As we all know, our behavior is affected by many factors like habits and background. People with similar habits and backgrounds might act in the same way. Behavioral segmentation can help you segment customers based on their behavior and target them accordingly.
Earlier most of the brands used marketing segmentation to target customers effectively. But it is based on demographics and geographical attributes like age, gender, location, etc. However, you can see there’s no emphasis on customers’ needs and wants.
To get the most out of marketing, it’s important to understand your customers and deliver them what they want. Behavioral customer segmentation can help you offer the most relevant experiences to customers.
Here, in this blog, we will give you in-depth information on behavioral segmentation, behavioral segments, and behavioral market segmentation examples.
Behavioral segmentation can help you to target customers with personalized marketing.
What is behavioral segmentation?
Behavioral segmentation definition: It is the process of segmenting or grouping customers based on their behavior patterns when interacting with your business. You can segment customers based on:
- How frequently do they make a purchase?
- How do they rate your brand or service?
- What’s their attitude toward your products or service?
- How much information do they have about your brand?
- What are their purchasing tendencies during sales or specific occasions?
Behavioral segmentation can help you go beyond traditional demographic and geographic segmentation. With behavioral data, you can create personalized and effective marketing campaigns.
Market segmentation behavioral can assist business owners and marketers to tailor products or services to fit customers’ specific needs. Next, we will discuss the importance of marketing segmentation and its benefits.
Why is behavioral segmentation important?
Behavioral segmentation marketing can help you strategize effectively and allocate resources efficiently. When you target all customers with the same marketing strategy, it doesn’t make them feel special. You can make your marketing effective by offering relevant customer experiences. There are many benefits of behavioral marketing segmentation that we have explained below:
- Know who are your most engaged users: You can segment your existing customers and prospects based on their engagement level. The higher the engagement level, the more interested they’re in your brand. You can use this information to make informed marketing decisions. This way you won’t waste your marketing efforts on customers who aren’t interested and less likely to convert.
- Improve message accuracy: With behavior segmentation, you can create marketing messages that are relevant to distinct customer groups. For example, you have a segment of customers between 23-28 years old, who actively purchase apparel. You can use behavior-based segmentation to target customers more effectively based on their interests and preferences.
- Provide personalized experiences: Nowadays, customers have got a lot of options to choose from. Therefore, it has become more important than ever to provide the best customer experience. By analyzing your customers’ behavior patterns, you can know their needs, wants, pain points, and issues. This way you can create personalized approaches for people like making relevant product recommendations, offering special coupons, etc.
- Increase brand loyalty: Customers who get personalized experiences from a brand will definitely favor that brand over others. Behaviorstic segmentation can help increase relevancy and personalization levels. This aids in increasing customer satisfaction and retention in the long run.
What are the types of behavioral segmentation?
Behavioral segmentation is mainly divided into four types that help form a customer profile for the different stages of the buying journey. Behavioural segmentation can help you create an effective marketing strategy and encourage customers to make purchases.
1. Purchase behavior
Purchase behavior segmentation is based on how customers act throughout the buying decision-making process. This can help marketers understand:
- What are the barriers to the path of purchase?
- How do customers take the final purchase decision?
- How complex is the purchasing process?
- Which behaviors predict the high and low chances of purchases.
The purchase behavior is further divided into four main categories:
- Complex: These are the customers who’re involved in the complex decision-making process. They have to choose among distinct brands. For example, if a person has to decide between Ford Ecosport and Kia- it’s a complex decision to make.
- Variety-seeking: When customers aren’t involved too much in the decision-making process, they might switch to other brands easily. For example, when a customer is offered a trial pack of shampoo and if they like it, they switch to it leaving the brand they’re using.
- Dissonance-reducing: When a customer has to make a purchase decision between similar products offered by different brands. For example, a customer has to choose a sofa set among the distinct brands. Then, their decision might be based on the price rather than just quality.
- Habitual: When a decision has to be made among similar products with very less difference. This purchase decision depends on personal preference and habit. For example, you’ve to choose among different kinds of toothpaste. You can opt for Colgate or Sensodyne based on your preference or habit.
Most of the customers are faced with these types of purchase decisions in their daily lives. Thus, purchasing behavior is an important classification of behavioral segmentation. By understanding purchase behavior, you can best market your products or services to customers.
2. Benefits based
When a customer searches for a product or service, they look for its benefits, features, and use cases. For some customers, specific features are more important than others. These are the factors that drive them to purchase.
For example, there are two customers who want to buy makeup. They might be looking for different benefits from a makeup product. One customer wants a paraben-free makeup product while another wants a non-comedogenic product.
Your brand product can have many benefits. But there are customers who want your product for distinct reasons. Thus, it’s vital you highlight specific benefits that are important for different customers. Behavioral segmentation can help you send relevant messages to customers without wasting time and resources.
3. Buying journey stage
Segmenting your customers based on their buying journey stage and behavior can help you personalize experiences and boost conversions. You can find out who are the customers in the awareness, consideration, and decision-making stages. Based on their buying journey stage, you can create marketing messages and target them effectively.
Customers in the different buying journey stages think about your products or services differently. Since the marketing content is spread all over, it might happen that a customer at the decision-making stage interacts with awareness content. Thus, pinpointing which journey stage a customer is in difficult.
For improved accuracy in segmentation, you should consider behavioral data as well. Behavioral segmentation along with buying journey stage can help you improve your algorithms for marketing.
4. Usage
This behavioral segmentation type can tell you about the loyalty and churn rate of customers. You can know about the following:
- How often do customers use your product?
- How are they using your product or service?
- How much time does a product last for them?
- What are the major benefits of your product for them?
The customers can be divided based on the users:
- Heavy or super users: These customers use your product or service a lot and make frequent purchases.
- Medium or average users: These customers use your product or service less frequently than super users.
- Light users: These customers use your product very less or once in a while.
Usage-based behavioral segmentation can help you understand why different types of customers become heavy or light users. You can implement different marketing campaigns to turn your average and light users into super users.
5. Occasion or time based
Occasion or time-based behavioral segmentation is done on the basis of both universal and personal occasions. Below we have explained how the occasion or time-based behavioral segmentation is done:
- Universal occasions: Purchasing patterns of customers during a holiday season or special event with a certain demographic.
- Recurring-personal occasions: Purchasing patterns of an individual customer consistently over a period of time, based on their personal life occasions like birthdays, anniversaries, etc.
- Rare-personal occasions: Purchasing patterns of an individual customer that are spontaneous and difficult to predict like trips, weddings, etc.
6. Customer loyalty
Behavioral customer segmentation can be based on customer loyalty. However, it also goes with other behavior segments like purchasing behavior, timing, and usage. It’s important to understand that loyal customers consistently purchase products or services from you.
Customer loyalty behavioral segmentation can help you get answers to important questions like:
- What makes customers stick to your brand for long?
- What type of customer behavior lead to loyalty?
- Which customers should be a part of your loyalty program?
- How to keep loyal customers with you for a long time?
By doing customer loyalty behavioral segmentation, you can give special discounts and offers to loyal customers. Rewarding customers for their loyalty can help you improve your customer retention rate.
7. User status
User status is a good way to do behavioral segmentation in marketing. User status can be divided into the following categories:
- Non-users: These are the people who are your target audience but they haven’t used your product yet.
- Prospects: You need to make these people believe that you’re the best option in the market.
- First-time buyers: These are the people who have purchased your product for the first time.
- Regular buyers: These are the people who regularly buy your products. You can introduce them to other products or services you offer.
- Defectors: These are customers who have switched from your brand to a competitor due to some issue or problem.
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Behavioral segmentation examples
Behavioral segmentation can help you turn cold leads into newly engaged and acquired customers. Since marketing behavioral segmentation is based on customers’ behavior, it’s quite effective. Here, we have given examples of behavioral segmentation for your reference.
Behavioral segmentation example 1 #Olay
Olay is an American skincare brand that used benefits sought behavioral segmentation. They created an AI-based beauty tool that asked five to seven quick questions to customers and recommended products accordingly.
By asking questions to customers about their skincare and preferences, Olay was able to collect customer data. This data helped them not only offer relevant customer experiences but create products that customers need or look for the most.
For example, customer data insights from the Skin Advisor app revealed that most customers want fragrance-free products. Earlier, Olay’s product development team had no plan to create fragrance-free products. But after getting customer insights, they started manufacturing fragrance-free products.
Behavioral segmentation example 2 #BabyCentre UK
BabyCentre UK is a pregnancy and childcare resource located in the UK. They used a Facebook Messenger App to give personalized advice and recommendations to customers based on their responses. They created a series of questions and answers to get information from customers. Based on that they gave people a list of signs to look out for and recipe suggestions. Since they were able to provide tailored experiences to customers, they had more repeat customers.
Babycentre determined which channel is driving them the highest levels of traffic. The report revealed that the messenger bot has a read rate of 84% and a click-through rate (CTR) of 53%. They found that their overall engagement rate was 1428% higher than emails. This shows behavioral segmentation can help to create the most personalized experiences.
Behavioral segmentation example 3 #Davids Tea
Davids Tea is an example of behavioral segmentation for customer loyalty. Davids Tea is a specialty tea seller who personalized messaging for their loyal customers. They created one of the best email marketing examples. When a customer completes a specific time with a company, they receive a “look back” email.
This email contains data such as when the customer made the first purchase and the most purchased teas by weight and comparison, etc. This type of personalized marketing message makes customers feel special and valued.
Behavioral segmentation strategies
Personalization can make a huge difference in how a customer sees your business. Well, by personalization we just don’t mean adding customer names to your marketing messages. It’s definitely more than that. You can use behavioral segmentation to make your messages more relevant and personal to customers. Here, we have given some of the best behavioral segmentation strategies for your reference.
1. Retarget past desired behaviors
Your customers’ past behavior can give you an idea about their future behavior. However, there’s no guarantee that a customer previously interested in your products or service will be interested in the future too. For instance, when a customer searches for products or services on a search engine, they are repeatedly shown similar ads. Your customers’ past behavior can help guide your future marketing efforts.
For example, when a customer visits your website frequently and engages with your social media content, it’s a strong indication of them being interested. Behavioral segmentation can help you to track and retarget customers who are interested in your offerings.
2. Location-based segmentation
You can target your customers by keeping track of their previous and current locations. Geofencing is a great tactic to target app users when they’re active in specific locations like within 5 miles of your business.
Many ride-sharing apps use behavioral segmentation to forecast demand and price. For example, you might have seen when there’s too much crowd and you try to book a cab, a surge fee is charged. It is due to more number of users and less number of drivers in that area.
Ride-booking apps also use your present location and past behaviors to predict your destination before you put your destination in the app. This helps to improve the customer experience.
3. Price by device
As you know marketing relies on online platforms for advertising and promotions. By using device data, businesses can know about their customer’s budgets. For example, Apple products come at a hefty price. This shows that people using Apple devices are affluent customers.
Similarly, Android devices are less expensive, which shows people using them are less affluent. Understanding your customer budget can help you in offering products or services at a price that is affordable to them. You can offer your products or services at distinct price points for different customers based on their device data.
4. Product recommendations
Behavioral segmentation can help you build recommendation engines. You can make predictions about the products or services your customers might like based on their interests and past purchases.
For example, you might have seen that shopping sites like Amazon and Myntra often suggest products based on your browsing history and past purchases. As per statistics, product recommendations based on behavioral segmentation are responsible for 35% of sales.
5. Timing
A perfect-timing message can help you get a conversion easily. Some people have a fix schedule while others are more flexible in their approach. Understanding when users are most active and engage with your app can help you send push notifications and promotional messages at the right time.
By analyzing behavioral segmentation variables, you can know the right time to message your target audience. It can reveal important insights that can not only help you to work on your timings but content as well.
For example, you have an app to help people improve their sleep quality. Through insights, you find out that most of the users use the app at night. Also, people who have difficulty sleeping are active at night. Thus, instead of sending push notifications during the day, you can send them at night when people struggling to sleep can get back to you.
6. Use past customer data
Behavioral segmentation can aid you in providing people with relevant content that they might be looking for. For example, the Myntra app uses past customer data and shows products that you’ve previously browsed when you reopen the app.
Google also makes use of historical behavioral segmentation in Gmail. When you write replies in emails, Google uses past behavioral data to predict the word or phrase that you might type in next. This helps users write emails quickly and improve their experience.
Tips for behavioral segmentation
Behavioral segmentation can help you understand your customers and target them effectively. You can know about your customers’ interests and preferences. Here, we have given tips on how to use behavioral segmentation in marketing:
- Create retargeting campaigns based on the past purchases of customers.
- Make behavioral segments based on customers’ interests, preferences, engagement, average order value, and more. Send targeted content that entices users to make a purchase.
- Identify high-value customers and focus on them with relevant content.
- Check when customers engage with your brand the most and least. Time your marketing campaigns at the right time to receive the best response.
- Personalize your messaging and delivery times based on customers’ live locations and events.
How to do behavioral segmentation?
Webmaxy eGrowth is an all-in-one eCommerce management platform that can help you improve your marketing performance. It comes with a Customer Segment feature that can help you carry out behavioral segmentation with ease. You can create customer segments based on their past purchases, recent activity, interests, preferences, location, etc.
eGrowth also comes with a Marketing Workflow feature that enables you to automate SMS, Email, and Whatsapp marketing for different customer segments. eGrowth can aid you in enhancing your customer experience and increasing your revenue flow. It comes with many other features like a KPI dashboard, marketing insights, social campaigns, email marketing, Whatsapp marketing, customer loyalty, help desk, and retargeting.
To learn more about Webmaxy eGrowth, connect with our experts on call or email us at [email protected].
Behavioral segmentation: The conclusion
Behavioral segmentation is important for creating an effective marketing strategy. It can help you reach your customers with personalized content at the right time. You can understand your customers better and improve the performance of your marketing channels.
Behavioral segmentation can give you an insight into customer behavior and customize your messaging accordingly. You can know which products or features would appeal to different customer segments the most. If you find that a customer only makes a purchase during the sale, you can send them marketing messages during that time period.
Segmentation behavioral can help you improve your marketing performance with personalized messages. Webmaxy eGrowth can help you do behavioral segmentation and automate your marketing campaigns easily.
Schedule a call with our experts to learn more about Webmaxy eGrowth, or email us at [email protected].
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