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The upcoming Web 3.0 will mostly rely on user data to deliver a more personalized experience to the users. And what better way is there to personalize the user experience other than segmentation?
74% of customers expect personalized content and are frustrated if they’re not provided with it. And behavioral segmentation plays a vital part in providing personalized experiences. That’s not all though, there are nuances of behavioral segmentation that need to be elaborated.
In this blog, we tried to cover the basics of behavioral segmentation with the know-how of using it in your email marketing strategy. Plus, you’ll get some real-life examples of various types of behavioral segmentation!
What is behavioral segmentation?
Behavioral segmentation refers to the process of segmenting your contacts into segments based on their behavioral traits while interacting with a business. It aims to understand and fulfill the unique needs and desires of each diverse customer group.
Along with that, behavioral segmentation optimizes the buyer’s journey and quantifies their value, all to develop a smart marketing strategy to improve and expand the customer base. There are several behavioral traits to consider. Some worth looking at are:
- The pages your prospects visit upon entering your website
- How much time they take to decide before making the purchase
- Their attitude toward your brand and service
- The occasions they make the purchase
What are the benefits of behavioral segmentation?
Let’s get real, the one-size-fits-all kind of marketing doesn’t work anymore. Brands are trying to provide a more personalized experience and segmenting your customers by their behavioral traits is the key to that.
But that’s not all, behavioral segmentation has more perks that you can unlock by integrating it with your marketing strategy, including:
- Top-notch personalization: Behavioral segmentation helps you provide a deeper level of personalization to your customers. For example, if a customer has frequently bought a fishing rod and other fishing equipment, you can boost your sales by suggesting them a fishing bait or filleting knife.
- Accurate messaging: Behavioral segmentation allows you to send specific and better-targeted messages to your prospects. Identifying your user demographics’ behavioral patterns enables you to send messages that relieve your prospects’ pain points.
- Picking out leads from prospects: Most marketers are allocated limited resources for marketing a business. Implementing behavioral segmentation makes your marketing cost-effective because you aren’t wasting money on warming up cold leads. Instead, you can filter out prospects who show the highest levels of engagement and concentrate on them.
- Building brand loyalty: Behavioral segmentation allows businesses to support, engage, and appreciate target customers throughout every stage of their buyer’s journey. Moreover, personalization makes them feel valued, which can boost a customer’s lifetime value and reduce churn.
With behavioral segmentation, you’ll be able to create brand advocates who’d spread the word and generate new clients through word-of-mouth marketing, all without additional marketing expenses!
5 types of behavioral segmentation with examples
Behavioral segmentation is a broad term engulfing many diverse human traits while making a purchase. Even though there are a lot of types of behavioral segmentation, there are primarily 5 types of behavioral segmentation.
In this section, we will focus on these 5 types of behavioral segmentation and give real-life examples of them so you can understand them better and have a clear idea before you start implementing these in your marketing workflow!
Let’s dive in!
Purchase behavior-based segmentation
Each of your customers will respond to different marketing materials or incentives. As a result, targeting all your customers with the same messages won’t work. So, how do you determine what marketing material to send and to whom?
The sole objective of behavioral segmentation is to know more about your customers so you could tailor your marketing efforts differently for different customers.
Segmenting your customers by their purchase behavior does exactly that.
See, the process each and every customer goes through before purchasing anything can be vastly different. But there can be so many variations. After all, each of them wants the same thing —purchasing something, right?
Let’s go through the parameters customers usually consider before making a purchase:
- The expense of the product and whether they need it or not
- Talking to friends or people with common interests about a certain product or service
- Weighing up the prices and considering alternatives of the product
- Reading reviews or testimonials of the product
- Brand perception among the consumers
- If there’s a great deal available on a certain product or not
- The time of year, and so on
Now that we’ve covered the factors customers consider before making the purchase, let’s go through the purchase behaviors brands need to take into account:
- Customer interaction: The number of interactions a customer needs before conversion
- Search queries: The search queries the prospects used to locate their brand
- Ad clicks: The specific ads a customer clicked before making the final purchase
- Email metrics: The marketing email a customer opened or clicked through
- Direct customer interactions: Questions asked by a specific customer during live chat or virtual assistant interactions
- Purchase frequency: The frequency at which your customer makes a purchase
Understanding the barriers customers face in the path of making the purchase along with understanding the set of behaviors that are most predictive can help businesses tailor their marketing strategies according to customer needs.
The purchasing process can be complex, with customers approaching it in different ways and playing different roles.
Customer’s purchase behavior-based segmentation successfully encompasses all of your target customers in your marketing campaigns no matter how different they are —allowing you to tailor hyper-personalized emails. One such example is order confirmation emails where brands upsell other products.
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Your prospects may belong to the same demographic but have very different values they prioritize and a whole other set of benefits they seek from a product or service. Benefit-based segmentation focuses on categorizing your audience based on the unique value proposition your customers are looking for.
Even if one of your marketing approaches works exceptionally well even without benefit-based behavioral segmentation, you’d still be the one trick pony that misses out on thousand other potential sales and above all, being the brand that is loved by everyone.
Benefit-based segmentation enables you to be able to narrow down the specific reasons why your customers purchase what you offer. This reveals the things you’re doing well and what are the things that could be done better to acquire more customers.
The benefits an individual customer seeks, though are different but they roughly fall into one or another sub-category. The primary benefits your customers seek from your product or service might be:
- Lower prices: Customers seeking lower prices may be drawn more toward the products that offer discounts or value for money.
- Convenience: Customers who value convenience buy products that are easy to use or require minimal effort. For example, Apple offers a range of easy-to-use and intuitive products like the iPhone, iPad, and MacBook for their target customers.
- Performance: Performance-centric customers prioritize products that deliver better results, are durable, and have a superior build quality. For instance, Nike targets customers who value performance by offering high-performance running shoes and sports apparel for them.
- Social status: Customers who long for higher social status may be more interested in products that are perceived as high-end or exclusive like a Rolex watch.
- Sustainability: Customers seeking sustainability would look for products from eco-friendly companies that share the same values as them like leaving a lower carbon footprint.
- Health benefits: Customers who prioritize their health would opt for healthier alternatives. Whole Foods, a food product brand, for example, targets health and eco-conscious customers with organic and sustainable products.
Occasional and timing-focused segmentation
Imagine you’re having a lazy couchsurfing Sunday and in no mood for cooking anything, not even instant ramen. At that very moment, you receive an email from your local food delivery service and hit that order in button. This is something most people do, make a purchase if the timing is right.
If we break down both the buyer-seller’s POVs in the aforementioned scenario, we can figure out that ‘timing’ played the main role there. The marketing email was sent to the right person, at the right time and thus played the leading role in the purchase making.
Occasional and time-based segmentation takes your customer’s purchase behavior, specifically the time and occasion when they are most likely to make a purchase, and categorizes them according to that.
Occasional and time-based segmentation can be done by closely monitoring a customer’s purchase times and dates to establish a pattern so you can target your customers preemptively in the given timing and secure your sale.
There are many ethical ways to collect your customer’s personal information. Such as:
- Creating email subscription forms
- Generating engaging lead magnets
- Conducting surveys on users’ purchase behavior etc.
It’s also ideal to find out the possible occasions and timings that matter to your business and resonates with your audience. For example, you can send a we miss you email to those who haven’t been engaging with your business lately. Finding these habitual patterns can take a bit of time but once you do so, you can warm up your customers before the occasion.
Customer loyalty-based segmentation
65% of a company’s business comes from existing customers AKA loyal customers. Meaning, loyal customers are the ones who generate the bulk of your revenue.
Loyal customers cost less to retain while acquiring new customers involves a lot of effort and they take out most of your marketing budget. Overall, repeat or loyal customers have the highest lifetime value than any other type of customer.
Segmenting your customers by their loyalty level helps you gain more and more loyal customers by providing you with the answers to these crucial questions:
- What are the key factors and behaviors that lead to customer loyalty?
- Which customers will respond and opt-in for your loyalty programs?
- How can you keep your loyal customers happy?
- How to maximize the lifetime value of your loyal customers?
Moreover, segmenting by customer loyalty has some obvious benefits, including:
- Improved customer satisfaction: By targeting loyal customers with personalized marketing material, businesses can provide a better customer experience and increase their overall satisfaction.
- Higher lifetime value: Loyal customers are more likely to make repeat purchases which result in a higher lifetime value for your business.
- Word-of-mouth marketing: Loyal customers can turn into your brand advocates and provide valuable word-of-mouth referrals to their friends and family, which helps to increase the customer base and overall brand awareness.
- Competitive advantage: You can gain a massive competitive advantage in the market by providing value and retaining loyal customers which will prevent your customers from being poached by your competitors establishing your supremacy.
A prime example of customer loyalty segmentation would be how the airline industry rewards its repeat customers with its frequent fliers program. Another great example would be how Starbucks rewards where customers earn stars for each purchase, which can be redeemed for free drinks and food items, as well as other perks like free refills.
Buyer’s journey-based segmentation
A buyer’s journey is the process that a potential customer goes through in his customer journey to become aware of, consider, and make the decision to make the purchase. It typically consists of three stages:
- Awareness: The buyer identifies a problem, researches solutions, and seeks educational content
- Consideration: The buyer evaluates potential solutions, compares options, and looks for product information and reviews
- Decision: The buyer chooses a solution, weighs out options, and finally makes the decision
Your customers interact with your business in various stages and through different channels and in random order. For this reason, it is difficult to determine where exactly a buyer belongs in the buyer’s journey based on very few interactions.
To accurately identify a customer’s stage in the buyer’s journey, you need to collect their behavioral data from different channels and different touchpoints and create an algorithm based on their behavior pattern over time.
Buyer’s journey-based segmentation will help you customize your messages for each potential customer belonging to their respective customer journey stages. As a result, you’ll end up building an excellent customer relationship through personalized messaging.
To segment your customers based on the buyer’s journey, start by analyzing customer behavior data across different touchpoints and channels. It’s also ideal to conduct website analytics, track email marketing metrics, monitor social media handles, and arrange customer feedback campaigns.
Use this data to identify customer needs and preferences for customers belonging to different stages of their journey, create targeted campaigns, and provide personalized messaging that speaks directly to them.
By understanding where customers are in their journey and tailoring your messaging accordingly, you can increase engagement and drive more conversions.
5 steps to use behavioral segmentation for hyper-targeted email marketing
Behavioral segmentation is a powerful email personalization tactic that can help you tailor your email marketing according to the specific needs and preferences of your recipients. Here’s how you can start implementing behavioral segmentation in your email marketing strategy:
- Gather data: Behavioral segment requires your user activity data. Gather data about your audience by their various activities such as the products they’ve purchased, the content they’ve engaged with, or the frequency of their visits to your website. Collect data on your subscribers’ behaviors through analytics various tools, CRM systems, or email marketing tools.
- Employ an email segmentation tool: An email segmentation tool can do wonders for your upcoming email campaigns. Automating your email segmentation will help you streamline your efforts and make sure your contact list is segmented accordingly.
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- Define your segments: Define your segments by identifying groups of subscribers who exhibit similar behaviors based on the collected data. For instance, you might create a segment of subscribers who have opened and clicked on your email campaigns in the past month.
- Create targeted email campaigns: Tailor your email campaigns to meet the interests and behaviors of each segment. For example, if you have a segment of subscribers who have abandoned their carts, you might send them a series of reminder emails with personalized product recommendations.
- Test and optimize: Finally, start testing and optimizing your email campaigns to improve their effectiveness. Use A/B testing to experiment with different subject lines, email content, and CTAs to see what resonates with contacts belonging to each segment.
By using behavioral segmentation in your email marketing strategy, you can deliver targeted, relevant content to your subscribers that are more likely to resonate with them, increase engagement, and drive conversions.
If you’re still unsure how to proceed, start by reading our definitive guide to behavioral email marketing.
Transform your email marketing with behavioral segmentation!
Behavioral segmentation provides answers to some crucial questions to reveal marketing secrets like the reason people choose to buy from you. It perfectly complements other segmentation and marketing strategies and fits in with any marketing strategy you might be thinking of and provides extreme value within.
We tried to cover behavioral segmentation and the different ways to employ it. Hopefully, now you can start employing it in your email marketing strategy and transform your email marketing.
Let us know how you’re using behavioral segmentation in your business and how it’s helping you. All the best!