A successful marketing campaign means getting the right message to the right customer, at the right time. This is where segmenting your customer data comes in. It’s far more effective to create multiple versions of ads for your different audiences, rather than one far-reaching ad that’s designed for everyone.
Demographic data analysis gives you key insights into the characteristics of your audience. This includes data points such as age, gender, and monthly income. To keep several steps ahead of the competition, you should also identify your customers’ psychographic and behavioral data.
Some 91% of consumers say they’re more likely to shop from brands who recognize, remember, and give them relevant offers and recommendations so it’s something that’s definitely worth doing.
These days, first-party data is becoming even more valuable. With changes such as Apple’s iOS update, the importance of having your own customer data is becoming even more clear. With algorithms having less information to go off of, it will be up to you to provide more information to the tracking pixels.
Demographics tell you who your customers are, while psychographics and behavioral data go even deeper into their interests and motivation. A combination of these allows you to get extremely granular with your marketing efforts, increasing your chance of conversions.
You don’t want to keep pushing products or ad messages to an unresponsive audience. That’s why investing time and effort in demographic segmentation can pay off.
If you already have an email list and an existing customer base, the next thing you should do is organize your audience demographics into a database that you can use as a reference. In this article, we’ll be looking at how ecommerce businesses can use demographic data to scale. We’ll also look at important demographic data points that you should have.
Let’s dive in now.
Benefits of Demographic Information in Ecommerce
Demographic information offers a number of benefits for ecommerce stores. Here’s a look at some of the ways you can use demographic data in your business.
The most successful businesses start with the customers’ needs in mind. Defining a target market and creating buyer personas are important when making a business plan. When you have a product or service, you have to be crystal clear about who to sell it to. Demographic data helps you define your ideal customer and identify high-value leads and prospects.
Identify Market Opportunities
At some point, your company might need to launch new products or sell to new markets in order to scale and make more profit. It’s important to make informed, data-driven decisions and having demographic information helps with that. It takes away the guesswork in figuring out which groups are most likely to convert and purchase. This saves you time and money when it comes to making changes that impact your bottom line.
Ad Planning and Budgeting
Knowing your target audience demographics eliminates ad spend on low-value users and instead shifts your focus on high-value users. Key demographics such as age and gender can also be a factor when deciding which platform to distribute your ads on for maximum exposure. For example, if your customers are women, then Pinterest advertising may be a good idea since 60% of their users are women.
Customized Marketing Messages and Offers
According to Google, “Analyzing your audience composition lets you also understand the kinds of creative content you need to develop, the kinds of media buys you should make, and the kinds of audiences you need to develop for marketing and remarketing campaigns.”
Before starting a marketing campaign, you need to know the type of customer you’re directing your messages to. Are they in their teens, 20s, or retired? Are they men or women? Do they live in the city or suburbs? Having this data can completely change the tone or type of imagery you select for your campaigns.
Image Building and Positioning
Branding, product positioning, and pricing are all important for a brand’s success. Data like age, gender, income, and family makeup can affect the brand image you want to convey. The way you price and position a product also depends on your target demographic.
Attracting and Converting Quality Leads
If your goal is to scale and earn more revenue, you need to attract high-quality customers who purchase from your business. Demographics and psychographics give you insights into who they are and where to find them.
Better Customer Service
Demographic data lets you create a personalized shopping experience that feels more human and authentic to your customers. When people feel that a business cares for its needs, it creates deeper customer loyalty, which means customers are more likely to become repeat buyers and advocates of your brand.
Study the Competition
Let’s say that you’re selling protein fitness bars and in your market research, you’ve confirmed that there’s a high level of interest for it among men aged 25-45. You can look up your competitors for the same target market and see how you can differentiate your product or marketing strategy.
Customer Segmentation Models
Companies and marketers traditionally used demographic data to segment their customers. But now, with even more data available, it’s possible to collect information on user interests and buying habits.
Here’s a look at some different types of segmentation:
Demographic data refers to socio-economic data such as age group, gender, race, location, and occupation. Investopedia defines demographic analysis as the collection and study of data regarding the general characteristics of a specific population.
In marketing, it’s one of the most popular and classic ways of using data to know who your customers are and to look at their behaviors. Companies use it to determine whether their products or services are targeted toward their customers.
Adele Revella, CEO of Buyer Persona Institute and author of Buyer Personas defines psychographics as “the qualitative methodology of studying consumers based on psychological characteristics and traits such as values, desires, goals, interests, and lifestyle choices.”
Understanding these insights allows you to craft more effective marketing campaigns and create a personalized online shopping experience. You can focus on what the customer cares about, and disregard the ones they don’t.
This is data on customer purchasing behavior. It can be with your brand or with others. It includes information on how much they spend and how often they shop. It also takes into consideration interactions with your brand and their level of engagement. Behavioral data is helpful for identifying and segmenting which users are most likely to be repeat customers or high-value buyers.
According to HubSpot, other types of segmentation include:
Mobile-use or desktop-use. Apps and software used.
What’s their personality, attitude, and values? What are their interests?
What are their tendencies and frequent actions or habits?
What are their product must-haves and needs?
What’s the economic value of this customer group?
Fields to Include in Your Database
Here is a list of data points that can enhance your database. Keep in mind that each e-commerce store is unique. The demographic information needed for a pet supply shop will look very different from a video game store. Select the ones that are relevant for your business and gather the data.
Having this information gives you a lot of valuable insight into your audience, allowing you to segment your email and advertising in a way that targets customers with relevant news or offers.
(Souce: BlackBox Intelligence)
Age: Knowing which generation your target market belongs to helps you understand their motivations and buying behavior better. People growing up in different eras have different experiences and mentalities, so it’s important to keep that in mind when planning your marketing strategy.
For example, people born between 1946-1964 are Baby Boomers. Millennials are people who are born between 1981-1996. You could sell the same product to both groups, but to sell effectively, you must adjust your strategy for each as there’s a big difference between how the two generations think and respond to advertising.
Aside from generation-based segmentation, businesses can also target specific age ranges or lifecycle stages such as children, adolescents, adults, and seniors.
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Gender: In general, men and women have different needs, likes, dislikes, and thought processes. Gender-specific marketing is a powerful tool if done correctly. Avoid stereotypes and focus instead on having clear and effective marketing messages.
Location: Where your customer lives can influence his or her wants, needs, and access to goods or services. Factors like climate and whether it’s a rural or urban area can affect what products they may need. Customers in metropolitan areas like New York or Los Angeles have access to a large variety of products, while those in suburban areas may have fewer options.
Ethnicity: This is useful for e-commerce stores selling products that specifically target customers based on ethnicity or nationality. This could be useful in the food industry, such as businesses that sell products or spices that are mostly used in certain ethnic cuisines.
Income: Data on income, property, and investments give you an idea of a certain group’s purchasing power. They’re important factors when it comes to pricing and positioning. You can also use this data to study how people in certain income groups choose to spend their money.
Property Ownership: You can also include data on property ownership, with fields on Homeowner Status, Home Market Value, Length of Residence, and Home Property Type.
Level of Education: Data from the U.S. Bureau of Labor Statistics show that there is a positive correlation between the level of education and income.
Marital Status: Certain products may be more attractive to a married couple than it is for single people, and vice versa. Single people also have different priorities than married couples.
Presence of Children: The number of children also affects a family’s buying habits. A couple who are just about to have their first child will have different priorities than a big family. For example, a couple with several children might be more interested in more affordable household products than a couple having the same income but without any children.
Occupation: This field is especially relevant for ecommerce stores that sell specialized items that are useful for certain professions. If you own an office supply store, you want to make sure that people working in offices, teachers, or students see your ads.
Interests: Knowing about your customers’ interests helps you recommend products that appeal the most to them or to shape your advertisement in a way where your product seems relevant to their lifestyle. And for e-commerce stores selling niche items, having data on customer interests helps you refine your targeting. This can include:
- Arts and Crafts
- News and Events
- And so much more!
Purchasing Habits: This is behavioral data of the customer. Knowing their purchasing habits gives you deeper insights into what they are interested in and what motivates them to purchase. Here are some examples of shopper types:
- Automotive Buyer
- Charitable Donor
- High-End Brand Buyer
- Magazine Buyer
- And more!
Email Activity Metrics: Having an email list is a smart strategy, as this is a form of media that you own and have control over. You also have access to insights that help you learn more about your customer, such as:
- Date First Seen – date of sign up
- Longevity – how long a customer has been on your email list
- Velocity – the activity of the email over the last 6 months
- Month Last Open – date when your email was last opened
How to Collect Customer and Visitor Data
Customer Accounts on Your Website
If a customer opens an account on your website, you may already have some demographic data such as location and gender.
You can also add some optional fields asking about their interests and other relevant data, but assure them that the information will be kept secure and will only be used to give them better recommendations and a more personalized shopping experience.
Accenture found that 83% of users are willing to share data in exchange for a more personalized experience, and SmarterHQ says 90% of consumers are willing to share personal behavioral data for better offers and an easier online experience.
Pro Tip: You can also append this information to customer email addresses. There are several services that help you with this task, but we use Towerdata for this.
Website and Social Media Analytics
Google Analytics and social media platforms now offer ways for you to see demographic information about the type of people visiting your website, and how they behave. For Google Analytics, make sure the demographics and interest reports are enabled on your account. Keep in mind however that not all of your site visitor’s data may be captured, especially if they opt-out of using cookies or identifiers.
(Source: Google Analytics)
Interviews and Surveys
You can conduct interviews and surveys with your past customers, existing customers, ideal customers, and leads. When conducting surveys, ask questions that will help you fill in the details you don’t have yet.
Customer Relationship Management (CRM) and Point-of-Sale (POS) Data
Data from your CRM and POS can give you valuable behavioral data on the characteristics of customers who buy from you. It shows you the amount customers spend, how often they buy from your store and the type of products they buy.
FAQs: How Customer Data Helps Segment Your Advertising
Why is customer data important in advertising?
Customer data allows you to target your audience, meaning your messages will be much more tailored and effective than they’d be if you used a broad brush for everyone.
How customer segmentation can be used effectively in marketing?
By segmenting your audience, you can customize ads and email campaigns, allowing you to boost their effectiveness.
Why would you segment your customers and their data?
Segmenting your customers takes longer, but you’ll get much better results. It also helps you to understand who your most valuable customers are, and allows you to meet them via their preferred platform, and communicate with them much more effectively.
Customers today expect a seamless, personalized experience when shopping online, and that includes the advertising they’re seeing as well. In today’s data-driven world, there’s no reason why companies can’t deliver this type of service.
By diving deep into your customer demographics and interests, you’ll have a better understanding of the person behind the screen. You have higher chances of delighting and keeping your customers hooked, which in turn will help your business grow.
The Next Steps
So what happens next? First things first, get started by setting clear customer segmentation goals. Then, segment your customers into the groups of your choice. Next, create a plan to target and reach your customer segments. Finally, test the whole thing by running customer segmentation analysis, this includes surveys.
What customer data do you need to scale your business? Reach out today for your FREE 20-minute consultation call. Let’s find a strategy to help your business grow.
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