Behavioral segmentation is a technique that marketers use to break down their customers into groups. There are many reasons why this might be done, but the main goal is to understand your customer base better to provide them with more personalized content. This blog post will discuss what behavioral market segmentation means, how it differs from other types of market segmentation, and some examples of how it’s used in marketing today.
What is Behavioral Segmentation?
The behavioral segmentation definition says that marketers divide their customers into groups based on their behavior, not just who they are. Again, it’s about understanding why people act the way they do so you can create content for them or target your message in ways that will appeal to them better than generic messages would. This means that if you’re a marketer, once you figure out who your customers are and what they want from your business, you’ll also have to consider why they behave the way they do.
Key Takeaways: – Behavioral segmentation is when marketers break down their customers based on how they act instead of just who they are.
This is done to improve marketing efforts and messaging and provide customers with more personalized content.
What Is Market Segmentation?
Market segmentation is if you break down your customer base into groups based on their behavior or what makes them different from other potential customers. In some cases, this is based on how much a customer would be willing to spend. In other cases, it’s done by age, gender, or interests. Marketers will often use demographic information and purchasing habits and behaviors when they’re determining who makes up their different market segments so that they can provide the right messages to the people who are most likely to be interested in what they have to offer.
Key Takeaways: Market segmentation is when a marketer decides their customer base by breaking them down into groups based on how those customers behave, not just who they are. This allows for more targeted messages and personalized content.
Behavioral Segmentation Examples in Marketing Today
Behavioral segmentation in marketing is used to help businesses better understand their customers. There are many different ways that marketers use this type of segmentation, including:
- By demographics (income level, age group, etc.)
- By industry or business sector
- Based on interests and online habits
Marketers use behavioral segmentation to understand their customers better, provide them with more targeted messages and content that they’re likely to be interested in, and gather information about what types of things appeal most to different groups.
Key Takeaways: – Behavioral market segmentation is used by marketers today to understand their customers better. This allows marketers to provide their customers with more targeted content and messages.
– Marketers gather information about what appeals most to different groups of people to customize their marketing strategies further.
Why is Behavioral Segmentation Important?
Behavioral segmentation enables eCommerce businesses to achieve extraordinary customer satisfaction & retention, increase customer lifetime value and boost long-term revenues. Customers who feel they have been attended on along the consumer journey will instinctively prefer the brand over competitors. The Behavioral Analytics – Behavioral segmentation- a book on behavioral marketing, explains How Behavioral segmentation can optimize the positioning of the target market with less than 1% bounce rates. They’re typically 23-35 years olds in your fashion eCommerce store. By understanding why customers behave the way they do, marketers can provide them with targeted messages that appeal to their needs.
Key Takeaways: – The main benefit of behavioral market segmentation is that it allows for better customer messaging and more personalized content. This helps customers feel heard by businesses, so they have a reason to keep coming back.
– Marketers use behavioral market segmentation to provide their customers with tailored messages and content that will appeal to their needs to increase customer satisfaction, lifetime value, and revenue.
How Can I Use Behavioral Analytics in My Business?
When it comes time for marketers to decide how they want to segment their market, they will often use different variables to determine who qualifies as a part of each group. For example:
A retailer might decide that people who buy shoes and wear them more than once per week would be the best fit for one segment, while those who only wear their shoes two or three times before deciding they don’t like them anymore would fall into another.
A financial planner might decide that single and between the ages of 21-34 will be one group, while those who are married with kids would make up a different segment altogether.
By using behavioral market segmentation to understand their customers better, marketers can provide them with more targeted messages and content.
Key Takeaways: – There are many variables marketers can use when it comes time to segment their market to determine which group falls into each category. For example, they might decide people who buy shoes and wear them more than once per week would be the best fit for one group, while those who only wear their shoes two or three times before deciding they don’t like them anymore would fall into another.
Can You List the 4 Types of Behavioral Segmentation?
There are four chief types of behavioral segmentation that serve as a functional product in a person’s buy-acquisition journey. Each number translates actionable insight in various marketing formats. You can divide them into different segments that include behavioral segmentation and Customer’synthesis’.
Segmentation Based on Purchase and Customer Behavior
Segmenting by purchasing behavior removes the variations of patterns that have been observed in the conduct of the customer during a sale decision. This type of behavioral segmentation helps identify the buying stages that a customer is in, their role in the purchase process, obstacles they are facing, incentives they are most likely to respond to, and much. For example, customers who prefer to take unbiased research will usually look for results within the search engines for an appropriate decision when buying from you. Customers with particular thriftiness may interact with your brand of the product once it’s sold. Then both customer types can be placed in the same product affinity category.
Segmentation Based on Customer Loyalty
Loyal customers have tremendous benefits for the marketing of referrals to colleagues or from friends. Using loyalty-based behavior segmentation helps you pinpoint the needs of repeat customers. The most common examples for customer loyalty segmentation can be reflected in the travel industry, which regularly promotes frequent flyer programs, and the finance industry, which rewards big-spending platinum card membership. Extracting valuable insight from this segment could help you optimize future strategies, improve your value proposition, strengthen positioning, and more. Think about factors such as recommendations and feedback.
Benefits Sought Segmentation
Segmenting by benefit seeks refers to dividing your audience based on the unique value offered your customers are looking to enjoy from your product or service. Having consumers divided based on these factors provides benefits of segmentation. Gathering your customer data and grouping its characteristics can help you focus on those that drive purchase behavior from customers. Divide data by these benefit categories: Some look for whitening benefits while others look at comfort for their sensitive gums. Other people search for convenience for people with weak gums. Others may seek benefits in whitening as well as comfort.
Occasion or Timing-Based Segmentation
Occasion-based segmentation categorizes clients who are most likely to interact with your brand or buy your site during specific occasions or specific times. For example, events might include national holidays like Thanksgiving or Christmas. After work, purchases such as coffee are occasion-based purchases as they are only bought at precisely the correct hours. If, for example, your department stores have customers who participate every year in your Thanksgiving promotion but do not buy anything else from you throughout the year, you can use this information to market to them a few days before the purchase.
Other Types of Behavioral Segmentation
There have been four main types of behavioral segmentation strategies encompassing different behavioral segments. Here are some examples of behavior and marketing segmentation:
Segmentation Based on Engagement
The surveys can be an essential means to know whether a customer has less motivation to buy or trusts it to provide their opinion. The use of marketing material introducing specific features on a product or service may change the client’s attitude towards it. Those who are active defenders could benefit from loyalty programs to retain their custom and encourage word-of-mouth marketing. Keep this information accurate and adjust your messaging so that your marketing messages resonate in each group. That way, customers maintain them by dividing the material between engaged and unengaged participants and ultimately helping reduce churn levels. It could help improve service customer success.
Segmentation Based on Customer Journey Stage
A customer’s buying journey develops in 4 principal stages that constitute the widely known AIDA model. Segmenting your goals to the customer journey phase is a great way to get people into your target customer segment. It would help if you focused on building strong advertising campaigns and media coverage. To nudge customers from a desire to purchase, you have to get clear and informative FAQs, associative product imagery, and good UX. Vinomofo used this sort of segmentation to develop a marketing strategy targeting targeted audiences, including new, returning visitors, returning clients, and more.
Segmentation Based on Satisfaction
Using customer feedback can help you improve a product or service by showing which parts of the customer’s preferences will give you the edge or increase revenue. Use marketing tools to collect feedback, such as reselling and discounting your next purchase. All these are worthwhile for the long run in the short term.
10 Important Behavioral Segmentation Methods You Can Apply for Better Experience
Almost all experts use roughly six different styles of behavioral segmentation. These six classic typologies are still relevant today but have taken on new meanings, applications, and usage. In a recent blog, we will study both traditional and modern interpretations of each type. We will also add several new options to this list to include interesting new ways specific customers and partners use behavioral segmentations today, such as some new ways to use them in their work with partners and customers.
#1. Customer Journey Stage
Another common misnomer is that any customer interaction behavior could identify precisely which phase of the customer’s relationship with the company or business in question and why. Building behavioral segments by customers’ journey stage let you align communications and personalize experiences to increase conversion at every step. Customers in all locations interact and engage with content/experiences designed and conceived for all levels in all different ways at all other times and not in the same order. For example, the figure below depicts the behavior of an individual prospect customer for a period of the last 14 days. The target is in the customer journey stage, but his behavior occurs in entirely random order and doesn’t happen in rudimentary order from location to stage.
#2. Benefits Sought
Can you list the benefits that consumers should seek out in their purchase decisions? As customers study a product/service, their behavior can reveal valuable insights into which advantages, features, values, use cases, and problems influence the most crucial buy decision. For example, for B2B software, the benefits sought could be specific features or attributes, ease of use, speed or accuracy benefits to the software, or essential integrations with similar tools. By understanding the customer’s behaviors with your brand over time to determine their desired benefits by identifying their segment, you can group customers in the features you need or personalize marketing accordingly. For example, if you have four customers who seek different services, you message all three about the same product benefits.
#3. Segments Based on Quantity or Regularity of Usage
These consumption-focused behavioral segments are critical in understanding why a specific type of customer becomes heavier consumers. By creating this segment, you entail testing various actions to increase the usage of existing customers and attract other customers. Over time, it is essential to monitor changes to consumer behavior. This way, you can identify challenges and opportunities at an aggregated level (to assess overall business performance) and at an individual customer level. (source) Learn to prevent poor customer relations by doing analytics for analytics on user experience and website. How should I eliminate customer churning by customer Journey analytics? What can I find on the Internet?
Interest-based behavioral segmentation can be crucial in delivering personalized experiences that keep customers engaged and coming back for more. Netflix, Amazon, Spotify, and others all use recommendation engines to suggest their customers and help their customers choose the best product. Machine learning might allow for a larger cycle in a scalable way. As customers become more engaged and interactional, there’ll be many interest inference-based decisions – to find, determine, and weigh in time. Machine learning is a tool to help consider the number of potential interests/topics that might have good effectiveness in engaging that customer, such as cross-sell or upsell offers.
Do customers use it as often as possible? How does one use them in business? Product or service usage is another common way of segmenting individuals in terms of behaviors. Usage behavior as a predictive tool indicates loyalty and churn and can therefore determine the lifetime value. For example, how often do users use b2b SaaS services when you offer the software that provides you an end-to-end customer service? How many days does a person have? Do people from an identical company use it? For example, Netflix uses customer utilization data to construct behavior segments based on its monthly user consumption – which ultimately allowed Netflix to reduce its churn rate.
#6. Customer satisfaction
Customers should learn to analyze their behaviors and satisfaction with data that could help them understand what they are doing well or the average interaction cost. Numerous data sources enable the customer to measure their true happiness in the current environment. By segmenting most loyal customers by satisfaction, you can determine how to answer such questions as Who is most or least satisfied? Tell me the most critical factor that impacts customer satisfaction? Which is the primary factor that is important in your organization? Tell me the easiest way to measure a company’s customers satisfaction without using surveys?
#7. Implicit Segments Based on Digital Behavior
Another modern approach is using patterns in digital behavior to identify key obstacles marketers need to remove from the path to purchase. Lacie Larschan characterizes buyers in 6 different segments of behavioral behavior with corresponding buy personas by making implicit assumptions based on their online interactions. For any user that could learn that much about how other customers approach a buying decision by performing some behavioral testing with a given Web service, imagine how much more information you may discover as. If you want to learn more about your customers’ buying patterns, this can help you spot potential sales issues.
#8. Targeting Segments by the Time of Day of Week
Advertising strategies can leverage this data to understand which days are ideal to advertise to customers by creating compelling marketing messages and compelling customer information. For example, Netflix Domino’s Open Table and Hotel Tonight all sent me a week-long email. Tell me the cause behind this? Content, pizza delivery, and Last Minute Restaurant Reservations, and Hotel Reservations are all things I would consume or buy on the weekends. The best times to target are when a shopper has a higher propensity to engage with the brand or is more receptive to offers such as pizza delivery and last-second restaurant reservations.
#9. Customer Loyalty
Customers are the best asset of all and generally have most of the maximum lifetime value and will grow with each business you have. Loyal clients are good candidates for a program where exclusive benefits and special treatment of customers are offered, such as exclusive rewards to encourage continuous and robust customer relationships. Can you help me to understand customer loyalty behavior patterns? What is the optimum customer loyalty approach for your business? What is the best method to ensure that your best-paid clients are happy?
#10. Segments Based on Quality of Usage
High use does not often mean much value to customers and eventually your business. For example, a SaaS client might have a ton of product usage habits that, in reality, might not be as peachy as you initially pictured. The proportion of their utilization is not indicative of the value they receive. Although this customer would meet the criteria of a “heavy user” segment, there’s no real value for this customer, which could likely be very costly if it becomes more.
We also recommend you watch this video on “Behavioral Segmentation Explained || Marketing” by the FST study channel.
We hope you found this post valuable and informative. If it is, we’d love to hear from you about what topics or formats would be helpful for future blog posts. You can share your thoughts with us in the comments section below! Our last article (behavioral market segmentation) covered how marketers use behavioral data to understand their customers better and tailor marketing messages more effectively towards them. But before we jump into that deep end of the pool, let’s start by defining precisely what behavioral market segmentation means and some examples of its success stories!