax income and controls 65 percent of all discretionary spending; and, according to the U.S. Bureau of Labor Statistics, comprises 47 percent of all employees.