Demographic data is used to segment, convert, and understand people; it transforms potential leads into customers. Most companies acquire massive amounts of data, yet the majority fail to incorporate this data into usable information to drive sales. Knowing and understanding demographic data can transform the lowest hanging fruit into higher sales levels if you know how to use it.
What is Demographic Data?
Any information collected about a specific population that is used to determine whether a product or service is suitable is demographic data. This information influences pricing, position, and overall strategy for your products. These details include education, age, income, and many more statistics. Although you can always contact your customers, this data is publicly available from the Census Bureau.
Using the Demographic Data
While there are many different uses for demographic data, boosting your sales should be a target for any business. Virtually every business reaches a point of saturation when it’s in the initial market, with most customers having heard of them or purchasing from them. From there, segregation helps a company choose the best markets to enter and target. By researching your target, you’ll be able to identify customers that match similar criteria to the products you’d like to promote.
To do this, use a demographic mapping tool to plot demographic results on a map. Indicate current sales areas, along with places you haven’t tried to market. Are there a lot of people buying within the fringe markets? Are there similar characteristics within these areas? If significant numbers of people match your ideal customer demographic, focusing on these sections should be worth your time as a company.
Developing Customized Products Based on Client Profiles
The market is saturated with products, some on the affordable end of the spectrum, while others are considered a high-end brand. The difference in price point depends on the target customer. For example, an average income of $30,000 is likely not regularly buying a $5,000 pair of earrings. Establishing these products depends on the demographic data available. With insights into the average income, current employment, and overall statistics, a company can determine the probability of purchasing high-end products.
If your target location contains lower-income households, developing a cheaper, more affordable product might meet needs better than a high-end (more expensive) item. Alternatively, the marketing attached to a product may shift significantly for the two customers.
Establish Meaningful Target Groups
Knowing your audience means understanding the appeal of your product within a specific group. An eCommerce website selling clothing may optimize sales with demographic segmentation. For example, a clothing store may divide the audience into gender-based sales. A brand known for high-end products could split the demographics with new products and clearance items. Clearance items reduce prices for older items within the store, making your brand affordable to lower-income households. New products are likely in demand, appealing to brand status over the cost of each item.
Target groups may shift, depending on the perceived value of the item. Some individuals are willing to pay a higher price point for something with significant features or reliability. Other customers simply want prestige attached to status. While a company can divide the ideal customer into different groups, it’s essential to allow fluidity and monitor these changes within the mapping tool.
Using Mapping as Real-time Tracking
Demographics provide crucial insight into the market, your audience, and potential marketing objectives. By tracking this information with mapping software, your brand monitors real-time shifts and developments without spending additional resources. All research should include a current brand position within a community, highlighting current customers geographically. Once new marketing efforts are promoted, monitor the same area after a specific period to determine the level of growth.
Compare different efforts to see how specific demographics respond to marketing efforts. If the steps work well, branch out to other fringe areas with similar statistics. If the audience seems to resist (whether it’s price objection or saturated market), reapproach the market differently. This reapproach might include trying a new price strategy, a different list of product benefits, or finding another marketing method for a target audience. Establish regular intervals of evaluation overall; having a time-lapse of marketing efforts available can highlight any growth, decline, or product shifts happening within your industry.