One of the hot new buzzwords in marketing and prospecting in recent years is psychographics, or psychological metrics. The term was popularized by William Wells in his 1975 article for Journal of Marketing Research, titled “Psychographics: A Critical Review”. 40 years later, it experienced a resurgence in popularity after a Harvard Business Review article on the topic. But what is it exactly, and how can it help you with converting leads into prospects, and prospects into opportunities?
The Difference between Demographics and Psychographics
Sometimes people conflate demographics and psychographics, but much like sales training and sales coaching, they’re not interchangeable terms. They refer to different things and have unique objectives.
Demographics is the discovery of who your prospect is. It looks at things like age, gender, race, location, employment, income, etc. These are useful tools when crafting the ideal customer profile but aren’t enough in and of themselves to maximize your conversion rates.
Psychographics seek to find out why your prospect thinks and acts the way they do. Under its purview are what’s called the IAO variables – Interests, Activities, and Opinions. In other words, what is your customer interested in or want to find more about? What do they do or like to do beyond their profession (which is a demographic trait)? What are their attitudes, values, and even cognitive biases?
Psychographics and demographics work together to help you create buyer personas and ideal customer profiles. In combination, you can learn who your customers are, what behaviors they take, the psychological factors behind their purchasing decisions, and potential avenues of approach.
How Understanding Psychological Profiles Can Help You Convert Sales
All of these things involve quantities that can sometimes be hard to measure and fix a precise metric for, but they’re critical for understanding how to sell to different buyer personas.
For example, say you’re a sales rep for a Turkish rug company. On the same day, you have two women, Betty and Veronica, who demographically are the same – white, middle class, stay-at-home moms in their late 20s. If you only knew their demographics, you might try to sell to them in the exact same way, because you aren’t aware of their psychological profiles.
Now let’s take the same situation and those same two customers, with psychological market research added in. From your profiles, you know that Betty is conservative, values items that last a long time before needing replacement, is budget-minded, and travels domestically. Veronica is liberal, and before becoming a SAHM, was a globe-trotter who always went abroad for her vacations. She also isn’t price-sensitive the way Betty is. While their demographics are the same, these two women couldn’t be more different in terms of their buying psychology and motivations.
Therefore, in selling Turkish rugs to them, you take on different tacks. With Betty, you sell her on the durability of the rugs, which can last decades with proper care – literally a lifetime, and need much less cleaning time and frequency, as opposed to a cheap synthetic rug, which wears out after a couple years, yellows quickly, needs more cleaning, and is hard to eliminate odors. In other words, the long-term value that makes a Turkish rug actually cheaper over time than a synthetic rug – which overcomes Betty’s price sensitivity. You’d also want to concentrate on a more modestly priced item that still fits her needs.
With Veronica, you would highlight the Turkish origin and paint a picture of reminders of Istanbul — the stained-glass beauty of the Blue Mosque, the spices of the bazaar, etc. It’s a way for her to look at the work of art on her floor and be reminded of all the wonderful memories of her international travel. You would also likely recommend options that may be more expensive; with richer, more beautiful dyes, due to price not being an especially important value to her.
Now, if you didn’t know their motivations and sold them the same way due to their matching demographics, you would probably lose at least one sale. If you sold on the long-term value, Veronica might not feel a sense of wonder or excitement about the rugs and buying experience and go elsewhere. If you sold on the enchantments of Turkey and the thrill of travel, Betty wouldn’t be at all interested.
Whereas with psychological profiles and the different approaches, you can sell according to their psychological motivations and potentially capture both sales. At the very least, you don’t provide either one a negative buying experience, and in doing so, ensure you and your employer’s reputation stays intact.
How to Build Psychological Profiles
The foundation of psychographic use and psychological profile construction is often achieved through data mining of social media activity, online purchases, the use of personal digital assistants like Siri or Alexa, GPS coordinates, credit card use, and other factors that make our lives more convenient but also less and less private. This massive data collection of consumer past and present buying behavior is then fed into algorithms that create predictive analyses of future behaviors and interests. The psychological profiles created from the raw material data are not only used to forecast future behavior, but to craft ideal customer profiles and buyer personas.
What if you’re a sales rep who doesn’t have the advantage of data mining? Then you need to rely on careful qualifying questions designed to elicit information. For example, one of the first questions you could ask Betty and Veronica after your initial greeting is to ask if they’ve ever been to Turkey. Betty would say no, Veronica either yes or no depending, but would likely volunteer her other international travel experiences. That single question provides you key information to start constructing a psychological profile on that spot.
Psychological profiles also pair well with social selling – research of a prospect’s social media sites can both help construct a profile and provide opportunities for social media engagement as part of the social selling process.
Paying attention to and creating psychological profiles of your prospects and customers will help you to devise your ideal customer profile, construct various buyer personas, and develop approaches for holding qualifying and conversion conversations with prospects to maximize your close and sales rates. Ignoring them runs the risks of missed conversion opportunities and lost sales, verifying that, as many other thought leaders have commented, psychographics really are the secret ingredient to bring all your prospecting and sales efforts to fruition.