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While demographic, geographic, and psychographic segmentation are commonly known and used in the marketing world, now is the time to give behavioral segmentation the credit it deserves as an effective way to customize your marketing efforts and campaigns.
Behavioral segmentation is a modern approach to segmentation that yields the results you've been looking for through other segmentation techniques. Let's dive into this beginner's guide to behavioral segmentation to discover what it is and how you can use it to increase your sales.
For more on the different models of customer segmentation:
Behavioral segmentation consists of separating individuals with like-minded behaviors into their groups. Once separated, you can target these groups based on the shared actions and behaviors they exude.
Behavioral segmentation focuses on various customer interests and behaviors, such as the type of content and products consumed, how often these products are consumed, the amount of money spent on products, etc. To effectively utilize this method, you must stop looking at who customers are — their age, gender, marital status, etc. — and start looking at what they do.
The more you understand your customers’ actions and behaviors, the more you'll be able to target them appropriately and optimize your marketing campaigns with personalized messaging.
Behavioral segmentation is an extremely effective marketing strategy, and it yields a variety of benefits. By sending the right message to the right people at the right time, you'll:
Effectively utilizing behavioral segmentation begins with acquiring customer behavior data and trends and then analyzing and segmenting them accordingly. This first step is vital. A recent survey found that companies who use customer analytics extensively report that they're outperforming their competitors on key performance indicators (KPIs), including ROI (return on investment).
By analyzing this data, you'll start to identify your customers' interests, needs, and capabilities and group them with like-minded buyers.
There are multiple ways to segment data and group your customers. Here are the top five ways to segment by customer behavior. These segmentations can be used individually or combined to bring variety to your marketing campaigns:
Segmenting by customer acquisition focuses on the moment a consumer makes the switch from interested party to active customer (when they made their first purchase). You'll want to look at data regarding when someone gets to know your brand, their initial engagement with your company, and their first purchase of your services or products.
Segmenting by customer purchasing and spending habits looks at what customers are buying, when they're buying it, how often, and for what purposes. For example, if you own an online clothing store, you can look into who is purchasing sundresses and create a segmented group for everyone who engaged in that purchasing habit. Then, you can create a vibrant summer dress campaign with a discount code for all the dresses on your website to be sent to that specific group who is likely to capitalize on the sale.
Segmenting by customer journey has to do with what “stage” of the buyer’s journey a customer is in. For example, are they a first-time buyer, an occasional user, or a loyal customer? To segment even further, you can look into how long consumers have been interacting with your brand — days, weeks, months, or years — and group them accordingly.
With this information, you can create marketing campaigns that speak specifically to the customer journey a group is in. If, for example, you have a large group of loyal customers who've been engaging with your brand for years, you could send them information about your customer loyalty program since it appeals most to them.
For more on how to build a customer journey map:
Segmenting by customer engagement and usage dives into how customers are interacting with your brand via your website, including how often they engage (how many hours per day, days per week, etc.). With this information, you can help your least engaged customers become your most engaged by offering discounts and promotions to encourage increased engagement with your brand, products, and services.
Segmenting by customer interests is an aspect of behavioral segmentation where you collect data on what customers are interested in by analyzing their purchasing habits. With this data, you can then suggest similar items, increase product usage, cross-sell and up-sell, and personalize content. From one confirmed interest (from a purchase), you can infer further interests which will increase further engagement.
For more on how to personalize content:
The sooner you start collecting user data and analyzing the behaviors, interests, and actions of your customer base, the sooner you can capitalize on the benefits of behavioral segmentation and create personalized marketing campaigns to increase your sales.
Originally published on September 15th, 2020, last updated on June 16th, 2022.