Ins & Outs of Demographic Data & Segmentation to Enrich Business

Steven Goh | CEO -

To connect and address the needs of an audience, a speaker must know her audience - who they are and what they do. The same applies to any serious business.

Businesses must connect with and understand their customers to create and deliver the right products and services. One way to understand customers is through their demographics. Demographics is one of the many aspects used to describe a population.

Let us look into demographics and ways to group people according to their demographics (demographic segmentation). We will also look at why you as a business need demographic segmentation and how you can get demographic data to power your business. Let us dive in!

Overview

Demographics Definition

According to Merriem-Webster Dictionary, demographics are the statistical characteristics of human populations (such as age or income) used mainly to identify markets.

Derived from the Greek word Demo (people) and Graphy (picture), demography illustrates the attributes of individuals or populations.

What is Demographic Data

Demographic data consist of properties (measured or observed) used to describe a population. Such data could be age, gender, occupation, education, and so on.

Demographic data are usually collected from surveys (either from small research or a large-scale census) using physical/online forms or other means. User profile data collected by governments, businesses, and websites during or after signup are also demographic data.

Typically, demographic data is used by decision-makers to either guide the formulation of policies or the production of goods and services. Governments and businesses can observe trends and gain insights into how demographic data affect behavioral patterns like lifestyle choices, buying habits, etc. For example, awareness campaigns can be targeted at youths who are prone to social vices.

Using insights from demographic data, decision-makers can make forecasts and plan accordingly to maximize the efficient delivery of products and services.

What are customer demographics?

While demographics are particular to all organizations and sectors, customer demographics narrow it down to the attributes of customers.

Businesses use customer demographics to categorize customers and identify potential prospects.

Customer demographics typically answer the business questions of "for whom to produce?" and "where to find them?". As a result, there is the potential for better marketing and product design.

Demographic Data Examples

The examples of demographic data can be viewed either at the individual level or at a more general group (population) level. For example, attributes like age and gender are specific to individuals while migration and fertility rate are attributes of a population.

Examples of Demographic Data

Demographic data includes:

1. Age

Age is a demographic data that affects the use of some products and services. Some products are age-specific. For example, daycare services and toys are provided for children. Wedding rings are made for adults of marriage age.

2. Gender

The preferences of each gender differ. For example, alcoholic drinks and hard sports are usually associated with males while romantic movies and shopping are usually associated with females.

3. Occupation/Employment

Using Occupation/employment data, decision-makers gain insights into the employment rate and available opportunities. For example, medical equipment is more likely to sell in a city with many health facilities and workers relative to one with fewer health facilities and workers.

4. Marital Status

Marital status influences the decision-making of individuals. For example, single individuals might be quicker to purchase personal or even luxury items like a jetski, unlike married individuals who are more likely to buy products that meet a shared goal like housing, furniture, insurance, etc.

5. Family Status and size

Family status and size influence spending capacity. For example, upper-class households can spend more than mid-class and lower-class households. Also, large families spend more than small families because they have more mouths to feed.

6. Cultural background

Ancestry background is an example of demographic data that distinguishes a population. Occupation, buying habits, choice of clothes, and so on are affected by cultural backgrounds. Cultural backgrounds include

Race - categorization of individuals into distinct groups based on shared physical and behavioral qualities e.g. White, Black/African American, Asian, American Indian or Alaska Native(Native American), Native Hawaiian or other Pacific Islander. Race influences education, occupation type, health practices, religious practices, and so on

Ethnicity - describes the cultural inheritance/identity, language, and practice of a people in a given region. Like race, it influences the kind of education, work, lifestyle, and habits of an individual.

Religion - the belief and worship of a deity or supernatural being. Popular religions include Hinduism, Islam, Christianity, etc. Religion strongly influences the lifestyle and occupation of people.

Since beliefs and traditional practices vary based on cultural backgrounds, businesses can tailor their products and services to specific cultures as a form of niche marketing.

7. Nationality

Nationality or citizenship usually influences behavior, international transactions, and the opportunity for migration and employment.

8. Education

The levels of education of a population can be used to describe the literacy rate of that population. Advancements in business, technology, and infrastructure are usually associated with a high literacy rate.

9. Income level

The income level of individuals determines their spending capacity and the brand/quality they choose. For example, high-income earners are more likely to purchase luxury goods than low-income earners.

Many more demographic characteristics include disability status, location, linguistic (language) background, ownership, or belongings. Personal information such as preferences, hobbies, and lifestyle is also considered.

These example types apply to all types of demographics, like customer demographics, audience demographics, and so on.

The dynamic aspects of a population which are considered the components of geography include

  • Migration - the movement of people from one place to another.
  • Growth    - increase in the number of people in a population.
  • Fertility - the frequency of normal sexual reproduction births in a population.
  • Mortality - the frequency of deaths in a population.

These factors alter the size of a population and therefore are influential factors in demographics. They are essential to understand the economy and growth in terms of population and revenue and to improve standards.

What is Demographic Segmentation

Demographic segmentation is a type of market segmentation where people are grouped based on the variables/attributes listed above. For example, dividing a population into different age categories is a form of demographic segmentation. Division of customers into categories based on demographic/census data is often done by both governments and businesses.

The government along with the private sector utilizes this data effectively to run the economy and improve living standards. For example, increasing public transportation/building apartments to meet demands.

In marketing and business, Demographic Segmentation is a crucial aspect. Demographic and demographic segmentation are key elements of customer segmentation, which involves grouping people based on similar demographic characteristics.

For example, a university could create an ad copy of its offerings specific to Instagram, TikTok, or Snapchat as it's easier to reach people of age 18-24 on these platforms.

Uses & Importance of Demographic data

Demographic data is widely used by a government for creating policies and allocating resources. For example, the government may build more elderly homes and care facilities if a population is largely dominated by older adults.

For businesses, demographic data is mainly a marketing tool to reach and assess customer behavior. Customer segmentation is a vital part of this process.

Customer segments, sometimes an outcome of a market basket analysis, describe sets of customers grouped by shared attributes and habits. Customer segmentation allows businesses to

For example, knowing the percentage of women in regions with high income makes it easy for victoria's secret to market and establish its brand in those regions.

Easy Ways to Get Demographic Data

To get demographic data, you need to determine the reasons for collecting data. Next, identify the types and source(s) of demographic data that will meet your needs or business requirements. Then collect the data.

Depending on the source and scale, getting demographic data is a time-consuming and elaborate task. You can get demographic data by conducting physical and online surveys, from existing data sources such as government websites and public records, or data providers.

Usually, government efforts and records census is collected every year and is available to the public on gov websites. The benefit is that the demographic data helps the government form policies and take measures according.

However, collecting and organizing such data takes time and resources. Any business depending on such data runs the risk of collecting stale data since they take some time to update. Another issue is that public data are often wide range and are hard to filter out.

For businesses, the demographic data requirements are different. The various means often used to get demographic data to include:

  • Surveys & forms - This involves collecting personal information through physical or online forms.
  • Marketing measures - involves collecting data through digital marketing campaigns across various offline/online channels. Electronic devices such as computers, phones, and tablets are typically used.
  • Data providers - Data vendors specialized in providing quality data. Businesses that require a particular customer profile are best served by data providers.
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Harness the power of demographic data

Businesses and governments need to collect and use demographic data to serve customers and citizens respectively.

Since the behaviors of individuals or customers are influenced by their demographics (age, gender, education, political affiliations, and so on), understanding their needs and connecting with them becomes easier.

With demographic data, businesses can know who to produce for and where to find them. Power your business today with rich demographic data from Proxycurl.

Frequently asked questions (FAQ)

What are audience demographics & analysis

Audience demographics entail the demographic characteristics of your audience or listeners like age, gender, level of education, occupation, group affiliations, and so on. Audience analysis involves identifying patterns in the demographic data of your audience.

Who are the Target audience & How to find them?

Your target audience is those for whom you produce goods, content, or services. You can find them through public data sources and data providers like Proxycurl.