Creating a tailored advert and product comes with understanding and segmenting your audience based on certain behavioral characteristics that’ll influence their buying decisions. This is one of the many reasons you should take behavioral segmentation more seriously.
However, the mistake brands make is using common options of segmentation available like demographic or geographical. This is great if you’re out to understand the basics of who they are and where they stay. For deeper insights, you have to find out what they do. And these two types of market segmentation alone cannot provide the answers to that question.
This is where Behavioral Segmentation comes in. It is understanding not just who they are, but what they do. And with all these factors combined, you’ll be able to thoroughly deliver ads, products, and services to the right audience.
What is Behavioral Segmentation?
Behavioral segmentation is one of the four types of market segmentation that groups an audience based on their behavioral traits and action towards a product/service. This type of segmentation focuses on how an audience interacts with your brand like how many times they click on an ad or how often they open and engage with your email campaigns.
Often enough, behavioral segmentation further helps segment audiences who have already gone through demographic and geographical segmentation. So, companies usually use behavioural segmentation to validate the conclusions derived from other segmentation types.
The more detailed audience segmentation is, the better insights you’ll get. Using these insights, you can further optimize your target marketing strategies and offer value each segment will resonate with.
Why is Behavioural Segmentation Important?
Behavioral segmentation is a very important aspect of market segmentation not just because it looks into what your users are thinking when they buy, but because it improves the overall quality of your product and service. Here are some of the other benefits it poses;
- It helps you create targeted, beneficial marketing ads and messages.
- You can work on product improvement and development by gaining insights into what feature is valued more/less in your product.
- It improves customer experience because you’re providing what is valuable and appealing to them.
- You can identify their purchasing interests and carve out marketing niches.
- It helps you save resources by spending less on targeted marketing.
- You can discover growth opportunities and use the results to optimize subsequent marketing campaigns.
Types of Behavioral Segmentation
Seeing how broad a user’s behavior can be towards a product/service, further breaking down the components of the characteristics you want helps provide a clearer picture. With this, you can segment your audience by behavior in many ways. Below, I’ll be showing you six useful types of behavioral segmentation you should consider implementing in your marketing strategy;
1. The Buyers’ Stage in the Funnel
In your sales funnel, every user has a stage they belong to. Whether they are new leads or returning customers, where they are will determine the type of ads and method of approach you use. An example is pushing for a product upsell to a lead at the top of your funnel. Imagine how horrified and lost that user must feel seeing that ad. This is where this type of behavioral marketing comes in.
By grouping them based on where they are in the purchase lifecycle, they can see targeted messages that identify and answer the questions they have. You’ll also be able to identify their unique needs and adequately provide solutions.
So think about the possible stages in your sales funnel. A typical funnel has an awareness, interest, decision and retention stages. Each of which should clearly depict the journey from discovering your brand, showing interest in what you’re offering, deciding that they want to go with your product and then retaining them as loyal customers. Each stage comes with different interests and it’s an excellent way to segment your audience.
Using this segmentation type, you can create a deeply personalized user experience for every member of your target market. And you should know excellent user experience plays an important role in converting leads. In the long run, when your target enjoys the experience you provide on your platform, they have a higher chance of converting into actual paying customers.
The difficulty here is that some users will exhibit certain characteristics that’ll make it harder to group them in one segment. Simply take a little more time to gauge how they would act in different stages of the funnel. It’ll get easier.
2. Level of Engagement
Another type of behavioral segmentation is the level of engagement a customer has towards your product. This could be how often they use your service or the amount of time they spend using your brand.
An example is when you’re doing a churn analysis for retargeting. You need to understand where to place every member of your audience to determine whether or not they’ve churned. And this is a great way to do that. Another use-case scenario is where you need to advertise a seasonal discount campaign to a customer segment that rarely uses your brand.
The best way to do this is by creating a sub-category of users. You can divide this segment by frequent customers, customers who occasionally use your brand and those who rarely use your product. With these segments, you can further introduce targeted marketing campaigns that’ll appeal to them.
For the frequent users, you already know they are loyal to your brand, so you can push for a product upsell or introduce features that’ll be useful to them. The occasional customers might require a nudge towards being really loyal, so you can introduce maybe vouchers and discounts to this segment. And finally, for the customers who rarely use your product, you can choose to send out a survey to find out why they’ve stopped buying.
The beauty of this type of behavioral segmentation is that it greatly improves customer engagement with your product. They see that you understand their needs and that you’re making a conscious effort to appeal to them. Once the engagement improves, they’ll continue choosing your brand which will also significantly reduce your churn rate. In the long run, you’ll get brand visibility and build trust.
3. Spending Habits
An associated behaviour with customers is how they spend on your product/service. This is a category that helps you understand how and when a customer is likely to purchase a product. If there are certain favourable circumstances or unlikely scenarios of them spending.
This behavioral segmentation is excellent for when you have a number of payment channels or if you’re introducing a new payment method. Some of the ways to categorize these users are whether or not they like to buy in person. If a customer is skeptical about using online payment channels, you have to constantly assure them that your end is secure or introduce them to one of your offline stores.
Another great example is if they like to use coupons or not. This way you know who to offer marketing ads on coupons and vouchers. Finally, do they like to come during sales or they buy all the time? The answers to these questions will help give a direction towards what type of marketing campaigns to introduce, how often a sales or discount offer should last amongst other insights. It is also excellent if you’d like to introduce a customer loyalty card.
Timing is an excellent type of behavioral segmentation because it focuses on when your customers engage and transact with you. This is an effective type of segmentation if you own a seasonal business. An example is a store for holiday ornaments. You’d have to segment your customers based on when they come shopping for your ornaments. Do they come during the fourth of July, St. Patrick’s, or Christmas? The answer to this question will help you create targeted campaigns for each segment.
Another example of how timing can be an essential type of segmentation to your business is when you need to determine an opening and closing hour. If you own a bar and restaurant, for instance, you’ll be able to decipher when a customer comes to have drinks or when they want a take out.
Timing is great because, it helps you understand when you get your highest transaction volumes in a day, month and year. This means a more holistic revenue report and budgeting. Also, timing helps you create targeted campaigns to the right audience.
5. Products and Solutions Benefit
This type of behavioral segmentation looks into what particular feature, or product (if you have more than one), a customer patronizes. While all features of your product may be great and out to solve a particular problem, you should know that what appeals to one segment might not look interesting to another.
By segmenting your audience based on what they find valuable, you’ll be able to provide more value and solutions that’ll be personally beneficial to them. An example is seeing that a customer is only interested in sunscreen and skincare routines that prevent sunburns. It’ll be beneficial to them when you introduce similar forms of skincare products rather than advertising a full-on moisturizing body wash they might find unnecessary.
Another example is if you own a chain of products like dairy. You need to know the customers that’ll be interested in full cream will not want to try out almond milk. And customers interested in soy milk won’t really care about the nutrition fresh cow’s milk offers. So it’s finding out what type of milk they find nutritionally beneficial to them.
The beauty of beneficial segmentation is that it helps you discover unique value proposition statements for each feature of your brand. Plus, you know what aspect of your product needs improvement and you can continually work on making it better for your interested audience.
6. Purchasing Habits
Our final behavioral segmentation category is purchasing habits. In this category, you segment your audience based on what influences them to make a final purchase. This can be further grouped into personal preference and loyalty.
Now a customer with a personal preference will probably look through reviews, functionality and all the available options before making a choice. In the end, you know that this is what they want after seeing all the alternatives they could have gone for. A customer with loyalty will just stick to a brand they’ve probably become comfortable with over time.
Sometimes, other factors might influence a customer’s purchasing habit as well. In the case of money, do they like luxury items or do they prefer to stick to the affordable items in stock?
This is an excellent way of segmenting because it helps you understand what influences your customers. Therefore, you know what they’ll be expecting and you can tailor your campaigns to what they’d find interesting. It’s also great for when you need to rearrange the order of pricing in your store. You can know what range would be likely appealing to them. Finally, you can easily identify any probable challenges a customer is likely to face while patronizing your brand.
How to Effectively Segment Your Audience Based on Behaviour
Seeing all the probable ways you can segment your existing audience is a start. To get the best out of your segmentation, you have to get it right. So, to effectively segment your audience based on their behaviour, here are a few tips;
Identify your audience
The first tip is to know your audience. Who are you segmenting? You can do this by researching your pre-existing database or conducting a simple customer and market survey. Funeljoy offers built-in optimized form templates you need for your surveys. Plus, there’s a drag and drop editor that helps you easily customize for your needs.
Use only insightful data
Be sure to use data that you’ve collected from your audience research. This will help you understand them better and launch an effective campaign.
Create a buyer’s persona and map out a journey
Remember what I said about a user’s journey. You need to understand a user to be able to envision their interests and challenges. Create three or more buyer personas to help you cover all customer scenarios and then create a sales funnel that depicts what their typical journey to purchasing your product will look like.
Develop a campaign based on behavioural segmentation
Now that you know all about behavioral segmentation, create a campaign that targets users from each segment. Develop content and marketing messages that’ll solve a segment’s problem or better still pique their interest. Observe the engagements you get from each campaign and then take the results for future campaign optimizations. Remember, the only best way is what gives your brand the best results and that comes from continually trying new things.
Creating segments and campaigns tailored for each segment requires a number of tools for creating lead-generation, nurturing and consumer retention campaigns. Plus, you’ll be doing a number of A/B tests to find out which variation of your pages gets you the most results. With Funneljoy, you can create landing pages, opt-in forms and even build your entire sales funnel. All of which you can test multiple variations. Interested? Schedule your personalized demo today.