Behavioral Segmentation - Definition, Types, Examples & Advantages (2023)

If a company wants to have the maximum benefit from the marketing and sales efforts, it must segment its customers. Most businesses are not aware of the benefits of marketing segmentation. But if they do so, they will be able to convert prospects into customers and then into loyal customers.

What is Behavioral Segmentation?

Behavioral segmentation is a strategy that splits the customers’ market into smaller groups based on their buying habits and behaviors.

Companies start the process of behavioral segmentation by studying how customers are converted, and then matching it up with the desires, wants, needs, and buying patterns of the customer.

Once you have identified the customers based on their common interests, behavior, and pattern. Next, you should have a separate email marketing campaign for every segment of your target group.

Although it may seem ambiguous and complicated, and it may be sometimes, but today I’ll explain to you that how you can segment your target market behaviourally.

Why Marketers Use Behavioral Segmentation

Behavioral segmentation is one part of the demographic and firmographic segmentation, where marketers start with assumptions rather than facts. It means that marketers have to find a correlation between the irrelevant characteristics and buying patterns of customers and group them in a certain demographic. For instance,

‘‘a 13 years old girl from Milwaukee is more likely to buy hair clips than a forty-five years old man from Boca Rotan.’’

In simple words, behavioral segmentation helps the marketers (email) to find the needs, wants, motivation, demands, and mindset of customers. It is very important to know that what age of gender (male or female) have what needs and wants, and how they change over time.

Some may find it ordinary information, but the key to the successful marketing strategy lies in the context of behavioral segmentation.

How to Use Behavioral Segmentation In Business and Marketing

It would be much simple and easier if you market and focus on the smaller segment of the market with common characteristics. Rather than targeting the bigger segment with a plethora of marketing; because it would attract the attention of only the small percentage of the market. On the other hand, a well-focused smaller marketing campaign targeting the needs and wants of customers would have a better chance of success. That’s how businesses can allocate their resources by having such a marketing campaign.

For instance, you are looking for one motor to replace it into your robot. If the shopping mall is providing a special offer on 5 or 10 motors, then you avoid it. It’s because you only need one.

The point is that customers are very precise and specific about their needs and wants at the time of shopping. If you offer them, what they need and looking for, only then you would have their attention. It is all about finding the right idea in the right mind at the right time and the right place.

Advantages of Behavioral Segmentation for Businesses

Some of the benefits and advantages of behavioral segmentation are as follows;

It Makes Marketing Life Easier

The market of the 21st century has become very competitive, it doesn’t matter whatever your product or service is. The point is that every field or category of the product is competitive. However, it has become very important to differentiate yourself in the era of competition and stand out in the crowd. Behavioral segmentation can make your life easier by providing you with an opportunity to understand the behavior and attitude of customers.

Once you have the information about the behavior of customers, and you have successfully divided the market into different segments. Now, your marketing team and sales staff can easily apply those behavioral strategies. There won’t be any miscommunication and confusion among the sales staff, and they would give the complete attention to their customers.

Predicts and Monitor Performance

Once you have divided the targeted customers into different groups based on the common characteristics, and your marketing team and the sales staff have the data. Once you know that what your customers expect from you based on the available data you have. You can predict the questions and responses of your customers, and you can also monitor the performance of your sales staff. It provides you with an opportunity to improve your communication channel, update marketing strategies, and update the product or service based on the requirement of customers.

Everyone Loves Personalization

Technology and social media have made people very important, and they won’t fall for traditional marketing strategies. Once you have the information about the behavior and attitude of customers and you know their pain point. It’s time to use such information and send personalize marketing messages to your customers. When you would send different personalized messages to the different segments of the market, then it would make your customers feel connected to your brand, and they would respond affectively.

Build Loyalty to Your Brand

As we know that loyal customers are an asset to your company, and the marketers of your company don’t have to spend too much effort convincing them. A little about the new product/service would be sufficient for them. If you use the personalized marketing strategy based on the behavioral segmentation, then it would attract more customers to your brand and increase brand loyalty among them.

When Apple launches a new model of iPhone, then loyal customers visit the nearest store and buy it from there. This is a very good example of customer loyalty.

It doesn’t mean that you should exclude the loyal customers in your marketing plan. If you exclude them in your marketing, then it would make them feel neglected and they would leave your brand. Therefore, your marketing strategy should include both new and old customers. Loyal customers want something different in your brand, and new customers would look for something else in your brand. As you marketer, you should know the different segments of the customers’ requirements.

Types of Behavioral Segmentation with Example

Some of the four types of the behavioral segmentation with appropriate examples are given below;

Purchase Behavior

As a marketer, you should collect, study, and analyze the customers’ data, and understand that what motivates prospects to become the actual customers. What factor influences the decision-making process of buyers? You should study the landing page, conversion rate, clicks, and engagements.

After collecting data, you should categorize the data into different segments based on the common traits. Like different groups of email list, and there should be different message for every group.

Example

Amazon, the world largest e-commerce brand, studies the visitors’ clicks, choices, and buying patterns of customers. However, when customers visit the store next time, Amazon would show them the products relevant to their purchase history, clicks, and pattern of choices.

For instance, if you one detective book. Amazon would show you the list of other detective books because the software studies the pattern.

Customer Loyalty

You can have the customers’ loyalty data from the CRM software. It would show you the list of customers who spent money on different products. It would also provide you the information about social media shares, referrals, clicks, and customers’ engagements.

Once you have found out the loyalty factors that motivate customers. Now, you should use those factors in the marketing campaign, and make the advertisements more personalized. More personalized marketing and promotional campaign would greatly impact the purchasing behavior of customers, and increase customers’ loyalty.

Example

Facebook, the world’s biggest social media platform, uses the same strategy for its advertisement tool to identify loyal customers. When you like, comment, and share some particular kinds of posts and videos. The software would develop the pattern and it would show you the similar kinds of post and videos.

If you’re using Facebook’s advertisement tool, then you can target the same people who are viewing and showing response on your posts and videos.

Benefits Sought

Benefits sought mean the satisfaction level of customers. If they are satisfied, then you would have more customers’ engagements and immediate responses from them. Now, you should find a common ground between your company’s gaols and customers’ choices. If you do that, then they would take the action what you want them to do.

Example

Email marketing is a very good example of it. If the customers are familiar with your brand, then they would immediately open up your email and respond accordingly. If you’re offering what customers want, then they would immediately take the action in the form booking flight, buying something, or taking some course.

Occasion Purchasing

Occasion purchasing comprises of those customers who visit your store and purchase product/service on certain events. Like Easter, Christmas, or Halloween. They are not regular customers, and you won’t find repetitiveness in their behavior. But they would respond to any kind of event.

Example

CRM software of Amazon or any other store would should you the record of occasional purchasers. From there you can collect the list of occasional purchasers who would be interested in the holidays or event. If you can target them on holidays with holiday products, then they would respond. You don’t have to spend much time on them rest of the year.

Conclusion

After carefully studying the whole article, you must have learned that behavioral segmentation means dividing the market into smaller segments rather than the big. If you do that, then it would increase the conversion rate. It would also save a lot of resources of your brand. Marketing research would cost you a little, but the data you collect would serve you in many ways.