Marketing segmentation has always been important. Yet, only 33% of companies using it say they find it significantly impactful. A big reason being that many companies depend solely on traditional approaches, such as geographical and demographic segmentation. Show
There’s no denying that knowing your average customer’s location, age, gender, etc. is essential to addressing their needs. Just understanding who they are isn’t enough, though. You must also know what they do — so leveraging other customer data, like behavioral data, is equally important. Without this, other segmentation data you’ve collected may be rendered moot. That’s why behavioral segmentation is a marketing strategy your team needs in its arsenal. What is behavioral segmentation?Behavioral segmentation divides consumers according to behavior patterns as they interact with a company. As the name suggests, this category of segmentation studies the behavioral traits of consumers — their knowledge of, attitude towards, use of, likes/dislikes of, or response to a product, service, promotion, or brand. The objective of behavioral marketing is to:
It’s important to note that it doesn’t exist independently from other types of segmentation. Characteristics such as a customer’s age, gender, location, income, and occupation frequently correlate to behavioral data. That means behavioral data can often be used to confirm certain conclusions about other segmentation data. Why is behavioral marketing important?Dividing the market into smaller segments, each with a common variable, allows brands to use valuable time and resources more efficiently. If all consumers experienced the same marketing technique, it would only work on some of them. By understanding your prospective market better, and dividing them accordingly, you can employ advertising personalization to ensure their needs are met: Behavioral targeting has four main advantages:
Use Instapage for your segments ➔ 7 Behavioral segmentation examples1. Purchasing behaviorPurchase behavior-based segmentation looks at how customers act differently throughout the decision-making process. It helps businesses understand:
Purchasing behavior can be broken down into four main categories:
Most customers fall into each of these categories at some point in their lives. Although, as much as their classification depends on their purchasing behavior, it also depends on the product purchased. By understanding how these two entities relate to one another, you can determine the best strategy to market your product or services to them. Use Instapage for your segments ➔ 2. Benefits soughtAs consumers research a product or service, their behavior can reveal valuable insights into which benefits, features, use cases, or problems are most applicable to them. And when a customer places a higher value on certain benefits over others, these primary benefits are the driving factors for that customer. Let’s revisit the shampoo example. People who buy different shampoos might do so for a variety of reasons:
This means two prospects may look identical in terms of their demographic makeup, but could have very different values regarding the benefits and features that are most important to them: So if you have several customers all seeking the same product for a different primary benefit -- and you message all of them about the same benefit -- you could be missing the mark with everyone else, wasting your time and budget. Use Instapage for your segments ➔ 3. Buyer journey stageBehavioral segmentation, according to the customer journey stage, allows you to align communications and personalize experiences to increase conversions at every stage. It also helps you discover stages where customers are not progressing, so you can improve your marketing efforts there. Segmenting customers by journey stage isn’t always easy, though. Customers in various stages still interact and engage with content in other stages, across a variety of channels, at all different times, and in no particular order. Therefore, a single customer behavior or interaction is not enough to pinpoint which journey stage they exist. To improve that accuracy, you must leverage all of their behavioral data across various touchpoints and channels so that you can build weighted algorithms based on patterns of behavior over time, like this: This prospect is currently in the consideration stage, but their behaviors occur in utterly random order, not in a linear fashion from stage to stage. Trying to identify a consumer’s buyer journey stage based on just one or two of their behaviors can easily lead to a wrong assumption. Above is a much more realistic view of how customer behavior can look, and by considering all of their actions, their current journey stage becomes clearer. Use Instapage for your segments ➔ 4. UsageThis category can be a strong predictive indicator of loyalty or churn and, therefore, lifetime value. It looks at:
Usage-based segments include:
Segmenting by usage helps brands understand why certain types of customers become heavy or light users. It enables them to test different marketing initiatives to increase usage from lower use customers and potentially attract new heavy usage customers. Use Instapage for your segments ➔ 5. Occasion or timingOccasion and timing-based behavioral segments typically refer to both universal and personal occasions:
PatPat takes the universal occasions approach to advertise to Facebook users for Black Friday and Christmas: A more modern application of timing-based behavioral segmentation deals with time (day/week/month) when a customer is more apt to engage with a brand or be more receptive to offers. This includes individuals’ preferences for reading email, browsing social media, researching products, and more. For example, Marco’s Pizza sends emails on Fridays more than any other day of the week because people are much more likely to order pizza over the weekend. Use Instapage for your segments ➔ 6. Customer loyaltyCustomer loyalty goes hand-in-hand with some of the other behavioral segments, such as purchasing behavior, usage, and timing. The difference, though, is that habitual customers are continually in need of the product or service you offer, while loyal customers continually purchase your product or service. It’s vital to segment by customer loyalty because these people generate the bulk of your revenue, cost less to retain than acquiring new customers, and have the highest lifetime value. Therefore, you must maximize their value and find more customers like them. Customer loyalty behavioral segmentation may yield valuable answers to important questions such as:
Here’s an example of behavioral segmentation from Ladles, offering a $2 discount on a future purchase for being a loyal customer: Other industries that frequently use customer loyalty segmentation are hospitality (preferred hotel guests), travel (frequent flier programs), and finance (platinum credit card members). Use Instapage for your segments ➔ 7. User statusUser status is another way to segment customers behaviorally. Some of the most common include:
This email was likely sent to regular users -- customers already signed up with Alignable, but possibly ready for an upgrade: You can always choose to create other user statuses outside of this list. Just remember, the likelihood of retaining customers depends mostly on where they stand as users, to begin with -- and the more regular users you have, the better. Online behaviors matterAs with the other types of marketing segmentation, behavioral segmentation gains a better understanding of who your target customer really is. The better you know and understand a customer, the more personal the value proposition you can offer, and a greater chance your offer will hit home and convince them to purchase. Get an Instapage demo and see how our platform allows you access to a suite of tools to significantly improve your advertising ROI and streamline your post-click process. Which type of segmentation primarily focuses on dividing the market using the group's values attitudes and interests?Demographic segmentation refers to dividing the market based on consumer attitudes, interests, values, and lifestyles, whereas geographic segmentation refers to dividing the market based on measurable characteristics about people.
What are the 4 types of segmentation?Demographic, psychographic, behavioral and geographic segmentation are considered the four main types of market segmentation, but there are also many other strategies you can use, including numerous variations on the four main types.
What type of segmentation is attitude?Attitudinal segmentation is the grouping of customers into target groups, based on shared attitudes – what individuals think and how they feel.
What is psychographic segmentation in marketing?Psychographic segmentation breaks down your customer groups into segments that influence buying behaviors, such as: beliefs, values, lifestyle, social status, opinions and activities.
|