What exactly are demographics? Why is it important to have an understanding of your customer’s demographics when marketing your business? It’s simple: Understanding and connecting with your ideal client should lead to an increase in revenue. But, the key to this statement is: your ideal client. Otherwise, you’ll spend thousands of dollars getting your message, products and services in front of the wrong people. Developing a marketing plan that considers the audience and most effective methods to reach them can take your business to the next level. Below we’ll focus on some of the top demographics and why they are important to consider in developing your marketing strategy.
Descriptions of Leading Demographics and Their Importance:
Demographics are the statistical analysis of people or a group which includes: age, gender, education, income, lifestyle and more. Taking each of these segments into consideration is important for a variety of reasons.
Age: Simply put, different generations like different things. Someone who is a Millennial may have different likes and dislikes versus someone who is a Gen Y. Understanding each generation will help you understand their thought process when it comes to purchasing goods and services. For example, the Traditionalist or Silent Generation of the 40s may be interested in a type of vehicle that is very different from a Generation Z of the 2000s.
Location: Where are your ideal clients located? If your product is specific to a certain region, you’d ideally want to target your marketing efforts towards that location. Knowing where your clients are physically, or where its important for them to purchase your products or services, is important if location plays a role in what you provide. Location is also a useful tool in identifying your competitors. Who else is providing these services in your market, what are their offerings and value propositions, and how do your fees and prices compare?
Gender: In many situations, males and females simply have different needs. There are situations in which marketing needs to appeal to both genders equally, but in other situations, segmenting between men and women is important. Examples of these would be a specific hygiene company or brand of makeup. In the last few years, Dove has created a marketing campaign specific to the everyday woman. Dove knew their customer demographic and found it more effective to create a campaign targeted at women, leaving men out almost completely.
Education: It is often argued that education can be directly tied into the income demographic. However, this can vary due to other demographics, such as age. Companies that provide educational programs or materials may take their client’s education into consideration when developing their marketing plan.
Income: Individuals that fall within different income brackets tend to have different purchasing preferences and habits. For example, those that fall within lower income brackets may be attracted to products or services which are more affordable and easy to access. Again, age is often associated with income as someone who is a Gen X may fall within an income bracket that is very different from a Baby Boomer.
Lifestyle: This could include one’s likes, dislikes, interests, hobbies and more. If your target client base falls into specific lifestyle categories, marketing to that interest helps you narrow your audience list. Grouping clients based on their interests, among other demographics, can help you better serve them.
Why Understanding Demographics is Important:
Opportunity: In theory, we should all be able to describe our ideal client. You may be able to pinpoint a profile exactly, or perhaps you have different segments of populations you target. Understanding your client demographics can help you spend money in the right areas using the best methods. By creating an ideal profile, you better understand who your client is, their interests, and buying preferences allowing you to utilize and test this example when you are developing messaging and marketing and communications programs.
Budget: If you know who you’re targeting, you can create a marketing budget specific for that client base. For example, if you’re trying to target millennials, it would make more sense to spend your marketing budget on social media versus direct mailers. Knowing your client helps you spend wisely. There’s an old adage I’m sure you’ve heard about reaching 1,000 people or 100 people who are your target market. (Hint, hint: it’s the 100 in your target market and one of the reasons is you’ll have a higher ROI).
Unique Selling Position: Creating a marketing plan based on your client demographics can help you build a unique marketing story and capture niche audiences. When you best understand your client, you can create a unique story and selling proposition to resonate with them and ideally increase your return on investment.
Demographics should be part of the foundation to your marketing plan. Not fully understanding your client can be costly both in time and money. The most important function of demographics is getting your message in front of the right people to increase your sales.