If you want to market your business effectively, it’s crucial to understand your target audience. Once you understand who they are, what they want, and how to reach them, you’ll be able to advertise yourself in the most efficient way possible. 

At the base of all marketing strategies, there are customer demographics. In this article, we’ll cover everything you need to know about them, including:

  • What are customer demographics?
  • Why are customer demographics important in marketing?
  • What can we learn about different demographics?
  • How are customer demographics used in marketing?

What are customer demographics?

Customer demographics are different sections of a consumer population. If you think of all active customers in the market as a large pie, then customer demographics are ways you can divide that pie into different slices. 

There are loads of different demographics that you could divide a customer population into, such as:

  • Age. 
  • Race.
  • Ethnicity.
  • Gender.
  • Marital status.
  • Income.
  • Location.
  • Education.
  • Employment.

Splitting customers into different categories like this is useful for different groups of people because they often react to products, advertisements, and messaging in broadly similar ways. 

Why are customer demographics important in marketing?

When producing a business plan, you need to understand as much as possible about your target demographic:

  • Who are they?
  • How many of them are there?
  • What do they value?
  • How do they purchase products?
  • What marketing material do they respond to?

The best way to understand a target audience is by collecting detailed information about them. The more you know, the better you can tailor your marketing strategy to try and reach them. 

Broadly speaking, there are two kinds of information you can gather about customers:

  • Quantitative data — Anything that can be measured by numbers, like percentages, purchases, and website traffic. This is the kind of data that will tell you what demographic a customer belongs to. 
  • Qualitative data — Information that’s observed and recorded. It tends to be opinion-based, like customer reviews, surveys, and interviews. This is the data that will tell you how different customers feel about your actions. 

What can we learn about different demographics?

By recording customer data, there are loads of different things you can learn about different demographics and their habits. 

Identity Data

Identity data will tell you basic information about customers and their lives, allowing you to sort them into different demographics. Additionally, you can learn more specific details, like: 

  • Name
  • Phone number
  • Home address
  • Email address
  • Job title
  • Social media handles
  • Account information

Knowing this kind of information allows you to make customer profiles, allowing you to better understand how they behave. 

Engagement Data

Sometimes called interaction data, this shows you exactly how customers are engaging with your business through various channels. For example, you could see exactly how many customers are contacting you by phone, email, or social media. 

Behavioural data

While engagement data records how customers interact with your business, behavioural data shows detailed information about their specific actions. 

For example, you could analyse purchase history, abandoned shopping carts, renewed subscriptions, or customer drop-off. Insights like these allow you to perform a more detailed analysis of your customers.

Attitudinal data

Attitudinal data measures the way customers feel about your brand identity, products, and services.

Because it’s opinion based, the only way to gather attitudinal data is by asking customers for feedback – that’s why so many businesses ask their customers to complete online reviews and surveys. 

The biggest problem with attitudinal data is that it’s difficult to calculate. Everybody is different. They all have different expectations, standards, and methods of expressing themselves.

How are customer demographics used in marketing?

After you’ve gathered enough customer data about different demographics, you can analyse it, allowing you to make more informed decisions with your marketing strategy.

Improve customer engagement

Engagement data can tell you how different demographics are engaging with your business’ online platforms, including your company website and social media pages. 

Analysing customer engagement will tell you how well your marketing strategy is attracting customers or improving brand awareness. You can then adjust your strategy and see how it affects different kinds of engagement.

Increase conversion rates

Conversion rates show how many people viewed your marketing material versus how many actually carried out the desired action. 

For example, you could see how many people bought something after visiting your store. Or you could check how many purchased a specific product after viewing promotional material.

By viewing the conversion rate figures, you can measure how convincing your marketing material is to different demographics. 

Review point of sale (POS) preferences

You can use customer data to show where your sales are coming from. This allows you to focus your marketing strategy on different areas and prioritise methods that appeal more to your target demographics. 

For example, you might see that your Instagram business page is getting more sales than your Facebook business page. Information like this might show that you’re doing something right on Instagram that you’re not doing on Facebook. 

Alternatively, it might also reveal that more of your target demographic is using Instagram than other platforms, giving you a clear target to focus your efforts. 

Manage your business finances with accounting software

All this marketing information is only useful when it leads to more sales, so you’ll want a clear picture of how your decisions are affecting your profits in the long term. With the Countingup app, you can see exactly how much you’re earning compared to how much you’re spending. 

Countingup is the business current account with built-in accounting software that allows you to manage all your financial data in one place. With real-time cash flow insights, you can see how each of your spending decisions affects your finances by generating profit and loss statements. If you see a boost in revenue, live tax estimates so you know exactly how much to put aside for tax season. 

You can also share your bookkeeping with your accountant instantly without worrying about duplication errors, data lags or inaccuracies. Seamless, simple, and straightforward! 

Start your three-month free trial today. 
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