What is Psychographic Segmentation?

What Is Psychographic Segmentation

A key ask of running a successful business is customer satisfaction. 


Customers are the backbone of any business and their aspirations matter the most. But the problem is that all customers are not the same. They vary significantly in their tastes, preferences, lifestyle, and other characteristics. Also, their wants keep evolving from time-to-time. Understanding these changing demand trends too is very important for a business owner. 


Old adage – Birds of a feather flock together. A considerable degree of similarities may be found between certain groups of customers. Based on defined metrics viz. customer psyche, lifestyle etc. they can be segmented into distinct groups. This segmentation is termed as Psychographic Segmentation. It segregates customers based on their likes, dislikes, lifestyle and other such attributes. It aims to understand the reaction of the entire segment when subjected to a certain action. What, why, how & when a group reacts in a particular manner are key questions underlying Segmentation.  


A few key touchpoints to segment the customers are as follows:  

Economic Status 

Economic Status

Economic factors govern the buying capacity of customers significantly. A person has ample desires, but all can’t be fulfilled. Businesses take advantages of these factors. Some premium products are manufactured only for the elite sections of the society.

Such products are usually branded and possess unique features to lure buyers. The rich take it as a trademark of their profound respect and buy the product. On the other hand, there are products that are not awfully expensive but enough for an average person. They are made to provide the needed functionalities but at a reasonable price. Now imagine, in the absence of customer segmentation, if you advertise the premium product to a commoner and the inexpensive one to a rich person … It would be a lost deal, wouldn’t it? The average person would not have the resources to buy the premium product even if he is longing for it. And the rich will not prefer to buy the cheap product since it is being used by all. Psychographic Segmentation helps by highlighting the right set of products for the right audience! 


Lifestyle Practices

Something which truly influences our thought process is our lifestyle. Different sets of people have varying lifestyles. The way of living that we adopt also determines how we react or respond to a particular stimulus. Thus, deep diving into a person’s living habits is critical for understanding their psychology.

  • Some people prefer simplicity, while others seek luxury. There are people, who take the middle path too. Understanding the demands of different segments will help your business offering. The choice of color, contrast, look and feel of any item would vary from segment to segment. Simplistic people tend towards lighter shades and refrain from gaudy or loud objects. The luxurious are quite fussy and may prefer comfort. They like choosing things that speak of their posh status. And then there are people whose choice varies from product to product. They prefer things that are not overly showy or too simple. Targeting the apt group for a certain product makes it a win-win for everyone. 


People may be divided into three types of personalities-introverts, extroverts and ambiverts. All three have their own pros and cons but that is not the topic of our discussion. Understanding personality traits helps us to relate an individual’s likely course of action in different circumstances. 

An introvert would like something which gives him solace; something which makes him feel happy and content. An extrovert may like something that helps him in socializing, interacting, and reaching out to others. Ambiverts could prefer things that enrich their creativity, let them interact with others and with themselves too. Moreover, our present state of mind also affects our decisions. Someone who is happy and elated will react differently to a situation as compared to someone who is sad and sorrowful. People vary in stress-handling capabilities too. All these factors combine to form the personality of an individual.

Activities, interests and opinions

Activities, interests and opinions (AIO)

Every individual performs certain activities, has interests and opinions on different matters. These three parameters are collectively called AIO. For example, since childhood, people are trained to act as per their cultural and traditional backgrounds. 

They are inspired to maintain the heritage that they are a part of. Hence, these occupy an imminent position in a person’s life. Thus, the opinions and interests of people belonging to a cultural background may differ from others. Point in case – People belonging to the Middle East have an affinity for gold ornaments and all-enveloping loose clothes. People of the Western countries like minimalistic, light-weight jewelry with stylish dresses. An employee may choose formals, while a fashion-influencer will have his own choice. A priest could be fond of religious hymns whereas a Rockstar may love rock music.

Age and Gender

Age and Gender

Segmentation based on age and gender is not new. Since ages, people have been observing the psychological effects of such biological factors. A teenager would choose differently from a middle-aged or an elderly person.

Females are more driven to perfection than males, who are likely to be more dynamic, at the same age. These aspects create a profound effect on the decisions undertaken. 


There are so many aspects involved in psychographic segmentation. It subsumes demographic or behavioral segmentation. Products and services can be tailored to suit a target segment. Product Segmentation can be the cherry on cake of your business.