Understanding Demographics and Its Huge Importance in Marketing

What is Demographics?

Demographics is a term that is frequently used and heard of in the marketing sector. Most modern-day organizations and businesses, no matter how big or small, use demographic data in their marketing campaigns. Whether you own a business or are planning to build a career in digital marketing, it's essential to understand what demographics are and their importance in the field of marketing. If you don’t already know about these things, then you’ve come to the right place as well be covering all about demographics and their role in digital marketing in today’s post.

In simplest words, demographics is a collection of all sorts of socio-economic data about a large group of people. It’s important to focus on the word ‘socio-economic,’ as demographic data refers to various social and economic information about people.

At a basic level, social data includes age, gender, and nationality. On a deeper level, social data also includes educational background, marital status, ethnicity, profession, and even things such as the number of children if applicable, religious and political affiliation, etc. Economic data includes financial aspects such as income, class (upper, middle, or lower), living standards, etc.

Now the thing about demographics in marketing is that there is no hard and fast rule or a fixed list of data to collect. It’s up to the business or marketing organization to figure out what sort of data about a group of people is useful to them.

For example, a real estate agent will be interested in knowing how many people in a certain area already own a property and who are the people who stay in rented homes. So they can add this factor in their demographic study. But that same information is pretty much useless for a fashion and clothing company.

The next thing you need to know is what to do with such data and why you need it. The whole concept of demographics in marketing focuses mainly on two things:

  • Collecting socio-economic data about many people. Then grouping a larger population into smaller segments based on similar factors, such as male vs female consumers or teens vs adult buyers.
  • Analyzing the characteristics and behaviors of these different groups of people. Then using that info to build specific marketing plans to target those particular groups.

To sum things up, the whole idea of demographics in marketing is to divide a larger population of consumers into smaller groups based on similar socio-economic factors, analyze and learn their behavior, preferences, and needs. Then finally target them with products and services accordingly.

Three Huge Advantages of Demographic Data in Digital Marketing

Advantages of Demographic Data

Let’s face it – marketing and advertising demand a lot of effort and money. Of course, technology and modern digital marketing techniques make things quite convenient. But you still need to put in your money and time to make your marketing techniques work.

Now, if there was a way to get more sales and more revenue while decreasing the money and effort spent on your marketing campaign, wouldn’t you jump at such an opportunity? Well, that’s basically what demographics helps you to achieve.

Instead of promoting your products to anyone and everyone, you can go for a more targeted approach if you can break down the population into smaller groups and focus only on those people who are more likely to buy whatever it is you wish to sell to them.

So by now you already know what are demographics in marketing. Thus, let’s take a look at all the benefits of demographics in the world of digital marketing.

More Sales, Fewer Expenses

As we said above, once you divide the overall population into demographic groups, you will have a good idea about which group your main audience is. Targeting your marketing efforts towards just a smaller group of people is cheaper than advertising to everyone.

And you’re not just cutting down your expenses. Since you are specifically focusing on those groups of people who are more likely to associate with your product or service, you will get more conversions and sales, which will boost your revenue. Just like killing two birds with a stone, you can reduce your expenses as well as increase your revenue simultaneously.

Let’s take an example of a kidswear online store. If they decide to post Facebook and Instagram ads, it will cost them less to target their ads only towards people who have children. And someone with kids is likely to purchase kidswear compared to those who don’t have kids or aren’t even married.

Helps to Build More Efficient Marketing Strategies

Wouldn’t it be a lot easier to sell something if you already know what different types of people are looking for and are interested in? Demographic data can help understand people’s buying preferences and what products or services they are interested in. So businesses can use that information to build their marketing strategies around their target audience and their needs, preferences, and interests.

For example, if you’re selling beauty accessories and cosmetics, products such as skin tightening creams and wrinkle removers will be actively advertised to females. Similarly, more expensive and high-end beauty products could be promoted actively to people with higher earnings. So knowing the demographics of your audience helps you to prepare better marketing strategies.

Helps in Retaining Customers

A successful business is not just about getting new customers but even more so about retaining your existing customer base. And demographics helps you do that efficiently. Knowing the socio-economic status of your customers helps you communicate better with them. You can promote products that you know will grab their attention, and they also realize that you are aware of their needs. They will prefer coming back to your products and services time and again as a result.

Another important info you can collect from customer demographics is who your most loyal customers are. Then you can work on varying levels of strategies, prioritizing more on loyal buyers. For example, knowing your customers' purchase history, you can group the most frequent buyers and reward them with special offers. So whether it’s about retaining your best customers or just holding on to all customers in general, demographics are extremely useful for it.

So we hope you now have a clear concept of demographic data, what are demographics in marketing, and why they are essential. However, one final thing you need to know is how you collect demographic information. Always maintain ethical practices where your customers are aware of the different data you collect and ensure that you keep such data secure and protected.