More than 500,000 new businesses open in the U.S. every single month. Startups and entrepreneurs need to distinguish themselves amidst the static.
But how can you sell your products with so many competitors? Two words: customer demographics.
Running a successful business is about what you’re selling and who you’re selling to. Demographics refer to sociological data that tell businesses who are buying their products.
It’s essential for businesses to understand their customers. In this article, we’ll be outlining the 5 most important customer demographics that businesses should keep an eye on.
5. Occupation
Occupation can often determine spending habits, making it an important demographic metric.
Frontiers in Psychology found that those with “high risk” jobs were more reluctant to make purchasing decisions than subjects with more “white-collar jobs.”
Occupation reveals who’s more likely to buy your products based on their needs and market disposition.
4. Income
Income is an important metric, as there’s clear evidence of how much a person makes determines their spending habits.
A study by Deloitte found that income determines how households spend their money. Low-income families bought from cheaper businesses, and higher-income families bought more expensive products.
Unless a household’s income improves or worsens, they’ll spend their money the same way. Businesses can market their products or services to specific customers based on how much money they’re willing to spend.
3. Education
Education affects how much discretion a consumer employs when making a purchasing decision. This means educated customers need more convincing before they buy something.
Chances are, more affluent customers have higher education levels than other demographics. These consumers might look for more information before making any purchases.
Market research can help you identify who these educated demographics are. For more information on market research, check out this article.
2. Gender
Gender helps determines how people buy products, making it an important metric to focus on.
This study found that women were more detail-oriented with their purchasing decisions. Meanwhile, men gravitated towards more direct advertisements.
Customer data can reveal whether more men or women were engaging with your products. Businesses can then focus their marketing efforts based on each genders’ tendencies.
1. Age
As people get older, their needs change, and most people make purchasing decisions based on their age group.
Age can help define which marketing strategies businesses employ. E-commerce stores might target 18 to 35 year-olds who spend more time on their social media apps.
Age also determines how businesses engage with their customer base. Certain age groups don’t need as much information before buying a product. Companies can use more clear-cut advertisements if they have an older buyer demographic.
Leverage Customer Demographics to Boost Sales
Understanding customer demographics is important for businesses trying to increase their bottom line. Paying close attention to one or more of these demographics will give you a clearer picture of who is engaging with your product and who isn’t.
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