Advertise to the right customer with behavioral segmentation — an overview and definition
In this article, you can expect to learn:
- Definition of behavioral segmentation
- Purpose and importance of behavioral segmentation
- Characteristics of behavioral segmentation
- Pros and cons of behavioral segmentation
- Types of behavioral segmentation
Definition of behavioral segmentation
Behavioral segmentation refers to the process of grouping users based on their previous actions in the customer journey. A group of users with similar behavioral profiles is known as a segment.
Purpose and importance of behavioral segmentation
Behavioral segmentation is important because it helps you:
- Identify segments. Segment consumers by their wants and needs. By doing so, you’ll have a better chance of getting the same reaction from consumers in the same segment.
- Determine product relevance. You’ll better understand if a product is relevant to a particular segment.
- Tailor your product or service. This gives you the opportunity to update your product to be more relevant, meet a segment’s needs, and drive brand loyalty.
- Create tailored marketing campaigns. You can increase the probability of purchase if you zero in on a segment. The more personalized to them, the better.
- Discover optimization opportunities. The buyer’s journey is something to be tweaked and refined based on segment characteristics.
- Identify competition. Who has a hold on your customer base? Seek out the competition and analyze why they’re successful.
- Develop an improved marketing strategy. You can use behavioral analytics to help create a strategy to expand your customer base.
Characteristics of behavioral segmentation
A few of the most common segments that customers are grouped by are their age, gender, location, income, and occupation. Additionally, their buying behavior, consumer status, personality, and loyalty can be analyzed and similarly grouped.
Pros and cons of behavioral segmentation
Pros
Explore the pros of behavioral segmentation:
- Improves targeting accuracy. Find customers with similar buying habits and behaviors, then align your marketing and sales teams on a plan of action.
- Sifts engaged users from uninterested. You can put more time, money, and effort into cross-selling and upselling to key segments and avoid wasting time on customers who rarely buy or spend much less.
- Provides a more personalized experience. These days , at least a little personalization is expected from online consumers. It makes their customer journey easier, more enjoyable, and if done well, unforgettable.
- Makes it easier to track success — Continue monitoring a segment through a marketing campaign’s performance and gain even more insight into their behaviors.
Cons
Here are a few disadvantages to behavioral segmentation:
- Consumer behavior changes. Humans, which obviously include your consumers, are inherently unpredictable.
- Reliant on certain assumptions. It’s important to remember that it provides a frame of reference based on personality and behavior, not confirmed facts.
- Based on complex data. It’s a complicated approach that isn’t always easy to understand.
Types of behavioral segmentation
It’s useful to understand the different groupings of consumers. Here are a few types of behavioral segmentation:
- Occasion-oriented behavioral segmentation. This is when a product is purchased only for a particular occasion.
- Usage-oriented. This is based on how many times a consumer uses a product.
- Loyalty-oriented. The higher the level of brand loyalty from customers, the less a company has to worry about acquiring new customers.
- Benefit-oriented. This is for customers looking for a product with the maximum benefits. These could come in different forms — availability, variety, or affordability.
Related reading
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