What Is Lifestyle Segmentation? Definition & How to Use It

Lifestyle segmentation is a categorization of target audiences by how they live, which includes activities like healthy eating, staying active, and participating in sports and other hobbies. It’s best for companies whose customer lifestyles drive their purchasing decisions like shoe purchases for active moms. Benefits include customized messaging and better rapport-building, which increases sales.

If you’ve taken the time to segment your customers by lifestyle, you’ll need a customer relationship management (CRM) with tools to help you identify and communicate with them. Freshworks CRM has tools like a built-in phone that allows you to have personalized conversations and talk about lifestyle activities. Sign-up for a 21-day free trial to give these tools a try.

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How Lifestyle Segmentation Works

Lifestyle segmentation works by classifying customers based on meaningful and prominent activities like being active and going to the gym. It could also mean being sedentary and spending hours at home or work sitting for hours. Instead of grouping customers in clusters based on more tangible qualities like ZIP codes or incomes or nontangible attributes like psychographic segmentation, you’d group them together based on activities and how they live.

After finding out information about your target audience’s lifestyle, you’ll need to categorize them in your database under a particular category. This is necessary to easily identify them and communicate with them based on their lifestyles. Having a database or a CRM that allows you to segment your customers by lifestyle helps send customized communications based on customers’ specific lifestyles.

For instance, let’s say your business makes yoga pants that can be worn to the gym, around the house, or even to work. The best way to sell your yoga pants is to speak to yogis, and women wanting to wear yoga pants to work or at home is to show them imagery based on how they wear them. Reinforce active, relaxing, and career lifestyles with corresponding imagery. Doing this will resonate with all three groups and make them feel good about their lifestyles.

By categorizing your prospects and customers with lifestyle data, you can sell more of your products. Your messaging can reinforce how each group feels and make them feel good about their lifestyles. These positive feelings will lead to increased sales from two types of customers who use the same product differently.

Lifestyle Segmentation Definition & Examples

Lifestyle segmentation is when you classify target audiences according to the types of lives they live. Examples of this could include always being on the go or participating in hobbies like arts and crafts. With these two examples, you’d find people in your customer base whose lifestyles are characterized by these activities, group them together, and give them a label that reflects their lifestyle.

Like other methods of customer segmentation, lifestyle segmentation is used by sales teams to make interactions more meaningful and personalized. If your sales team is armed with lifestyle information like a group of their customers leading active and healthy lifestyles, they’d be able to break the ice faster and ways to relate to them. If your sales team shared the same healthy and active lifestyles, they could share personal stories, which helps build a closer bond.

Here are a few examples of lifestyle segmentation and how to use it in sales.

Hobbies & Activities

Hobbies and activities, especially if they are prominent parts of peoples’ lives, are important aspects of lifestyle segmentation. Hobbies and activities include things people enjoy doing for fun, like playing volleyball with a social league or reading and actively participating in a book club. This data can be gathered in conversations, polls, or surveys. You can also purchase this type of information from third-party data providers and add it to your customer records.

A great way to break the ice with customers or prospects is by talking about hobbies and activities. Suppose you knew your customer or prospect was an avid golfer and, if you’re a golfer or related to one, your phone calls could include small talk about golf. You could also organize customer outings that combine golf and your product or service. You’ll get valuable customer face time, which will help with rapport building and increase your odds of making sales.

Wellness & Personal Care

Because many people base their lives on aspects of personal care and wellness, it’s a good idea to categorize your customers into personal care and wellness clusters. Examples of wellness and personal care include healthy eating, vegans, and people who only eat organic. These categorizations are especially helpful if you have a product or service that relates to this category.

Personal care and wellness are great lifestyle segments for educating your customers. Customers who are into health and wellness or wellness and personal care want to educate themselves on how to make their lifestyles even better. If you created a webinar that was high value and provided information that they were not aware of, you position yourself as a trusted authority and increase their propensity to buy from you.

Social Life

This category involves things people do to have fun. Some of the activities in this category can overlap with other categories like hobbies and activities, especially if they are done with friends and family members. A few social activities include things like going to restaurants, joining Meetup groups, or joining clubs and associations. You can get this information directly from your prospect or customer, or you can purchase it from a third-party data provider.

Being familiar with your customers’ or prospects’ social life helps build rapport. For example, if you have something in common with them, like similar social interests, you’ll have a lot to talk about. These types of connections are great for connections over the phone or in person. Also, because so many people share personal things about themselves on social media, these types of interactions are great over social media.

Community Involvement

Some people make community involvement a part of their lifestyle. For instance, some people could be very active in a religious organization or in a civic or volunteer group that it’s a focal point in their lives. Knowing this could teach you something about your customer and, at a minimum, learn about any holidays or causes that are important to them. This can also be something you have in common.

Engaging phone calls about your customers’ community involvement are great because if it’s part of their lifestyles, they will likely want to talk on the phone a lot longer. People usually want to share details about the causes that are important to them. Your knowledge of community involvement could also open the door to volunteerism projects or sponsorships, especially if any of your customers support similar causes.

Why Lifestyle Segmentation Is Important

Lifestyle segmentation is important in sales because it allows you to incorporate elements of your customers’ lifestyles into your sales conversations and even into your marketing message. It’s important because it establishes things you may have in common and allows you to break the ice and build rapport, which is important in closing deals and guiding more customers through your sales funnel.

Leveraging lifestyle segmentation data helps not only build relationships with new customers but also maintains relationships with existing customers, which is important for customer retention. If you can continue growing customer relationships with lifestyle segmentation data, even after your initial sales, you have a better chance of keeping your customers. This is important for generating future sales at lower costs as it’s cheaper to convert existing customers.

You can also use lifestyle segmentation to help you generate leads. One way to do this is by creating lead magnets, which are tools like infographics or e-books, used to generate leads. Lead magnets should reflect your target audiences’ lifestyles and should also be enticing enough for them to give you their contact information. When you start off giving something lifestyle-related, it’s easier for salespeople to build rapport right from the start.

Who Lifestyle Segmentation Is Right For

Lifestyle segmentation is right for many different types of businesses, including nonprofits, for-profits, business-to-business (B2B), and business-to-company (B2C) businesses. It all depends on how strong the correlation is between the target audiences’ lifestyle and their relationship with your product. In the yoga pants example, a health-and-wellness, career-oriented, or even a sedentary lifestyle can be strong connections.

Here are more details around organizations that could benefit from lifestyle segmentation:

• Nonprofits/social enterprises: Knowing how your customers are involved in volunteerism or charitable giving is a huge benefit to nonprofits and social enterprises. Identifying customers who’ve built a lifestyle on service is great for these types of organizations to have as they are likely to want to support your cause.
• B2B organizations: B2B organizations typically have longer sales cycles, so any details that will give you an edge in building rapport over the long run is helpful. Lifestyle segmentation helps because it allows you to personalize interactions throughout the sales funnel with personal attributes.
• Retailers: Retailers can use lifestyle segmentation data to create experiences reflecting customers’ and prospects’ lifestyles. Retailers, especially ecommerce stores, can tap into different lifestyle segments by creating unique online experiences for each.
• Lifestyle-based organizations: Lifestyle businesses, especially ones that sell products and experiences based on lifestyles, like nature and outdoors, fitness, and amateur sports, benefit from lifestyle data around activities. Lifestyle segmentation data is at the center of their customer acquisition efforts.

Many companies can benefit from lifestyle segmentation data. Companies that find this type of data helpful either sell products related to lifestyle or companies with customers who lead a certain type of lifestyle that’s a central part of who they are and how they think. Businesses can use this information to their advantage to get to know their prospects and customers and create messaging around their lifestyles.

Here are additional details on the types of individuals lifestyle segmentation is right for:

• B2B sales professionals: Lifestyle data helps B2B sales professionals break the ice and build rapport. They can use lifestyle segmentation data to tailor communications to prospects or customers on their database who share the same type of lifestyle.
• B2B sales and marketing leaders: Lifestyle segmentation can help sales and marketing leaders plan messaging within each of the sales funnel stages in a way that helps move customers along in the process.
• Entrepreneurs: Business owners wearing many hats benefit from lifestyle segmentation by having information readily available so that they can communicate with groups of customers or with them individually in a way that appeals to the way they live.

Lifestyle Segmentation & Associated Costs

Lifestyle data can be easier to obtain from third-party sources than other types of data like psychographic. This is because lifestyles are more tangible. For instance, it’s harder to pinpoint or quantify someone’s values than it is to identify whether or not they regularly go to the gym or take yoga classes. Also, the type of psychographic data you’re looking for could be very specific where you’ll need to get the data yourself as opposed to purchasing it from a third party.

Here are a few details around lifestyle segmentation costs:

• Third-party providers: Third-party data providers have many lifestyle data points. Because these data points are concrete like avid runners and gourmet cooks, it’s usually easier to find and tends to be less expensive.
• Data collection software: If you want to collect this type of data with software, it can be relatively easy to send out a poll or put one on your website asking questions about your customers’ or website visitors’ lifestyles.
• Manual data capture: Your customer support or even your sales team can capture certain data points during their conversations. This can be as simple as asking a lifestyle question as they’re engaged in conversation.

Specific costs for lifestyle segmentation can range from a few hundred to several thousand dollars, depending on how the data is collected and the amount of data you buy. The least expensive way to capture this data is to do it yourself. However, this can take time.

Lifestyle Segmentation Data Providers

One of the quickest ways to obtain lifestyle data is through a third-party. It pays off in terms of speed and accuracy. Many providers specialize in certain lifestyle data points and others that are more generalized, providing a variety of lifestyle data points.

Here are a few lifestyle data providers you should consider.

Pros & Cons of Lifestyle Segmentation

The pros of lifestyle segmentation include understanding and making better connections with customers and being able to create more personalized messaging. The cons include expenses associated with gathering and organizing the data and not using the data in the best possible way.

Pros of Lifestyle Segmentation

Here’s a list of pros around lifestyle segmentation:

• Increases customer understanding and builds rapport: Understanding customers’ lifestyles gives you insight into who they are and what’s important to them. This helps you build rapport and trust, which leads to better conversions.
• Allows for customized messaging: Insight into lifestyles also helps you create more customized messaging. You can reference lifestyles in conversations and marketing messages, which shows your customer you understand them and their needs.

Cons of Lifestyle Segmentation

Here’s a list of negatives around lifestyle segmentation:

• Can be expensive: although lifestyle segmentation data isn’t as expensive as psychographic data, it is still more expensive than more easily available data such as demographic data.
• Time-consuming if done manually: if done you acquire lifestyle data manually, it could take a significant amount of time or resources as opposed to purchasing it from a third party.
• Negative consequences if used inappropriately: if sales teams aren’t trained on how to use this data in conversations, it could be a turn-off to customers and prospects.

Alternatives to Lifestyle Segmentation

There are several alternatives to lifestyle segmentation. These include demographic, geographic, economic or income, psychographic, and life stage. Most businesses using customer segments use a combination of these to get the most comprehensive view of their customers and prospects.

Here are more details on various lifestyle segmentation alternatives.

Demographic

Segmentation based on demographics is when you classify your customers based on things like income, age, marital status, and zip code. It’s an effective alternative to lifestyle segmentation if your target audience is more driven to purchase based on their demographics than based on lifestyle.

Life-stage

Life-stage segmentation examples include older couples with adult children, younger couples with no kids, middle-aged couples who are newly empty-nesters. Other life-stage categories include recent high school grads or retirees. Life-stage segmentation is ideal for organizations that have customers who are more driven by what stage they’re in within their lives than by how they live their lives in terms of major activities.

Psychographic

Psychographic segmentation refers to customers’ or prospects’ attitudes, values, or opinions and beliefs. This type of data is a great alternative to lifestyle segmentation if attitudes and beliefs play a stronger role in buying decisions than how customers live their lives.

Bottom Line

Classifying your customers or prospects by how they live their lives, such as being active or sedentary or a life dedicated to significant volunteerism or travel, is lifestyle segmentation. This strategy is best for organizations with products or services that are significantly influenced by lifestyle. Being able to incorporate lifestyle data into your communication plan can increase your chances of getting a sale by increasing trust and building rapport.

Should you decide to invest in lifestyle segmentation, you’ll need a CRM where your salespeople can access and make use of lifestyle data. A CRM like Freshworks CRM allows sales professionals to customize and scale email communications using lifestyle segmentation data to reference lifestyle elements. Sign-up for a 21-day free trial to give these email features a try.

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