Psychographic Market Segmentation

Taking Your Marketing Segmentation to a Fine Art

Psychographic segmentation is a method used to group prospective, current or previous customers by their shared personality traits, beliefs, values, attitudes, interests, and lifestyles and other factors. These characteristics may be observable or not. Identifying these important factors can be a powerful way of marketing the same product or service to people from otherwise dramatically different demographics groups, geographies or other characteristics. Every prospect or client/customer has a different psychographic make up. Analyzing that make up and grouping similar characteristics together is the start of psychographic segmentation.

Why Use Psychographic Segmentation?

When your obvious groupings of target segments seem to have radically different needs and responses to your offerings and messaging, this is a major indicator it is a good time to look at psychographic segmentation. This method is a powerful way to market the same product to individuals who otherwise seem very heterogeneous. Many expert marketers say this approach will ultimately yield the greatest payoff, in many ways: purchase amount and frequency, lifetime value, loyalty, and more. Finally, once you've completed your segmentation, it will be easy to develop and execute against marketing personas – which basically brings each segment to life for everyone involved in crafting different parts of your marketing plan.

How Is Psychographic Segmentation Executed?

There are different ways to accomplish this objective, and it is really dependent on the size of your addressable market, your budget and your time horizon. Here are some common approaches:

  • Primary market research, mainly in the form of attitudinal surveys that are then analyzed via factor analysis by a statistician to find patterns and groupings. For this method, you will need to have a sense of where the differences or dichotomies may lie, so you can probe in those areas. This research may be followed up with a qualitative study to dig deeper into certain areas. Be aware that the competencies of your research/marketing agency can affect the outcome, reflecting the truism, "Your answers will only be as good as the questions you ask."
  • 'Down-and-dirty' market research using some method such as Google Surveys. Again, you will need to have a sense of the dimensions or elements of difference. And you can just intuit the differences and test through an inexpensive digital means, or have a statistician conduct the more formal analysis. This is (obviously) even more subject to error, but for small budgets, it is probably better than a stab in the dark, in that it can be directionally correct.
  • Marketing artificial intelligence, can be seen as segmentation on steroids because of the solution's ability to rapidly test, learn and improve, mainly through predictive analysis and deep learning. In the not too distant future, we believe this method of 'marketing learning and optimization' will be seen as the formidable match to the digital marketing explosion of tactics and content. Finally, with this method you will be able to intelligently optimize the voluminous data produced through the millions of digital options possible given the multitude of channels, platforms and devices that may be part of your target segments' buying process.

In the end, whichever method you choose, you will want to make sure that your consulting firm or agency delivers a segmentation model that does the following:

  1. You must be able to take action on the insights provided… so it must also be practical.
  2. You must be able to clearly see the differences between the groupings. People should belong to one group or another, but not both.
  3. The results should be reproducible even with a separate set of subjects, so it has more than a single time usage.

Psychographic Segmentation Increases Your Marketing ROI

By segmenting your market based on psychographic characteristics, you are able to be more targeted. You will be able to choose the correct channels, the correct messaging, the right offers to maximize exposure to key segments. As a result, your money is spent more wisely and you should see an increase in your ad spend efficiency and/or a greater return on investment. You also can appeal more specifically to motivations in your messaging, which improve your conversion rate. In other words, you will likely see performance improvements in many areas.

Ways To Group By Psychographic Characteristics:

Personality Traits

Brands, products, and services all have personalities, created intentionally or unintentionally. When purposefully, marketers will often create these personalities to match the personality traits most attractive to their target market. When a consumer can relate to the characteristics of a brand, product, or service they are more likely to engage with it. Learning about the personality traits of your target segments can help you refine your brand personality, or vice versa, looking for traits you’ve already expressed through your brand can create a more fiercely committed and loyal audience.


We all have different lifestyle patterns that reflect many factors, including our stage of life. Our wants and needs change based on those patterns. Segmentation by lifestyle considers where the customer or client is in their lifecycle and what is important to them at that exact time. When segmenting a target market based on lifestyle psychographic characteristics, marketers promote their products and services as solutions to those wants and needs. Note that while this approach is generally applied B2C for consumer products, it also can be applied B2B based on company lifecycle characteristics.

Opinions, Attitudes, Interests, Hobbies

This categorization looks at factors such as opinions on religious, gender, politics, views on the environment, sporting and recreational activities, and arts and cultural issues. The opinions your market segments hold and activities they engage in have a huge impact on the products and services they buy, and even how they respond to your messaging. This is a rich area of opportunity in digital marketing, particularly with content marketing and social media. We think it is worthwhile for every company to explore this as a way to foster rich and rewarding experiences for both the customer/client and the company.

Social Status

This segmentation approach crosses with several others, including demographic (income strata) and lifestyle (stage of life). Since there is a strong psychological component in a person’s need to maintain social class standards, this can be a very powerful method of segmentation. This approach can be used fruitfully when there is a direct connection between interest in and consumption of your products and services directly with a social status. In fact, many marketers try to make this connection, so their products are a natural outward expression of a social status. And again, this can be used with both B2B and B2C products and services.

Degree of Loyalty

Customers who buy your brand either all or most of the time are extremely valuable. And it is worth nurturing the loyalty of all customers. By using this method of segmentation, you can adapt marketing vehicles and messaging to retain your most loyal customers. You can also actually segment according to degree of loyalty, potentially marketing different products/services in different ways with different messaging to each segment. A rule of thumb is that it is 10-times more profitable to sell to existing customers than to find and sell to new ones.


If your product or service is purchased or consumed around an event or occasion, it makes a lot of sense to segment this way. And if it currently is not, is there possibly a way to introduce a connection to an event or occasion? Purchases made for weddings, holidays, etc. are examples. But there are also very interesting examples of how companies have connected to occasions and stages of life in very ingenious ways. And if your offerings naturally fit into this category, you may want to experiment with broadening usage to other times by using benefits sought, lifestyle or attitudes segmentation as well.

Why DirectiveGroup?

DirectiveGroup has deep experience with business and marketing strategy development. Unlike other digital marketing agencies that have one specialty or one point of view, DirectiveGroup has a rich and widely dimensional body of expertise in marketing strategy development, marketing plan development, online marketing and advertising, and website development.

Additionally, we bring marketing artificial intelligence to you, offering a platform agnostic SaaS product that will quickly apply machine learning to move from descriptive to predictive to prescriptive segmentation. This product will bring you amazing improvements in customer/client understanding, followed by conversion improvements and a significantly improved ROI on your digital marketing spend.

Let DirectiveGroup Help You With Your Market Segmentation Needs

Just about every company could benefit from specialized targeting using demographic, psychographic, Behavioral or geographic methods. At DirectiveGroup, our goal is to deliver maximum volume of business from the highest profit-producing segment. You need marketing segmentation to be effective, so why not choose a digital agency that has the in-house experience to deliver what you need?

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