According to a recent Forrester report, only about 33% of companies said that customer segmentation based on their behavior has had a significant impact on their business. Furthermore, this report also explained that the main reason why these companies fail is that they haven’t moved further from the traditional customer segmentation approaches. And doing this without leveraging the breadth of customer data as well as advanced analytics techniques available today will be detrimental to their business.
It’s no secret that the audience’s habits, emotions, and even their past experiences influence our current behaviors. If you can understand these behavioral patterns, you’ll be able to get a much better idea of how to target your audience and get the best results. Behavioral segmentation goes beyond just recognizing customers with different personalities and habits. It’s all about making sure your marketing campaigns are perfectly aligned with these behavioral patterns, and delivering the right message to each one. By doing this, you can more effectively reach your target audience.
In this post, we’ll cover a deeper understanding of behavioral segmentation, its general types, and its importance in marketing.
What is Behavioral Segmentation?
Behavioral segmentation in marketing is the process of sorting and grouping customers based on their behaviors exhibit. These segments can include their attitude towards your brand or service, the usage of products or services, purchasing tendencies, or the overall knowledge and feedback of your brand or your brand products/services.
There are a lot of marketing campaigns that rely on demographic and geographic data, but behavioral data can give you a lot more information about potential customers. This information can help you create a more successful marketing campaign that targets customers more effectively. Enables the marketers or businesses to tailor their message based on the customer-specific needs to the execution of more successful marketing campaigns and hence, drives customer loyalty and credibility.
Importance of Behavioral Segmentation
- Personalized Experiences
Your brand’s persona and uniqueness come from how well you understand and empathize with your audience. Knowing their needs, wants, concerns, and desires allows you to better serve them with personalized approaches. For example, you can recommend complementary products on your website or follow up with an upsell email after purchase. This helps keep customers engaged and loyal to your brand.
- Enhances Messaging Accuracy
By understanding the customer data at hand, marketers can optimize their positioning and marketing messages. For instance, you’ve already identified that 24-35-year-olds are the most active segment on your women’s fashion eCommerce store. Behavioral segmentation allows you to further understand this demographic by splitting them based on interests and preferences, such as “interested in formal attire,” “interested in casual wear” and so on.
- Builds Brand Loyalty
Customers who feel like they are being catered to throughout their customer journey will generally favor the brand over its competitors. Thus, it promotes brand loyalty.
- Identifies the Engaged users efficiently
By being able to sort the customers and potential prospects, businesses can make well-informed decisions on where to best allocate time, budget, and resources. In this way, it makes the marketing strategies more effective.
Types of Behavioral Segmentation
Generally, there are four types of behavioral segmentation including: –
- Purchasing Behavior
When you segment your customers by their purchase behavior, you can get a better understanding of the different trends and patterns that influence their decision-making process while purchasing. This information can be used to improve your marketing and sales strategies.
- Occasion or Timing Based
Occasion-based behavioral segmentation is to categorize customers and figure out which ones are more likely to either purchase from your website or engage with your brand on special occasions. The occasions include National holidays, the holiday season or wedding season, or even vacations.
- Benefits Sought
This type of behavioral segmentation means that you would divide your audience based on what they’re looking to gain from your product or service. For example, if you’re selling a skincare product, some people might be looking for something to help with acne, while others might be looking for something to help with wrinkles. By segmenting your audience in this way, you can better target your advertising and make sure that you’re reaching the people who are most likely to be interested in what you have to offer.
- Based on Customer Loyalty
Segmenting customers based on loyalty can help you understand how engaged they are with your brand. This could be done by looking at a rewards program, the number of purchases, or other interactions with your marketing.
Behavioral segmentation is a vital part of any marketing strategy, and when used correctly, can display data trends and insights that you may have never discovered. Finding the best segmentation techniques? No worries. Newristics XEKUTE is the first company to segment customers based on heuristics and artificial intelligence. This allows for more accurate customer segmentation that can be used to improve the customer experience.