Behavioral Segmentation to Improve Marketing
Customer personalization and experience are the two main factors that can make or break your business success. This is why effective segmentation is crucial and should be implemented.
Reported by the recent Forrester says, only about 33% of companies and businesses recorded that customer segmentation is significantly impactful to 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.
Admittedly, our habits, backgrounds, and emotions play pivotal roles in our behaviors. Many people are fond of some daily practices that they engage in day in day out.
For instance, a coffee addict simply understands the impulse and everyday requisite associated with that morning ritual. Similarly, in marketing, we would be interested in understanding our ideal metaphorical daily coffee drinkers, and of course, we want to clear them out from those who consume at regular intervals.
Behavioral segmentation doesn’t only recognize people with different characters and habits. It primarily centered on optimizing your marketing campaigns to align perfectly with these behavioral patterns with a particular message.
Understanding Behavioral Segmentation in Marketing
What does behavioral segmentation mean in business marketing? Simply put, behavioral marketing refers to the process of sorting, organizing, and grouping customers based on specific behaviors they exhibit.
These behaviors range from the kinds of contents or products they consume and their level of interactions with websites, applications, or businesses.
In business marketing, business professionals tend to walk through a tightrope establishing a clear separation between business and psychology. On several occasions, we tend to bring our marketing theories of the likely and possible responses of specific customers to marketing campaigns.
As the name implies, behavioral segmentation studies certain behavioral traits of consumers. Some of these traits include their knowledge of, responses to, attitude towards, likes and dislikes of products, services, brands, or promotions.
The objectives of behavioral marketing can be summarized in the following bullet points:
- Understanding the best methods of addressing the specific needs and desires of customer groups;
- Tailoring your products and services to meet the strategic need and desires of customers;
- Discovering several opportunities to optimize the journey of every customer;
- Quantify and measure the potential value to your business;
- Develop a smart marketing strategy to improve and expand your customer base.
Behavioral segmentation involves the observation of the actions of each customer towards marketers before sending tailored messaged to them.
Why is Behavioral Segmentation Essential?
Once marketers can identify users by their specific behaviors, messages, and campaigns can then be specifically tailored towards these audiences.
Here, we’ll briefly discuss a few reasons why behavioral segmentation is essential.
Behavioral segmentation doesn’t only reveal the specific interests of customers in terms of products or services, but it also shows the channels your customers spent most of their time on.
Apart from that, it also goes further to help you understand the types of messages that catch their attention. With the understanding of this, you can be able to put the right strategy together and boost your conversions.
Looking closely at the patterns of each segment, you can easily recognize and identify trends. Apart from that, this will help you make adequate and practical plans for the future.
Since you’ve been able to know the specific segments that spend the most and their method of spending, it will help you further allocate your effort in targeting them.
What are the Examples of Behavioral Segmentation?
The most common nuances of behavioral segmentation involve some metrics. How users turn to customers (acquisition), how users use the app (user’s journey), how users are more frequent in utilizing the product (engagement), and the duration of time they continue using the product (retention).
Acquisition, user’s journey, engagement, and retention are all crucial factors to keep in mind when it comes to analyzing the behavior of your customers.
Having a clear cut of the ways your users interact with your product is an excellent way of accomplishing a constructive and sustainable strategy for behavioral segmentation. Here are examples of behavioral segmentation:
Purchasing and Usage Behavior
To understand this, let’s use the ride-sharing instance as an instance. This service is used by working professionals to commute to and from the office during weekdays.
However, during weekends, the user is left with extra time to drive, park, and trek to their various destinations. This will appear as if they never used the service at all.
With an excellent mastery of the user’s behavior, the ride-sharing service could be used to target discounts during the weekends to incentivize usage on the days they wouldn’t ordinarily use the application.
As a means of forecasting their demands, most companies understand the power of tracking their purchases, usage, and consumption of their products and services. If you want to understand the effectiveness of your marketing, segmenting customers based on their purchase behavior is highly essential.
The framework of behavioral segmentation considers some factors as determinants for making a purchase. These include customer’s life, year or day.
Life milestones such as house or establishment of a company, seasonal purchases such as Christmas gifts, and daily purchases such as food or coffee all stand as variations for occasion purchasing.
With occasional purchasing, you can target your customer with an incentive to woo them for another purchase later in the day. Since these regular customers will likely have an occasional afternoon coffee, you can make use of tools like email marketing and push notification within their mobile apps to offer them happy hour events.
One other factor that differentiates behavioral segmentation is the benefits different users seek from experience. In our earlier example of push notifications on mobile apps, some of your customers can be compelled as a result of their convenience of ordering through the mobile app. And you would prepare their products while they pay whenever they come for pick up.
Understanding the benefits users sought from different experiences with your products or services is an excellent guide to better service each segment with that experience.
Other examples of behavioral segmentation include customer loyalty, customer satisfaction, engagement level, user’s status, and so forth.
Now that you have a basic understanding of what behavioral segmentation means, why it is essential, and the examples, you can begin the journey of optimizing your users according to the behaviors they exhibit.
Remember, understanding every step taken during your customer’s trip is highly essential in determining the steps you need to take as a marketer.