Not all customers are the same, so why waste your budget marketing to them like they are? McKinsey research shows that 71% of consumers want personalized shopping experiences, and 76% get frustrated when they don’t have them. That’s where demographic segmentation comes in.
But what is demographic segmentation, exactly? We define it as a process that helps you categorize your audience into meaningful demographic groups so you can reach the right people with impactful custom messages.
Businesses across industries are partnering with Experian to power smarter decisions and better results through solutions like demographic segmentation — but what does this look like in action? This article breaks down five real-world demographic segmentation examples, showing how businesses have worked with us to drive measurable success so you can see exactly how it can work for you.
What is demographic segmentation?
Demographic segmentation involves dividing your audience into smaller, more specific groups based on shared demographics like income, education, gender, job, family status, and more to gain a more granular understanding of your brand’s target segments. The better you know your audience, the better you speak to their unique needs — and the more effective your campaigns will be, as you’ll be able to target each segment with highly personalized content that resonates.
For instance, a company might market a new tech gadget to young adults in one way while promoting the same product to families with young children in a completely different way, ensuring the message speaks to each group’s lifestyle and priorities.
Demographic segmentation attributes
Some of the most common attributes used in demographic segmentation include:
Age
Each age group has different wants and needs. A new video game might catch the eye of teenagers, while a retirement plan is more likely to appeal to someone in their 50s or 60s.
Gender
Gender impacts preference for certain products, from fashion to gadgets, so knowing who you’re talking to helps make your marketing more relevant.
Income
Someone with a higher income might be more likely to purchase premium products, while someone on a budget will respond better to discounts or value-based offers.
Education
The level of education a person has can influence what kind of messaging will resonate with them, whether it’s complex or more straightforward.
Occupation
A marketing message targeting busy professionals might differ from one aimed at students or retirees. Occupation can tell you what’s important to a person in terms of their needs and lifestyle.
Family Status
A family with young kids likely has different priorities than a single person or a couple without children. You can adapt your messaging to be more relevant to what matters most to them, like convenience or value.
Benefits of using demographic segmentation
Demographic segmentation offers several valuable benefits for marketers. Here’s why it’s one of the most commonly used and effective ways to target audiences:
- Improved targeting and personalization: Demographic segmentation powers highly customized campaigns so you can cater to different income levels, family structures, job types, and so forth. B2C brands can provide offers based on factors like age, income, and gender, while B2B brands can target by occupation to reach decision-makers.
- Better product and service development: Understanding which demographics use your product or service is a great way to inform future improvements.
- Higher engagement: With highly customized content, you can speak directly to specific demographic groups and increase engagement.
- Cost efficiency: As you target the most relevant segments, you optimize your spending around the most likely buyers and will see better returns.
- Increased conversion and retention: Relevant, targeted messaging leads to higher conversion rates, and when people feel understood, they’ll want to keep coming back.
- Clearer customer insights: Demographic data provides precise, actionable insights for refining your marketing strategy.
- Simplicity and effectiveness: Demographic insights are immediately actionable and easy to implement, which gives you a great starting point for focused campaigns.
When to use other segmentation types
While demographic segmentation provides valuable consumer insights, there are times when other approaches may offer a more effective strategy:
- Your business provides location-dependent services. If you strictly serve a local area, geographic segmentation would be more effective in targeting customers based on location.
- You have access to detailed behavioral data. If you collect data on customer behavior (like browsing history or purchase patterns), behavioral segmentation would allow for more personalized targeting than demographics.
- You’re selling high-end luxury products. While income is a useful demographic variable, factors like values, aspirations, and lifestyle better capture the desires of luxury consumers.
- Your target audience shares similar behaviors, regardless of demographic factors. Behavioral segmentation might offer more insight if your customers engage with your product or service based on shared behaviors rather than demographic traits.
- Your product or service targets specific needs or pain points. Segmenting by need or issue rather than traditional demographic variables would likely yield better results if you’re offering a solution to a particular problem (like a health-related product).
How our customers are using demographic segmentation to produce tangible results
Demographic segmentation is about knowing your audience and using data to create marketing strategies that drive measurable outcomes. Let’s look at some real-world use cases from brands like yours that have been successful in this effort, working with Experian to translate demographic insights into significant business growth.
Use case #1: Identifying customer spending potential to boost growth for a retail chain
Objective
A large retail chain wanted to understand the spending potential of each customer in their stores. Their goal was to uncover and maximize untapped spending potential.
Solution
The large retail chain licensed Marketing Attributes to identify the top demographic factors that drove spending in the retail store the previous year. The four key drivers were:
- Age
- Income
- Family structure (household composition)
- Location/region
Results
By combining these attributes to create custom segments, we uncovered two valuable annual estimates:
- Potential spend: A conservative estimate of how much a customer could spend if they reached the top 20% of spenders within their specific demographic segment (based on data from the highest spenders).
- Unrealized spend: The difference between a customer’s annual potential spend and their current spend. An estimate of how much more they could be spending each year.
These demographic segments provided the marketing strategy the retail chain used to target $1.1 billion in unrealized spend. This revealed how much additional revenue could be captured by targeting the right customers with tailored marketing and offers through demographic segmentation.
Use case #2: Helping a financial institution identify regional DE&I opportunities
Objective
A large financial institution needed help identifying regional diversity, equity, and inclusion (DE&I) opportunities. They wanted to better prioritize their outreach to underserved communities in the Los Angeles area.
Solution
We provided the data and insights to pinpoint specific areas needing attention. We used three key indices to analyze the region:
- Income index: Measured each underserved economic group by comparing the percentage of low-to-moderate income consumers against the entire L.A. area.
- Ethnicity index: Measured the percentage of consumers by ethnicity, such as African-American, Hispanic, Asian, and others, against the entire L.A. area.
- Credit index: Identified potential credit disparities by looking at the average FICO score and the percentage of customers with credit accounts against the entire L.A. area.
Results
Our client received an analytics dashboard to track and report these metrics, providing clear, traceable data to prioritize DE&I outreach. This dashboard helped them measure progress toward more inclusive practices.
Use case #3: Segmenting a health supplement ambassador program for enhanced engagement
Objective
A health supplement company wanted to identify specific segments within their ambassador program to provide better support and increase engagement.
Solution
We developed tailored customer segments to address specific needs and behaviors. These segments included:
- Young and independent: Younger, lower-income singles or starter households who are just beginning to establish their own lives.
- Families with ends to meet: Young and middle-aged families with kids who are budget-conscious, often using coupons and enjoying fast food.
- High-end families: Middle-aged families with kids and high incomes, financially secure big spenders who also give to charities.
- Empty nesters: Older households with no kids who focus on cooking at home and may have more disposable income.
Results
Segmenting at registration allowed for more effective communication and engagement with prospects. Customized messaging, guided by customer demographics and purchasing behaviors, improved acquisition and retention by helping the right messages reach the appropriate individuals through their preferred channels.
Use case #4: Comparing customer bases: Insights for a retailer across two cities
Objective
A national retailer with locations in two major cities (their home base city and a recent expansion city) wanted to understand how different their customer base was in each city. They aimed to uncover key demographic and behavioral differences to refine their marketing strategies and ensure each location received the most relevant messaging and promotions.
Solution
We analyzed each city’s customers across a wide range of characteristics:.
- Demographics: The expansion city had a younger population with more families, while the home base city had an older and more established customer base.
- Purchasing behavior: Customers in the expansion city spent more per transaction than those in the home base city.
- Preferred marketing approach: Customers in the home base city were likelier to be Brand Loyalists, responding well to familiar, trust-driven messaging. Shoppers in the expansion city were Savvy Researchers who responded better to value-based content and product comparisons.
Results
Using these insights, the retailer tailored its marketing approach to align with each location’s customer base:
- Home base city: Focused on maintaining loyalty by emphasizing brand trust and highlighting long-term customer benefits.
- Expansion city: Positioned marketing to appeal to younger, family-focused consumers to showcase high-value purchases and competitive pricing
These adjustments led to improved engagement and higher sales in both cities.
Use case #5: Optimizing direct mail to help a nationwide retailer maximize impact on a limited budget
Objective
Facing a shrinking marketing budget, a nationwide retailer needed to refine their direct mail strategy to reach the right customers while reducing costs.
Solution
We developed a comprehensive dashboard summarizing two dozen recent direct mail campaigns, which allowed the retailer to:
- Understand the demographic composition of high-response customers across different regions.
- Identify key patterns in response rates, helping them pinpoint the most receptive audiences.
- Discover that the Power Elite Mosaic Group representing affluent, high-spending households comprised only 17% of their mailed audience but accounted for 47% of responses.
Results
With these insights, the retailer restructured their direct mail strategy to target the highest-performing segments. Changes like these led to a 30% reduction in mailing costs while retaining 92% of sales, proving that strategic segmentation can drive efficiency without sacrificing revenue.
Explore demographic segmentation with Experian
Now that we’ve defined demographic segmentation and provided real-world examples, it’s time to explore how Experian data can help you better understand and connect with your audience. Experian’s Marketing Attributes provide rich, privacy-conscious insights into consumer demographics, lifestyles, and behaviors. These insights empower marketers to personalize experiences, refine targeting strategies, and make more informed decisions. With a deeper understanding of who your customers are, you can create more meaningful, impactful campaigns that drive stronger engagement and results.
Connect with us today to see how our data and expertise can improve your targeting, personalization, and campaign performance.
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by AdExchanger // Friday, March 15th, 2019 – 12:06 am “Data-Driven Thinking” is written by members of the media community and contains fresh ideas on the digital revolution in media. Today's column is written by Preethy Vaidyanathan, chief product officer at Tapad, a part of Experian For years marketers asked, “How do we get more data?” Now that they've mastered data mining, marketers want to know what’s next. The time has come for organizations to make their abundance of digital data actionable, increase ROI and reach consumers with consistent, personalized experiences across all touchpoints. A seamless consumer experience can only be achieved by consolidating digital data. Organizations, however, are finding that consolidating data silos is more time-consuming and complicated than initially expected. The challenges One of the most pervasive obstacles companies face in when consolidating data is adopting inefficient and costly tactics that quickly become outdated. For instance, over the last couple of years, many companies turned to enterprise data warehouses to consolidate data silos, but some were too expensive or poorly suited for raw, unstructured and semi-structured data. This led companies to adopt data management initiatives, which bogged down many enterprises. Perception among senior level executives is another challenge. Many still question the need for digital transformation – achieving greater efficiencies through updating business and organizational processes with new technologies. Gartner found that more than half (54%) of senior executives say their digital business objective is transformational, while 46% say their objective is optimization. Digital transformation and data consolidation require time and effort. So, many large organizations work to overcome data silos as part of a multiyear digital transformation versus an immediate action item, delaying the benefits the company sees from taking on this project. All of these challenges make delaying progress in data consolidation easy, but companies should remember the impetus for doing so: creating a seamless customer experience that, in turn, drives business results. Brands with higher quality customer experience grow revenue faster than direct competitors with lower quality customer experience. The approach Many brands go into the digital transformation process assuming they have massive amounts of customer data, and that much of it is valuable or will be in the future. They might spend months aggregating that data in data stores or data lakes – at great expense. The trouble is that their data was scattered across multiple databases, which means it’s highly fragmented. As a result of this fragmentation, marketers can’t activate their data in ways that enhance the customer experience. To do so, companies must ensure their digital data is highly flexible so it can provide a holistic view of the consumer journey across every digital, in-store, in-venue and offline channel. I’d recommend that organizations taking on data centralization initiatives prioritize use cases that offer the company the greatest benefit. This is where organizations should establish a “crawl, walk, run” approach to data centralization to ensure key executives buy into the process. Starting with a subset of use cases, such as customer retention or upsell, or with a campaign, which is an even smaller starting point, allows executives to see the benefits of data consolidation projects relatively quickly. Once they validate these initial benefits, they can expand the range of use cases or campaigns, as well as the marketing ROI for their business. While data centralization is a long-term project that may take several years to complete, it doesn’t mean a business can’t get started now and see measurable results quickly. Break down data consolidation into stages so the organization can experience wins along the way. At the end of the day, data consolidation will help organizations deliver more effective marketing campaigns that drive business growth. Contact us today
Tapad's technology enhances Bidtellect clients frequency capping and audience extension capabilities cross device. NEW YORK, Feb. 28, 2019 /PRNewswire/ — Tapad, part of Experian, is a global marketing technology company and leader in digital identity resolution solutions, today announced a new partnership with Bidtellect (now Simpli.fi), a leading native Demand-Side Platform (DSP). Bidtellect's paid content distribution platform will leverage The Tapad Graph™ as its first cross-device partner. The integration will offer Bidtellect's clients in the U.S. and Canada cross-device frequency capping and enhanced audience extension capabilities. The combination of Tapad's leading cross-device technology, with Bidtellect's unparalleled scale and optimization capabilities, will allow content marketers within brands and agencies to develop even more strategic, effective content marketing campaigns. The Tapad Graph™ will allow content marketers to gain greater reach and create more relevant, unified messaging with targeted delivery, when used in conjunction with Bidtellect's technology. Marketers can expect to benefit from amplified reach, and enhanced, privacy-safe engagement with desired audiences as a result of this partnership. "Partnering with Tapad, the leaders in cross-device data, provides Bidtellect with a complete solution that leverages both probabilistic and deterministic mapping strategies," said Mike Conway, Chief Technology Officer at Bidtellect. "The Tapad relationship expands our audience size by providing the opportunity to reach the same user across multiple devices and, when used in conjunction with our frequency capping functionality, ensures increased reach, reduced ad saturation, and elimination of wasted ad spend." As the partnership progresses, Tapad will also work with Bidtellect to provide advanced attribution for conversions and engagement metrics including connectivity and amplification. These advanced insights will help brands and agencies develop a more holistic approach to content marketing, so they can build audiences and influence bidding algorithms that directly impact their business. "We're thrilled to be working with Bidtellect as the company's first cross-device partner," said Chris Feo, SVP of Global Data Licensing and Strategic Partnerships at Tapad. "At Tapad, we are continuously advancing our identity resolution solutions to keep pace with the ever-changing needs of marketers. As a part of that commitment, we look to work with partners where our technology is able to enhance their offering to better serve marketers. We are looking forward to creating that superior experience with the Bidtellect team." Contact us today
The Tapad Graph Now Offered in Adobe Audience Manager, part of Adobe Analytics Cloud New York, NY — August 7, 2018 — Tapad, now part of Experian, is advancing personalization for the modern marketer, announced today that its proprietary Tapad Graph is now integrated with Adobe Audience Manager, part of Adobe Analytics Cloud, helping marketers expand their view of consumers and boost results through Tapad’s probabilistic solution. Tapad has been working closely with the Adobe Audience Manager team on this integration. With the Tapad Graph integration, customers based in the U.S. and Canada can use the Tapad Device Graph to expand the reach of audiences defined and activated in Adobe Audience Manager to extend first- and third-party data and deliver personalization across paid, earned and owned channels, publisher sites, programmatic, and more. Tapad worked closely with Adobe to develop the integration, allowing marketers to enable first-party data that has been previously tied to cookies and mobile. This offering has been beta-tested by leading organizations across retail, financial services, telecom providers, and more. “We're excited to publicly announce the solution our team has been closely designing over the past 12 months with Adobe,” said Chris Feo, SVP, Global Data Licensing and Strategic Partnerships at Tapad. “This solution will give marketers in the U.S. and Canada the ability to unlock increased value from Adobe Audience Manager through the power of the Tapad Graph and its ability to expand customer prospects.” Tapad has repeatedly proven its ability to provide marketers with a unified view of the customer across channels and screens. With the Tapad Graph, a global identity graph that currently supports more than 100 enterprise customers and 200 integration partners, marketers can extend their reach and customize messages based on user and household-level data. Contact us today