An Introduction to Financial Psychographics

Welcome to the inaugural blog post of Psympl Answers.

Psympl is dedicated to uncovering deep consumer insights to inform the strategies and marketing efforts of stakeholders in the industries we serve. Our initial focus will be on the financial services and wealth management industry. We partnered with Ipsos, one of the largest and most credible market research firms in the world, to conduct a comprehensive study of consumers' approaches to investment and money management. In this series of articles, we'll be sharing data and insights from this market research to guide financial advisors and RIA's (Registered Investment Advisors) in marketing for new client acquisition and enhanced client engagement for loyalty and retention. Along the way, we will challenge assumptions about what current and prospective clients want in advisory services.

Psympl's Market Research

A primary objective of Psympl's market research was to identify a psychographic model that explains consumers' decision-making processes and investment behaviors. Psychographics pertain to people's attitudes, values, beliefs, fears, personalities, and lifestyles, which are core to their motivations and priorities. Whereas demographics (e.g., age, gender, ethnicity, etc.) and socioeconomics (e.g., income, net assets, education, etc.) define WHO a person is, psychographics identify WHY people do what they do.

What is Psychographic Segmentation?

Psychographic segmentation groups people according to shared psychological characteristics and enables more efficient targeting and engagement with marketing and propositions that resonate with the individual. It's a powerful approach used by leading retail and consumer products companies, such as Procter & Gamble, Walmart, CVS, and even Porsche. These companies use psychographic insights and segmentation to inform marketing campaigns, package design, user experience, and other elements of their products and services. The founders of Psympl pioneered psychographics in healthcare achieving significant results in marketing and clinical applications, such as new patient acquisition, healthy lifestyle modification, and even getting patients to pay their bills for Revenue Cycle optimization.

How has the Financial Sector Used Psychographics?

Financial and insurance companies have leveraged psychographics to great effect. For instance, GEICO employs psychographic segmentation to delve deeper into consumer lifestyles, values, and preferences. The company focuses on consumers' attitudes toward saving money and financial security. Chase Card Services used psychographic segmentation along with demographic and socioeconomic variables to design and market its Sapphire card, which exceeded expectations.

An effective psychographic segmentation model takes significant resources -- money, time, and consumer science expertise -- which many financial management firms may not have readily available. Specifically, a comprehensive psychographic study could cost well into six figures and take six months or more to design, execute, and analyze, and the success rate is only 50% (based on the author's 20-year career at P&G), which is why consumer science expertise is critical. However, a successful psychographic model can produce results that far outweigh the costs.

5 Distinct Financial Psychographic Segments

Recognizing the opportunity for the financial services/wealth management industry (and to eliminate the risk and costs of developing a psychographic model), Psympl invested in this market research and identified five distinct psychographic segments, each with a unique approach to finances and investing:

Each psychographic segment is motivated by different things and responds to different messaging and propositions. These insights carry through the words to use (and avoid) in marketing and client engagement, as well as imagery, communication frequency, and channels.

How Psychographics Help With Personalization

Psychographics can help financial advisors/wealth managers personalize and optimize all channels of current and prospective client engagement, including:

• Email
• Text Messaging
• Call scripts
• Social Media
• Print advertising
• Digital advertising
• Any method of communication using words and/or images

However, the topic will dictate the best channel(s) of communication. For example, a certain psychographic segment may prefer email for market updates but a phone call for a meeting reminder.

While most people would agree that a one-size-fits-all marketing campaign will not be as effective as a personalized approach, it may be overwhelming to consider the development of five different versions of each piece of communication. First, depending on a financial advisor's desired target audience and marketing objectives, engaging all five psychographic segments may not be necessary. One or two of the segments may represent the biggest opportunity for a marketing effort.

Second, this is why Psympl offers Psychographic AI^TM. 

Psychographic AI^TM

Psychographic AI^TM determines a client's psychographic profile using proprietary algorithms, consumer insights and other variables such as demographics and socioeconomics for advanced personalization. Generative AI is employed to produce content that resonates with each, individual client to maximize the likelihood of behavior activation. Psychographic AI^TM is designed to take the effort out of content development. We will discuss specific Psympl products to enable psychographic, generative AI-produced content in subsequent articles, as this edition of Psympl Answers is focused on the introduction of Psympl's financial psychographic model.

To learn more about the Psympl's financial psychographic model and the methodology behind it, please download our whitepaper.

We look forward to sharing Psympl's insights and data with our readers.