Demographics explain who your customer is. Psychographics answer the more important question: why do they buy?
Psychographic segmentation is the process of dividing a market into smaller groups based on psychological attributes such as values, beliefs, interests, lifestyle, attitudes, and motivations.
Online marketing has become too complex to rely solely on age, income, and location. Two people in their 30s with the same income level may have completely different values, interests, and motivations. One spends money on travel, the other invests in cryptocurrency. One trusts personal recommendations, the other makes decisions based on online reviews. If marketing is based solely on demographic data, it loses depth.
Psychographic segmentation allows companies to understand the motivations, values, and behavior of customers, rather than simply grouping them by formal characteristics. It is responsible for why Apple attracts people with a certain style of thinking, and Nike is associated with a certain lifestyle, and not just with shoes.
Brands that have mastered psychographic segmentation receive more accurate targeting, increased engagement, and customer loyalty. According to Harvard Business Review, 64% of consumers choose brands that share their values, and McKinsey notes that companies using a personalized approach increase revenue by an average of 10-30%.
In this article, we will analyze how psychographic segmentation works in B2C and B2B, which companies are already using it in practice, and how AI allows you to do this with maximum accuracy.
How psychographic segmentation works in B2C
In traditional marketing, the target audience is often described as “men aged 25–35, average income, a city with a population of over a million.” But why do some of them choose Tesla, while others choose Toyota? Why does one buy New Balance sneakers, while another prefers Adidas? The answer is in psychographic data: values, beliefs, interests, lifestyle, and attitude to risks.
Psychographic segmentation allows marketers not just to sell products, but to integrate into the customer’s lifestyle. Instead of focusing on age and income, brands study:
- Values: what is important to the customer – environmental friendliness, innovation, status, freedom
- Personality: extrovert or introvert, rational or impulsive buyer
- Interests: sports, technology, art, self-development
- Lifestyle: does he lead an active lifestyle, travel, take care of his health
- How brands use psychographics
Apple sells not just gadgets, but a way of thinking. Their marketing is not focused on age or income, but on people who consider themselves creative, independent, and open to new things. Their advertising never talks about technical specifications – it shows who you become when you use Apple.
Nike doesn’t sell sneakers – it sells an ideology. “Just Do It” is not about shoes, but about overcoming yourself. Nike targets people who identify with an active lifestyle, competition, and motivation.
Patagonia builds a community, not just sells clothes. Their audience is people who care about protecting the environment. They are willing to pay more for sustainability, and Patagonia uses this in their marketing.
Brands that use psychographics create not just customers, but fans. Accenture research shows that 83% of consumers are loyal to brands with which they share the same values, and companies that integrate psychographic data into advertising increase conversions by 2 times.
In the next section, we'll look at how psychographic segmentation works in B2B and why values and thinking styles are just as important in corporate sales as they are in B2C.
The Role of Psychographic Segmentation in B2B Marketing
In B2B marketing, a customer is not just a company, but a group of people with different interests, values, and needs. And while firmographics and behavioral data remain the main tools for B2B brands, psychographic segmentation is becoming increasingly important for effective targeting and creating personalized offers.
In B2B, psychographic segmentation helps:
- Identify a company that is ready for innovation: Brands offering new solutions (for example, in the field of SaaS or AI) should understand that not every company is ready for rapid adoption of technology. Some organizations, especially traditional or conservative ones, will be more cautious with new approaches, even if they are more effective.
- Align with the customer's values and goals: In B2B, the purchasing decision often depends on the company's values. For example, organizations with strong corporate social responsibility (CSR) will prefer to work with suppliers that share their views on the environment or charity. For these companies, a psychographic approach is key to building trust and long-term relationships.
- Understand decision-making styles better: Some companies make decisions through group consensus, while others use an authoritarian approach. When a marketer understands these differences, they can tailor more targeted engagement strategies to each key person in the decision-making process.
How Psychographics Improve B2B Marketing
Salesforce and HubSpot have long understood that successful sales are not just about which product best solves the customer’s problems, but also about how your brand is perceived and how your product aligns with the customer’s values.
Salesforce, for example, creates psychographic segmented content strategies that target specific data management and customer experience needs. Their ads and content don’t just offer solutions, they focus on how Salesforce can support their corporate goals and values. This allows for more personal and effective marketing communications.
Additionally, using AI and data analytics, LinkedIn Ads analyzes not only job skills and job titles but also behavioral triggers to offer the best content for different types of companies and decision-makers. This helps make marketing more accurate, predictable, and personalized.
Why Psychographics Are Critical in B2B
In B2B, buying decisions are rarely “impulsive.” Instead, they are driven by serious internal analysis, corporate strategy, and long-term goals. And if your marketing campaign does not resonate with the values and purpose of the business, you risk missing out on an important customer. It is important to remember that in B2B, values-based selling and approach are built not only on the needs of the organization but also on the personal beliefs of the decision-makers.
Brands that use psychographics significantly increase the likelihood that they will be able to create strong relationships with customers and continue to work with them in the long term. In the next section, we'll look at how AI can help improve psychographic segmentation and how the data generated by this technology can lead to better marketing strategies.
How AI Improves Psychographic Segmentation
AI hugely enriches the prospect of psychographic segmentation so brands can look beyond the usual information. It facilitates the analysis not only of demographics, but behaviors, motives, and passions in real-time to reveal subconscious tendencies difficult to locate by manual intervention.
AI doesn’t just assess what a person does, but why they do it. This allows companies to fine-tune targeting and predict which products or services will be most attractive to a specific segment. For example, AI can detect that users with a certain lifestyle are more likely to buy eco-friendly products, or that people interested in sports tend to have a certain type of interaction with products.
With AI, you can not only personalize offers but also predict needs based on behavior. Data analytics systems can infer values, preferences, and potential pain points for customers, allowing you to create accurate and dynamic psychographic segments.
At M1-Project, we use AI and tools like ICP Generator and Marketing Strategy Builder to build dynamic and adaptable psychographic personas that help brands target their audiences more accurately. The system analyzes behavior and preferences, adjusting strategies to the real needs and desires of customers.
AI helps not only in creating precise segments but also in constantly adapting marketing in real time, increasing efficiency and engagement. The sooner companies begin to implement these technologies, the faster they will be able to predict customer needs and act proactively.
Step-by-step strategy for implementing psychographic segmentation
When you start using psychographic segmentation, you don’t just get new data — you change the approach to marketing itself. Demographics provide basic information, but psychographics allows you to understand what lies behind each action of your customer, what values and beliefs drive their decisions. To do this, you need to go through several important steps.
Let's start with collecting data. This is not just surveys about age and income. It is important to understand how people behave, what they search for, what topics they respond to, what problems bother them. You can collect information through website analytics, communication with customers, social networks, or research of reviews. The goal is not just to collect data, but to begin to identify behavior, motivation, and lifestyle. This will allow you to build not just a portrait of a client, but a full-fledged persona based on what drives a person on a deep level.
Once the data is gathered, it needs to be interpreted by employing AI. This is when tools like the ICP Generator at M1-Project.com help make you aware of how data regarding customer behavior, interest, and motive can be turned into unique segments. It's AI which digs into the particulars, identifies patterns, and informs you of what your customer truly requires and which variables will impact them. This allows you to do more than basic segmentation by income and age, but also predict what products or services your customers will be most interested in based on their values.
Next, you need to segment your audience. This is not just dividing into groups, but creating deep, dynamic personas. Psychographic segmentation allows you to unite people not by standard demographics, but by interests, personal values, and lifestyle. For example, if you work with B2B, you can highlight companies that strive for innovation and rapid implementation of technologies, or, conversely, organizations that value stability and traditional approaches. In B2C, customers can be segmented based on their attitude towards ecology or interest in healthy living.
Now that your audience is segmented, you need to combine this information into your marketing strategy. With AI, you can create highly targeted advertisement campaigns and promotions that not only appeal to your customers' interests but also their values. This is not mere interest-targeting, but a better comprehension of what actually matters to your customers. For instance, if your customers are environmentally conscious, your ad messages should present how your product addresses ecological problems. This could be in terms of how your products are manufactured, or how your product makes your customers' lives better according to their values.
Always fine-tune your strategy. Psychographic segmentation is not an exercise in one-time analysis. With tools like M1-Project's Marketing Strategy Builder, you can update your strategy in real time as customer behavior shifts. This makes your marketing campaigns not only targeted, but dynamic, ready to respond to changes in customer needs and interests.
Psychographic segmentation gives you the chance to move beyond a superficial understanding of your audience to creating deep, personalized interactions. By implementing these strategies with AI, you can not only increase conversions, but also create long-term relationships with customers who will feel that their values and interests are taken into account at every step of their journey with your brand.
Conclusion
Marketing based solely on demographic data is no longer able to meet the demands of a rapidly changing market. In 2024, customers demand a deeper, more personalized approach. Psychographic segmentation allows you to understand what drives your customers, not just their age or income. This means not just selling something, but forging real relationships with your customers based on their true needs and values.
To get there, though, you must not just acquire information, but also process it with AI. With applications like ICP Generator and Marketing Strategy Builder by M1-Project, you can move from templated approaches to advanced personalization and accurate prediction of your customers' needs. Psychographic segmentation is not only a phenomenon, it's a key element of marketing in the future, which not only improves your performance, but also creates lasting relationships with customers.
The future of marketing lies in the hands of those who can not only collect data, but read it on a deep level. Use psychographic segmentation to bespoke strategies and your company won't be just trendy, but ahead of the rest.
.svg)
