3 ways to use demographic data (and how to move beyond it)

Using demographic data to better understand your customers is a great stepping stone to building your business. Initially, the amount of information that can be gleaned from pure demographics can help to shape the start of your marketing strategy, your product offerings, your geographic focus, and more. 

But demographic data has its limits. Let’s examine what this data can tell you and why you’ll need to move beyond it to allow your business and revenue to truly expand.

3 uses for demographic data

Demographic data is often gathered by websites using third-party cookies. This data is multi-faceted, but really has three key uses for brands.

1. Establishing customer groupings

Demographic data examples include age, gender, household income, and ethnicity. By analyzing this data, you’ll quickly get a picture of your most common customer. How old a customer is informs you about what stage of life they’re in, while gender and ethnicity might point to the different ways or reasons that they use your products. Knowing their household income helps to determine which of your products they can most afford.

Grouping customers together based on demographic data makes it easier to market to these customers and design marketing messages that will speak to each group. This will lead to finding the most appropriate channel to reach them, and ways to enhance your product to continue to meet their needs.

2. Planning for the future

Demographic data can also be used in research to help plan business growth in the future. For example, opening a new store location might make sense after observing customer growth in a specific geographic region. 

As your customers age, you can also use this data to track their buying habits and determine ways to increase a customer’s lifetime value (CLV). Do you notice that buying drops off at a certain age? This could lead to developing a new product to meet an aging customer group or simply re-marketing an existing product to bridge the gap. 

3. Targeting your product offerings

By continuing to track the demographic data of your customers and match them with their buying habits, you’ll build a clear picture of what truly speaks to them. This makes it easier to determine what products don’t work, what products you should develop, and what products might be missing from your inventory. 

Move beyond demographic data

It may appear that demographic data gives you all you need to reach customers, but in reality, it gives you only what sits on the surface. With the introduction of advanced online tracking and targeting methods, brands and marketers have been able to move beyond demographics and into behavioral data.

The case for behavioral data

Behavioral data paints a more robust picture of your customers. It uses information like engagement, site visits, transactional data, and geolocation to tell a better and more complete story than just demographics. 

As we’ve discussed previously, marketing campaigns that are run solely on demographic data are 20% less predictive, while campaigns using behavioral data are 86% more predictive. This means when you use behavioral data, there’s an almost 9 out of 10 chance that the customers you’re targeting are going to take the desired action (i.e., buy the product, make the call, fill out the form). That is a huge discrepancy and almost makes the case for behavioral data by itself.

However, even using behavioral data and all of the added insights that come with it doesn’t truly encompass the totality of the customer’s journey. The true value of customer segmentation comes when using both demographic and behavioral data to lead to more personalized marketing. 

Making demographic and behavioral data work together

Behavioral data is also gathered by third-party cookies but relies more heavily on first-party cookies as well. By pulling both types of information, websites can build a more robust picture of who customers are and get more specific about their actions and behaviors. 

The best results lie in the combination of both types of data—demographic and behavioral. Personalization will be the key to reaching customers online as the ways to track consumers change, and as consumers continue to learn to tune out all of the digital noise they’re presented with daily. 

Use a consumer data expert

More than ever, businesses must learn how to develop a message that speaks directly to customers—not groups of customers, but customers individually. And this type of audience analysis is easiest when working with a customer data platform (CDP). 

Most customer information gathered by businesses lives in a few different repositories throughout the organization. Website visitors and their demographics live with your website provider or analytics tracker (i.e. Google Analytics). Your in-store or online sales information lives in your POS. And how people respond to emails you send or your social media posts live in a different system too. 

Combining all this data is how you’ll truly get a complete picture of each of your customers. It’s how you move beyond demographic data and find the true value in your audience. 

Use Lytics to move beyond demographic data now

Audience data experts like Lytics work with companies, across their marketing technology stacks, to unify this data and breathe life into each of your customers. They provide cohesive audience segmentation while also helping to develop campaigns based on personalization. To find out how Lytics works, book a 30-minute introductory call or a product demo today. Learn how leveraging your demographic and behavioral data can lead to business success.