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What are the Benefits of Behavioral Segmentation?

Every business is engaged in a constant quest to discover newer and more effective ways to stand out from the crowd. For a business owner or head of marketing, sales or business development, it’s a never-ending battle to stay ahead of the competition, and ahead of yourself too.

Benefits of Behavioral Segmentation

Companies dream of “customers for life” and this is perhaps not an unattainable dream even in today’s world, where attention spans have shrunk alarmingly, and competition has gone beyond cut-throat. Studies show that it costs five times more to acquire new customers compared to the cost of retaining an existing one.

However, though the health and survival of the enterprise needs super connectedness with existing customers, growth and expansion need simultaneous hyper efforts to explore newer markets.

One way to achieve this is through behavioral segmentation . This is part of the larger market segmentation that companies focus their business development efforts on.

Market Segmentation

Instead of viewing the market as an amorphous and anonymous entity, marketers learned early on to scope out the differences that make up the whole. It attempts to group clients and prospects into segments with specific attributes and common needs.

Marketers assume that these groups respond in a similar way to marketing messages. This helps the company to find the right way to target different customers who can appreciate the full value of your products and services and distinguish them from other offerings.

Early efforts divided views into demographic information, and included data such as age, nationality, gender, location, income status, and perhaps drilled deeper into details such as ethnicity. Today, market segmentation can be demographic, psychographic, geographic and behavioral.

The benefits of such a targeted approach are enormous and effective. It helps to clarify the available marketing opportunities and see them in the context of what the competitors are doing and assess the present level of customer satisfaction.

Segmentation also helps marketers to make the necessary adjustments in product distribution, placement and pricing and convey the right messaging to each appropriate segment. You can select the right medium of advertisement, and time it right so that it reaches the target more efficiently, with the minimum of resources and effort. Finally, all these efforts help to connect and provide the best services to your customers, keep them engaged and connected with your brand, and ensure long-term relationships.

Behavioral Segmentation

This is a key segmentation area in marketing. It categorizes and classifies customers according to the behavior that they display while interacting with your brand, products and services. When groups of customers display similar traits and behaviors, they can form a stable and quantifiable segment.

Behavioral segmentation is based on the readiness, frequency and consistency of purchasing your products/services, loyalty to your brand and the benefits they seek from such interactions.  Marketers look at data that gives information on the customer’s behavior on your website and their journey. Their browsing history, purchasing history, feedback and reviews, social media recommendations and comments, the devices they use to browse your site, their expectations, and the pain points along the journey.

This data can be integrated with demographic data to provide a “persona” of a typical customer that companies can observe, gauge and serve better. You can develop more key insights into attitudes and motivation, and send the right message to the right customer at the right time. It keeps your loyal customers happy and gives new customers a feeling of being recognized and wanted.

Customers may display different types of behavior such as complex, variety seeking, habitual or they may seek to reduce dissonances. They may purchase regularly, occasionally, or based on certain life events.

This results in better personalization. Statistics show that companies that companies can achieve 200% higher conversion when they provide campaigns that are adjusted to sync personally with customers.

Benefits of Behavioral Segmentation

Describes and Maps Customers: Behavioral segmentation makes it easier to connect with individual customers, rather than groups of them. They become more accessible, and you can understand them in terms of culture, language and location. You can identify them, and address their unique needs. You can also identify them according to the search terms they use. This helps you to put more of the right keywords into your content. 

Reduces marketing effort: Today it’s a race to stay ahead of the competition. Globalization and the internet have leveled the playing field completely. A tiny mom-n-pop business can compete with an international corporation, and a start-up in a remote village can challenge companies located in the major cities of the world. Behavioral segmentation addresses the customer directly, creating a more democratic view, based simply on what they do. This means there’s little chance of confusion and more chances of achieving the target.

Prioritization: Behaviors provide clues about many other aspects. This makes it easier for marketers to segment customers according to high or low value customer. You get more opportunities to cross-sell and up-sell to higher value customers, rather than putting resources, time and effort into those that only purchase occasionally.

Prediction and planning: A stable marker like behavior can be used to plan new launches, products and services. This is because you can more or less safely make reliable predictions that help you to monitor performance and profitability. Fine-tuning helps to beat the competition on every front.

Personalization: Most customers today prefer to engage with brands that prioritize personalization. More than 80% of customers purchase products/services from brands that offer personalized experiences. They prefer to engage with companies that offer relevant and personalized messages. They get frustrated with irrelevant and general messaging. It also reduces the costs of acquisition, increases revenues and spend efficiency.

Provide Benefits: Customers arrive at your website in response to a “problem” – they want to know what’s new, give a gift, they need a particular service or product, or they want to understand why their social circle is buzzing with news about your company. Providing solutions to such issues is the first and biggest benefit that your company can give them.  Additionally, there’s no customer who doesn’t love offers, discounts, deals, deferred payment options and the right sort of freebies. Based on where they are in the journey, you can offer discounts, loyalty benefits, coupons or gifts. Free delivery, reminders of special occasions, offers based on their preferred social media, products/services based on time, day of the week, or what they’re doing at the moment are great ways to reward your loyal clients.

Behavioral segmentation is the ultimate pot of gold at the end of the marketing rainbow. While it takes time, insights and sorting through volumes of data, it is worth it in the end. No company has limitless time, energy or resources to spend on marketing. Behavioral segmentation makes these efforts leaner, more accurate and more rewarding.

He is a Blogger, Tech Geek, SEO Expert, and Designer. Loves to buy books online, read and write about Technology, Gadgets and Gaming. you can connect with him on Facebook | Linkedin | mail:


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