{"id":4011,"date":"2017-04-18T13:32:06","date_gmt":"2017-04-18T20:32:06","guid":{"rendered":"https:\/\/www.esri.com\/about\/newsroom\/?post_type=wherenext&p=4011"},"modified":"2025-07-11T04:37:28","modified_gmt":"2025-07-11T11:37:28","slug":"psychographics-market-analysis-moves-beyond-demographics","status":"publish","type":"wherenext","link":"https:\/\/www.esri.com\/about\/newsroom\/publications\/wherenext\/psychographics-market-analysis-moves-beyond-demographics","title":{"rendered":"Psychographics: Market Analysis Moves beyond Demographics"},"author":411,"featured_media":5691,"parent":0,"menu_order":0,"template":"","format":"standard","meta":{"_acf_changed":false,"sync_status":"","episode_type":"","audio_file":"","transcript_file":"","podmotor_file_id":"","podmotor_episode_id":"","castos_file_data":"","cover_image":"","cover_image_id":"","duration":"","filesize":"","filesize_raw":"","date_recorded":"","explicit":"","block":"","itunes_episode_number":"","itunes_title":"","itunes_season_number":"","itunes_episode_type":"","_links_to":"","_links_to_target":""},"categories":[],"tags":[],"department":[488812],"wherenext-category":[],"industry":[],"class_list":["post-4011","wherenext","type-wherenext","status-publish","format-standard","has-post-thumbnail","hentry","department-emerging-technologies"],"acf":{"short_description":"Companies have long used demographics to understand customers and markets. Now big data analytics promises greater insight. ","pdf":{"host_remotely":false,"file":"","file_url":""},"flexible_content":[{"acf_fc_layout":"content","content":"

Editor's note: For an inside look at how three businesses use psychographics, check out this <\/a><\/em>WhereNext<\/a> article<\/a><\/em>.<\/p>\r\n \r\n

The use of psychographics\u2014which is about the ability to connect, persuade, and influence people\u2014has entered the mainstream of high-stakes arenas, including the 2016 US political elections<\/a>. But political strategists aren\u2019t the only ones gravitating toward this form of big data analytics\u2014leading companies are as well.<\/p>\r\n

Psychographics versus Demographics: What\u2019s the Difference? <\/strong><\/p>\r\n

For decades, pollsters, product marketers, location planners, and others used US Census data to segment people who lived in the same geographic location. A typical demographic segment might include white females, 25 to 34 years old, with a yearly salary of $45,000 to $54,999. If that group were to make up a certain percentage of a city\u2019s population, a high-end fashion retailer might open a store downtown.<\/p>\r\n

But demographic data reveals little about those women\u2019s interests or aspirations, and those<\/em> are the characteristics that drive people to shop at a particular store or vote for a certain candidate. With that information, companies can target their marketing more effectively and avoid investing in less profitable geographic areas.<\/p>"},{"acf_fc_layout":"image","image":5711,"image_position":"left","orientation":"horizontal","hyperlink":""},{"acf_fc_layout":"content","content":"Psychographics broadens the scope from focusing on who a person is, to what that person believes in. Psychographics identifies lifestyle habits, values, attitudes, and other defining attributes.\r\n\r\n(To\u00a0explore the psychographics of your neighborhood, enter a location in this Zip code lookup tool<\/a>.)\r\n\r\nArmed with psychographic insight, a car manufacturer that\u2019s focused on sustainability can launch dealerships in areas where people prefer a green lifestyle. A bank scouting locations for its next branch might use psychographics to avoid overinvesting in neighborhoods where people prefer online banking. A retailer will use psychographic data to identify cities with high concentrations of outdoor-recreation lovers, then stock stores appropriately and target ads in the social media channels where those prospects spend the most time.\r\n\r\nAnalysis in Practice <\/strong>\r\n\r\nStrands of psychographic information are easy to find in the digital age. From Facebook posts, to Tweets, to online purchases, the digital trail we leave is long and can reveal much about us. But few companies have the resources to gather this data. Even if they could, they would lack the computing power to turn it into business insight.\r\n\r\nBut they know that this big data is valuable\u2014more valuable than simple demographics.\r\n\r\n\u201cDemographic data, traditionally the king of data types, is diminishing in importance,\u201d reads a recent Gartner report. \u201cOther types of data, including behavioral and psychographic data, enable . . . marketers to understand and target audiences better.\u201d\r\n\r\nSome businesses rely on marketing companies to apply psychographics to specific campaigns. Others use a geographic information system (GIS). GIS displays psychographic insight geographically, allowing executives and planners to see the makeup of a region, Zip code, or even a particular city block.\r\n\r\nThe Shopping Center Group (TSCG) has used psychographics to advise companies on their location strategies. TSCG, the leading retail-only real estate company in the US, analyzes this information through GIS-based maps, and guides clients to the locations that favor their growth.\r\n\r\nDavid Birnbrey, co-CEO and chairman of the company, says it\u2019s important to understand the psychographics of geographic locations. \u201cOur customers are savvy retailers,\u201d he says, \u201cand if we\u2019re off by an inch, they\u2019re off by a mile.\u201d\r\n\r\nIn this video, Birnbrey and his fellow executives explain how they use psychographics to help TSCG clients gain competitive advantage\u2014while TSCG has boosted its own revenue 30%."},{"acf_fc_layout":"youtube","youtube_video_url":"https:\/\/www.youtube.com\/embed\/hIzgkNuLqkQ?rel=0"},{"acf_fc_layout":"content","content":"

Insight for the Taking<\/strong><\/p>\r\n

In a presentation at Columbia University\u2019s 2016 Concordia Summit, Alexander Nix\u2014of consulting firm Cambridge Analytica, the firm that consulted Donald Trump\u2019s presidential campaign on psychographics\u2014revealed a startling statistic. \u201cWe have somewhere close to four or five thousand data points on every adult in the United States,\u201d he told the audience.<\/p>\r\n

In all that psychographic data, there is insight, but that insight won\u2019t arrange itself. Organizations like The Shopping Center Group are using GIS technology to chase it out.<\/p>\r\n

\u201cClearly, demographics and geographics and economics will influence your world view,\u201d Nix said in his presentation. \u201cBut equally important, or probably more important, [is] psychographics\u2014that is, an understanding of your personality. Because it\u2019s personality that drives behavior.\u201d<\/p>"}],"references":null},"yoast_head":"\nPsychographics: Market Analysis Moves beyond Demographics<\/title>\n<meta name=\"description\" content=\"Companies have long used demographic information to understand customers and markets. 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