Customer demographics are categories of consumer populations that are relevant to a business' purposes, such as marketing and product design. The term also refers to the study of such categories in a business context.
Customers (and potential customers) can be categorized according to an almost endless number of variables. Some of the most common customer demographics for business purposes include age, gender, geographical location, education level, marital status, household income, occupation and hobbies.
Demographics are one of the key elements of customer segmentation. Targeting specific groups of customers enables more efficient allocation of marketing resources and increases the opportunities for cross- and up-selling. The practice also makes more personalized interaction possible, improving customer service and fostering customer loyalty and retention. More appropriately targeted marketing efforts are typically more relevant to the customer’s needs and, as a result, more welcome.
From another perspective, a business might study customer demographics to understand the makeup of something, for example, exploring the characteristics of the population in a particular neighborhood or the audience of a website. That approach is used in creating demographic profiles of individual customers as well as groups.