Companies must segment customers if they want to see results from marketing. Surprisingly, not enough businesses use any kind of market segmentation. Though, if they did, converting prospects to customers, and customers into brand loyalists, would be much easier.
Using behavioral segmentation gives companies the edge to effectively market a product to select consumers based on their needs and desires. Rather than showcasing a product to a vast majority and hoping for the best, they can tailor their offerings to a select group.
Here’s what you need to know about behavioral segmentation, including the definition and examples of it.
What is behavioral segmentation?
Behavioral segmentation is the process of segmenting consumers based on their relationship and feelings towards a company. Businesses need to know how consumers react to products, promotions, and brands. Because how they react — based on dislikes, attitude, and previous knowledge of the brand — impacts sales. The better you segment your consumers, the higher probability of success when marketing to them.
Why do businesses use behavioral segmentation?
As I said, companies can finetune offerings when they understand how and why consumers react to promotions and the brand. It’s much easier to convert prospects into customers when the product is tailored to a specific person. Or in the case of behavioral segmentation, a specific group of people.
Customers sit at different places in the buyer’s journey. Some are only now discovering the brand while others have been loyal for years. How to market and sell to these groups is vastly different. Opportunities appear when companies take advantage of behavioral segmentation.
How is behavioral segmentation used in business and marketing?
It’s far easier to market to consumers segmented into smaller sections based on common variables. A giant campaign targeting loads of different people will only nab the attention of a small percentage. But a smaller campaigned, hyperfocused on the needs of one segment’s behavior, has a higher chance of success. Creating a tailored campaign like this also allows businesses to smartly allocate resources.
Think of it this way: If you need a specialized motor for your new robot, you’re only interested in that one motor. You wouldn’t care if a store is offering a deal on ten other types unless the specialized motor is included. Since it isn’t, that deal means nothing to you, so you ignore it.
Consumers want a specific product to fit their needs and desires at that time. If you stumbled upon a specific campaign, offering a specialized motor that ticks off every one of your needs, you’ll pay attention. It’s found you at the right time, at the right place, and in the right frame of mind.
Behavioral segmentation gives businesses several advantages
It enables them to personalize advertisements, campaigns, and services. Once you know when to offer a product and how, the company can effectively reach consumers at various stages in the buyer’s journey.
Corporations can also predict two things: When to market to a select group, and what the outcome will be (approximately). The guesswork is removed from marketing, which reduces mistakes, unexpected expenses, and costs.
And it allows businesses to focus on prospects who offer the highest value. These type of prospects may:
- Provide the best investment into the company.
- Be the easiest to convert into a customer.
- Have the biggest and best impact on the business.
Focusing on these targets, rather than consumers who aren’t as committed or valuable, allows firms to intuitively use resources and time most effectively.
4 major examples of behavioral segmentation
There are several types of behavioral segmentation examples, but these four are of the utmost importance for companies.
1. How consumers buy
This is known as “purchasing behavior”. Companies can respond properly to the decision-making process when customers understand how and when customers buy products. This involves understanding how customers approach buying, how they feel about products, and their role in the buying process.
2. Sought after benefits
What benefits are most important to customers? Too often, companies try to show-off every last benefit of the product or service. While this could entice a greater audience, it may also backfire. Most customers are looking for specific benefits to solve a problem.
For instance, if someone is going to be standing for hours, they’ll be on the lookout for new shoes. What do they value over anything else? Comfort and sturdiness. Will their feet be aching after standing for six hours? Will the shoes last a few months or only a few weeks?
This type of customer may not value how the shoe looks over these other benefits. They won’t care if it’s a great running shoe because they won’t be running. They won’t care if Beyonce wore it, unless Beyonce was standing for hours.
This means that certain benefits outweigh others. How do companies find out? By segmenting customers based on their needs.
3. Consumer usage
How customers use a product can define the customers’ loyalty. For instance, a customer who uses the product often may be more loyal to the brand. However, a customer who only uses it sparingly could mean they’re not as devoted to the product. Or it could mean there’s a flaw in the product.
If the customer only uses certain features, these features are likely more important to the user. The brand can take this information to adjust the product or shift the focus in marketing campaigns.
4. Customer loyalty
Customer behavior is also affected by how comfortable they are with a brand. Loyal customers buy the product and service often; they need little convincing. Think of iPhone users; many run to the nearest store to buy the newest version. No questions asked.
Marketing to a loyal customer is vastly different than marketing to a new customer. The new customer still needs convincing that the product is worth the investment. They need to see the benefits and feel their needs are met. But a loyal customer has already been through all of this. It’s a waste to push this effort onto them. Instead, brands have to decide what to offer to keep this loyalty.
Behavioral segmentation: Bottom line
Behavioral segmentation helps companies tailor marketing campaigns to select individuals rather than large groups. By doing so, the chances of converting prospects into buyers are higher. It also means companies can save on resources and time. Surprisingly, despite these valuable benefits, most businesses aren’t using behavioral segmentation. Although it takes more research, the payoff for understanding the way customers buy and use a product will far outweigh the investment.
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