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Why behavioural segmentation is the marketer’s secret advantage

Use behavioural segmentation to run more targeted, more effective marketing campaigns

What is behavioural segmentation?

Behavioural segmentation involves dividing your customers into groups based on how they interact with your organisation, product or service. This might be how often they buy from you, how often they use your service or app or how far along the customer journey they are. So the definition of behavioural segmentation is divvying up your client base based on behaviour. But that’s not the end of the story. Because behavioural segmentation really comes into its own when you use it to enhance your marketing efforts.

Behavioural segmentation is often seen as a step up from more traditional market segmentation methods such as geographic and demographic because it’s based on what customers actually do, rather than just who they are. But we’d argue it’s not a case of one or the other. Instead, it’s best to complement behavioural segmentation with geographic and demographic data. This allows you to flesh out your customer segments. Let’s imagine you sell a fitness app. You have a segment of regular users in rural Scotland and another in London. It makes sense that the group in rural Scotland would have different wants, needs and pain points than their southern counterparts. And it follows that you’d want to retain each as a separate segment. Read on to find out how keeping these groups distinct can help your marketing efforts.

Colourful chalks representing behavioural segmentation

Why is behavioural segmentation important for marketers?

You can tailor messaging and campaigns

Behavioural segmentation is great for marketers. It allows you to better tailor your messaging and marketing campaigns. It’s much easier to focus on one particular audience and their needs at a time, rather than trying to cover the whole gamut all at once. And when customers sense that you’re addressing them specifically, they feel valued, making for a more effective campaign. You can even take your tailoring to the next level. Why not try using examples, expressions and cultural references that will truly resonate with a particular segment?

You can focus on segments that are likely to convert

Segmenting customers based on behaviour can also help you see where your marketing efforts and budget would be best spent. For example, rather than going after your competitors’ loyal supporters, why not invest your efforts in getting your occasional customers to buy more regularly? Or try to encourage your loyal customers to increase their spend or become brand advocates.

You can identify problems

A less obvious benefit of behavioural market segmentation is that it can highlight what’s working well and what’s not. For example, as you observe customer behaviour, you might notice that a large proportion leave your website at a particular point in the journey. Or that significant numbers buy from you once and never again. Delve deeper to find out what’s happening. Perhaps your website has usability or accessibility issues. Or maybe there’s a problem with your product. Finding this out is crucial. Because no matter how compelling your campaigns, if you’re not meeting customer expectations, they’re about as useful as a chocolate teapot.

The six main types of behavioural segmentation

1.   Purchasing behaviour

This looks at how your customers buy and what influences their decision to buy. Do they buy online or in person? Are they swayed by discounts or do they pay more attention to recommendations from friends? Do they buy multiple products at once? Or use a discount code?

2.   Benefits sought

This type of segmentation takes into account what your customers are looking for from your service or product. For example, with the fitness app we mentioned above, for some, price will be the most important factor. Others will be looking for the ability to log workouts or add personal goals. Still others may be motivated by the ability to customise their workouts.

3.   Occasion or timing

Occasion or timing is about whether purchases are linked to a certain event, time of year or time in a customer’s life. With our fitness app, we may see a spike in sales in the new year and the lead-up to summer, then a drop in usage as the festive season kicks into gear. You can also get granular with this and look at specific days of the week or times of the day. Meanwhile, specific times in customers’ lives such as when they’ve bought their first home or had a baby offer prime marketing opportunities for businesses such as home insurance providers, and DIY and homeware stores.

4.   Customer loyalty

Here, you’re dividing customers based on how often they buy from you. Are they occasional, habitual, regular or loyal customers? Alternatively, you could use the Net Promoter Score categories, segmenting customers into your detractors, passives and promoters.

5.   Usage

Usage is about how often a customer uses your product or service, rather than how often they buy it. Are they light, medium or heavy users? This type of behavioural market segmentation is particularly useful for businesses where there’s greater variation in usage than purchases. For instance, with our fitness app, let’s say all customers pay an annual subscription, but some use the app as much as three times a week, while others use it just three times a year. It would be useful to prepare different campaigns for these two segments.

6.   Customer journey stage

This involves segmenting your customers based on their position in the customer journey. Are they right at the beginning in the awareness stage, or further along, in the evaluating or purchasing stage? Different messages will appeal when they’re just investigating and exploring, versus when they’re ready to buy.

Four examples of behavioural segmentation done well

1.   Remarketing and retargeting

The shopping basket abandonment email is a classic behavioural segmentation example. This is one we’ve probably all received at some point. It’s where you add items to your shopping basket but never complete the purchase. You later receive an email reminding you about those items. Sometimes you’ll also receive a discount code as extra incentive to go through with the sale. These remarketing campaigns can be very effective, because people abandon their shopping baskets for all sorts of reasons—maybe they were interrupted or lost signal on the commute home.

An excellent remarketing example is Airbnb’s approach to tempting users to complete their booking. If you’ve been looking for places to stay but haven’t made a booking, the app sends a push notification based on your search behaviour, with a message like this: “Pembrokeshire is waiting. Start planning your trip today.” Sometimes you’ll receive a notification that places in the area are booking up fast, encouraging you not to miss out.

Retargeting is another effective method. This is where users who click on certain products are presented with adverts for those same products across multiple different sites. Amazon does this especially well.

2.   Rewarding loyalty

This is a tried and true technique for keeping loyal customers happy. Customers are thanked for their support and often offered some sort of gift, such as a coupon for a certain percentage off their next purchase, so you’re encouraging them to repeat their past behaviours.

The most effective of these campaigns are specific. They mention what the customer has bought in the past and offer a discount off this or suggest complementary products. Some also play off the company’s brand values and make the customer feel good about themselves. Oddbox, a fruit and vegetable supplier focused on fighting food waste, does this well with its feel-good phrases like “Here’s what you’re rescuing next week!”

Another innovative example was when major British supermarket chains started sharing purchasing data with their loyalty programme members. Sainsbury’s informed customers what their top three products over the past year had been, and what they were the top buyer of. Many customers found this entertaining, sharing their statistics on social media and with friends and family. Similarly, Marks & Spencer congratulated its ‘health heroes’ on their many purchases of fresh fruit and vegetables.

3.   Checking in with lapsed customers

With this approach, the aim is to reengage customers who have bought from you in the past but haven’t for some time. When done well, the messaging shows the company cares about their customers and also asks if there are any issues that need resolving. It’s a marketing tool, demonstrating that you value your customers, but it can also uncover potential issues. A SurveyMonkey customer satisfaction survey can come in handy here, enabling you to really dig into the detail.

4.   Occasion-based promotions

This is where you tie your marketing message in with a relevant occasion or event and the customer behaviour that goes along with it. Traditional examples include promotions on relevant gifts for Christmas or Valentine’s Day, targeting people who have made purchases on those occasions in the past. More recent examples are Black Friday or Pride Month. Also, there are some occasions that are only relevant for specific companies, such as Earth Day for businesses with a focus on sustainability. Remember to make clear how the occasion you’ve chosen is relevant to your business and product.

Occasions apply not just to national or international events, but also to life events such as marriages, buying a home, having a baby or going to university, all of which suit tailored marketing campaigns well.

Tips for implementing behavioural segmentation

We’ve looked at the definition of behavioural segmentation, the different types of segmentation you can use and some excellent examples of this in practice. Hopefully by now you’re raring to get going. But where to start? Here are some of our top tips for implementing behavioural segmentation.

Use the data you have

Whether it’s website analytics, insights from your email campaign software or CRM, app data or, of course, SurveyMonkey survey results, start with the customer data you have. Think about which types of segmentation would be most useful for your business and marketing campaigns. Then get segmenting!

Create customer personas

Once you’ve segmented your customers and identified which groups you want to focus on, we recommend doing further market research to sketch out customer personas for each. Transform faceless data into people you can imagine, with fears, concerns, hopes and values. You’ll get a much more detailed picture of your segments and be able to relate to them more easily. As a result, you’ll be able to create marketing campaigns that really speak to each segment.

Define your positioning for each segment

This is about changing how you present your company and its products or services depending on the segment. For instance, you might emphasise quality for one segment, customer support for another and location for yet another. Thinking about your positioning first will allow you to hit the mark with your messaging.

Tailor your campaigns and choice of products

This is where you bring it all together. Tailor your marketing campaigns to each segment. Whether you’re using paid advertising, email campaigns or anything in between, make sure it’s a medium that your chosen customers use. Focus on products and services they’re interested in. And write specific content in a way that resonates with them. Focus not on all segments but on each segment individually, from Emma, occasional customer in Skegness, to Shilpa, loyal customer in Belfast.

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