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Lists : Shatter the Crystal Ball

4 steps to using psychographics to focus your prospect lists

August 2012 By Lisa Rea
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What if you could tell what a consumer was thinking? What if you knew how consumers' attitudes differed? In both quality and quantity, the psychographic data now available are the best ever and—incorporated into your marketing program—can help you answer those and other questions.

Just a few years ago, consumer surveys were the primary source for psychographic data—insights into consumer attitudes, interests, lifestyle and values. Because surveys are relatively expensive and difficult, the amount of data was limited. So was its variety and depth, because results were restricted to the questions researchers thought to ask.

In recent years, however, the Internet has opened the floodgates for psychographic data. Panels of millions of individuals are tracked as they explore websites, check out blogs, research products and services, make purchases—and discuss them via tweets, posts and sharing. This information is supplemented by detailed SKU-level data from retail systems, including e-commerce and brick-and-mortar.

These billions of data points form a detailed psychographic picture of consumers and their thinking that can supplement demographic data to improve your marketing efforts—because, while demographic data can help identify people who may have a need for your product or service, it can't tell you much more.

For example, if you're selling Medicare coverage, your demographic target is people 65 and older who have moderate or higher incomes. But demographics don't help define why one person buys and another doesn't, or uncover the different motivations of different buyers.

Psychographic data help fill in these missing insights, enabling you to more finely segment your demographic target and hone in on the prospects whose attitudes and experiences make them more likely to become customers.

Here's how to bring psychographic data into your targeting and analytics:

1. Identify Your Best Customers
Searching for prospects who look like your best customers is hardly a new idea, but the abundance of psychographic data now available can make this "best customer profile" more robust and actionable. So, how do you define your "best" customers?

There is no single right formula; the optimal choice depends on your business and your marketing goals. For auto insurers selling annual policies, for example, frequency will not have much meaning. On the other hand, if your goal is retail traffic, frequency becomes an important attribute.

Begin with attributes that are tracked in your customer database, looking to those that bring the most value to your company. The most commonly used factors include recency, frequency, monetary value and loyalty or tenure.

You can also tap other resources to add customer data that may not reside in your database—for example, visitors to your website or competitors' sites.

2. Identify Insightful Data Sources
Your next step is to enrich your customer data by pairing it with psychographic data sources:

Online click-stream data: This provides an extraordinary window into consumer psychology and behavior by tracking millions of panelists online—including domains visited, length and frequency of visits, and online purchases. Using secure identify and de-identify processes that maintain the privacy of the panelists, data providers can match this data to your customer data to uncover behavior patterns and audience segments. Are your best customers upscale, professionally minded LinkedIn users, for example? Or on-the-go, leading-edge foursquare users?

Purchase data: This includes in-store and online purchases, compiled and aggregated from thousands of national retailers. Knowing what else your customers buy, how they buy it (e.g., online vs. in-store; premium credit card or bank card), where they buy (discount or high-end), how much they buy and how frequently they buy helps you build your profiles and segmentation.

Syndicated segmentation: In recent years, information from surveys has become more prevalent and expansive, with segmentation schemes that consolidate information to develop deeper psychographic profiles. Examples include healthcare attitudes (Are they leading the way in health and nutrition or just getting through the day?), technology adaptation (Are they aspiring early adopters or struggling minimalists?) and Web usage (Are they career-oriented online shoppers or social extremers?).

Social media listening data: This data can form a new resource. New opportunities are created by analyzing billions of postings to thousands of social media and blogging sites, allowing you to "listen" to what consumers are saying about your company, your products, your competitors and your industry. It can help you understand how different prospect segments view your products and help you craft offers and messages that resonate. These conversations (and the attitudes, values and interests they reveal) can be linked to individuals to help you learn who is saying what, how much influence they have (through Klout and Kred scores), and which are your biggest advocates.

Traditional survey-based data: Improvements have been made by data providers to offer more flexibility, versatility and depth. Today, survey data covers a wide range of consumer interests and attitudes, and even reveals purchase intent and aspirations.

3. Consolidate the Data to Amplify Segmentation
Once you have identified data sources, match them with your customer data and analyze the expanded data set for actionable segmentation criteria. A nuanced analysis will reveal purchase affinities, values, interests, hobbies and other attributes of your best customers to help narrow your prospect universe to people with similar qualities—people who are more likely to purchase.

You might also discover significant segments within your customer base. For example, one marketer we work with discovered two distinctly different segments in the customer base through psychographic profiling. One segment was ready to buy without research and went straight to brand sites. The other, less decisive group started with third-party sites offering reviews and pricing guidance. These insights enable you to tailor campaigns and messaging to respond more precisely and effectively to different purchasing interests and information preferences.

4. Put Your Findings to Work
Once you have a better-defined psychographic picture of your best customers, you can target additional prospects who share their characteristics. Options for targeting individuals are no longer limited to direct mail and email. Online display advertising can be served to specific individuals—allowing you to lift response to a direct mail campaign with targeted display ads to the same individuals.

You can also use these insights to improve other communication elements, tailoring your creative and message, modifying ad placements or search keyword buys, or even modifying your product line.

Whichever channels, vehicles and messaging you choose, be sure to design your marketing program to test the insights you gained, whether in list selection, offer, creative or other dimensions. Testing will only improve your psychographic targeting—and deliver even better results in your next campaign.

Lisa Rea is vice president of marketing intelligence for KBM Group, a Richardson, Texas-based customer engagement agency and marketing service provider specializing in customer intelligence. Reach her at


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