A complete guide to demographic segmentation

As marketers, we need to understand our audiences deeply to effectively sell to them. Demographic segmentation is a tool marketers can use to better understand their target market. Demographics define who people are within your target market and divide them into smaller groups based on shared characteristics, such as age, gender, and income level.

Marketing demographics and segmentation enable marketers to identify efficiencies, increase personalization, and build customer loyalty. Read on to learn about why demographic segmentation is worth it for your business.

Demographic segmentation divides a target market into smaller groups based on shared characteristics, such as age, gender, income level, education, and family size.

Segmenting your market into smaller groups allows you to create more personalized messaging, tailor products or services to specific needs, and improve the efficiency of your marketing campaigns by focusing on the audiences most likely to convert. 

Specific categories of people become target demographics for marketers, enabling them to sell to these groups more effectively. It assumes that smaller groups have similar preferences, making it easier to sell to them.

Demographic segmentation enables marketers to be more specific about their target market. Demographics include age, income, occupation, and other similar variables that describe a group of people. 

Some of the most common reasons businesses use demographic segmentation include: 

Demographic segmentation can be extremely impactful for a business’s marketing strategy. It helps marketers understand their target audiences like the back of their hands. Let’s take a closer look at some of the advantages of segmenting by demographics. 

By using a survey, marketers collect data that is specific to their business goals. Marketers can design a custom survey or use an existing template.

In addition to surveys, government agencies like the Bureau of Labor Statistics provide household, income, education, and health data used for marketing strategies and business goals.

Because of the widespread use of smart devices, granular data is available from apps that collect a wide variety of data, including photos, travel patterns, hospital wait times, and virus contact tracing. Now in use for complex clinical trials or academic studies, these apps capture vast amounts of demographic data at a specific point in time or over several time periods.

Marketers speak to their target audience using messages that appeal to their specific demographic segments. Having a strong understanding of their demographic segments will allow marketers to create key messaging content that speaks to their target audiences and forms the basis of their marketing strategy.

Marketers use these concepts to develop a consistent flow of marketing campaigns, ads, social media posts, packaging, and other messaging that raise customer awareness. Messaging must be consistent across all channels to demonstrate the value their brand provides to their target market.

A consistent brand position will build value for a company. For instance, Amazon, Microsoft, and Spotify are three of the biggest growing brands that provide the value their target markets desire: empathy, agility, and affinity. Microsoft empathizes with customers’ needs, providing them with leading software products.

Amazon customers like agility, the ability to quickly adapt to changing times and new products. Spotify customers are incredibly loyal, creating an affinity relationship with Spotify's music service.

Over 95% of new product launches fail. Companies that use demographics to define their target market and create consistent messaging have a greater chance of survival.

U.S. advertisers spend over $250 billion to get our attention. Companies like Amazon, Procter & Gamble, and Walt Disney (three of the biggest advertisers) want to make sure they advertise to the right people.

For instance, the Walt Disney Company might appear to target children, but it targets the entire family, including children, tweens, teens, and adults. “You’re dead if you aim only for kids. Adults are only kids grown up, anyway," said Walt Disney.

Surveys can be used to identify specific demographic groups and understand their purchasing behavior, including how much they will pay and how frequently they will buy your product.

Companies with existing products frequently use surveys to see how their customers’ buying behaviors change or identify new market trends. By analyzing survey data across different demographic segments, companies can invest their resources in the right products and target the right audience segments.

There are a handful of types of demographic segmentation to consider. These include age, gender, income, occupation and employment, ethnicity, geography, education level, and marital status. 

Age is usually an indicator of customer preferences. However, to avoid asking for personal data, surveys ask people to identify with an age range. Sample answers include:

Surveys can be structured to collect data about one person or an entire household. Marketers like to know how many people live in a household and what their ages are. Family size and age ranges help marketers understand household habits and buying preferences across various age groups.

Survey respondents are frequently categorized by generation. Gen X, Millennials, Gen Z, and Baby Boomers all have different preferences and attitudes. Companies use generational demographic variables to create marketing messages, packaging, and campaigns that appeal to specific age groups. For instance, young age groups are typically more familiar with technology, but Baby Boomers may need less tech and are less interested in it.

Sexual Orientation and Gender Identity (SOGI) questions ask for personal information and should be carefully considered. Understanding and communicating your survey’s purpose is critical to help people feel comfortable answering these questions.

Depending on the nature of your survey, gender questions may include:

Gender can make a difference in both B2C and B2B marketing. For instance, one study showed that when women attend a business event, they want to be inspired, educated, and network with peers. However, men like business events to find out about the latest and greatest products. 

Understanding the gender of your audience will impact how successful your product, service, or event will be. Marketers are also using these questions to become more inclusive and develop products designed for SOGI differences.

Related reading: How to ask gender survey questions

Income plays a vital role in determining if people can afford a company’s products, especially for luxury goods retailers targeting upper-income demographics. Income questions can include:

Marketers use income demographics to target their advertising, especially for high-end products. For instance, the Tesla Model X targets male customers who earn over $143,000 per year, over twice the average U.S. household income. Companies target their product design and marketing campaigns to people who can afford a luxury car with a high price tag.

Occupation demographics indicate if a person is employed, to what extent, and what occupation they pursue. Employment refers to the frequency with which a person works, and occupation describes their field of work. Companies can design custom surveys or gather public data from the Bureau of Labor Statistics.

A person’s occupation and role indicate their specialized skills and how they make money. Employment shows how consistently they are working in their occupation. Based on these two factors, marketers use this information to define their target market’s income level and professional interests.

B2B marketers rely heavily on occupation demographics to target customers with specific professional skills or interests. In B2B marketing, occupation and role define what industry they work in and their decision-making ability. B2B marketers target people who make buying decisions, making their role or title an essential demographic.

Understanding a group’s ethnicity helps to create products that appeal to their common beliefs and interests. Potential questions include:

Marketers can position new products and services to these ethnic groups, including food, cosmetics, and personal items. According to research, Black, Asian, Latinx, Native American, and multicultural groups are all expected to have increased buying power.

Geographic demographics segment buyers based on where they live. These regions can be as large as a country or as small as a zip code or a neighborhood. Typical questions include:

Preferences vary by region, giving marketers a better opportunity to tailor their products and services. Country and regional differences influence how marketers develop and sell their products.

Direct mail advertising uses zip codes to target potential customers for local retailers. These businesses can focus their ad budgets on residents and income levels who are likely to purchase their products. Geography can indicate a person’s income level and preferences, allowing marketers to target their audience better.

Education demographics can include the education level, languages, and occupations of the respondent and their family members. A typical survey question and answer options include:

What is the highest level of school you have completed or the highest degree you have received?

Education demographics are critical for media and book publishing companies. In general, the more educated people are, the more often they read. In 2019, over 90% of people with a college degree or more read books. However, only 75% of those who had some college and 61% of those who attended high school read books.

Marital status influences people’s preferences and buying habits. Typical survey questions include:

Marital status may influence income and decision-making. For B2B marketers, this demographic data is critical to realtors, construction companies, and appliance manufacturers who need to tailor their products to this demographic.

Marketers create more specific demographic groups by combining marital status, age, income, and other variables. Life stages are a type of demographic segmentation example that includes:

Now that you understand what demographic segmentation is and why you should do it, you’re probably wondering how to collect the data you need. There are several methods to gather relevant information for demographic segmentation. 

Online surveys are one of the best ways to gather demographic information from your target audience. Surveys are a reliable data collection method frequently used by businesses to segment their audiences.

With surveys and questionnaires, you can directly ask customers about their age, gender, income level, education, and other relevant characteristics. 

With SurveyMonkey, you can easily design professional surveys, distribute them across multiple channels, and analyze the results in real time.

You can utilize website tracking and app usage analytics to gather valuable demographic information, including geographic location, device type, and browsing behaviors. This data can provide important insights for marketing teams.

Additionally, integrating surveys into digital touchpoints can help address gaps by collecting more specific details.

Customer relationship management systems (CRMs) and databases offer a wealth of demographic information. Combining insights from your CRM with survey responses provides a complete picture of your audience. 

Social media platforms have built-in analytics that can highlight demographic trends among engaged users to inform your marketing strategy.

Advanced SurveyMonkey tools allow you to go beyond surface-level metrics and collect meaningful demographic data directly from your target audience. Whether you’re building buyer personas, testing new product ideas, or refining your campaigns, SurveyMonkey makes it easy to gather, analyze, and apply the insights that matter most.

Surveys are an easy way to collect demographic data. They are available in our survey templates to ensure the results meet your project’s needs. Demographic segmentation questions include the following.

In addition to demographics, you may also use psychographics, behavioral, and geographic questions to categorize people. Marketers combine the answers to these questions and create groups of people with shared attributes and preferences. Based on these groups, they will clarify who their target market is and define their buying preferences.

Demographic or market segmentation refers to breaking down a larger group of people into smaller segments with similar needs, requirements, and interests. Companies may use different methods to group their segments apart from demographics, including psychographics, lifestyle traits, and customer behaviors. The goal is to find common characteristics that represent your potential customers.

Demographic targeting involves advertising to specific groups based on their demographics to reach the most receptive audience. A target market allows companies to focus their resources, perform in-depth market research, and create the ideal messaging and packaging that will appeal to them.

You can easily analyze your survey results and sort responses by demographic variables using SurveyMonkey’s tools to understand your data and create insightful results. 

When designing your survey, think about how you want to filter your results. If you wish to group on specific demographic variables, you can include a question in the survey that will allow you to filter by that group.

For example, if you want to understand the income levels associated with a zip code, you can filter for those demographics.

You can use single or multiple filters. Filter types include:

The Compare rules feature lets you choose two or more answer options from a single question and view them side-by-side. This feature is valuable for demographic variable analysis, easily comparing data that clarifies your target audience.

For example, if you include a question in your survey asking people their age, you can create a compare rule to view each age range’s results. This will show how different age groups responded to questions in your survey.

As part of our paid feature, Crosstab reports let you choose questions and answer choices to display in a table for easy comparison across multiple questions and share them with other people. A table shows how many times an answer choice was selected, the percentage of responses, and the total number of responses per answer choice.

If you want to compare two or more answers from a single question, you can use a compare rule. Crosstab reports are best when you want to compare multiple questions and answer choices all at once.

Demographic segmentation is a key strategy for reaching your target audience effectively. Understanding your customers, their needs, wants, and preferences, allows you to target them profitably.

Our expert solutions and research services set your business up for success. Now that you understand how demographic segmentation works, it’s time to put it into practice. Get started with SurveyMonkey Audience today!