What Are Four Types of Behavioural Segmentation & How Do They Work?
Sending uniform messages to all of your customers is outdated. If you want customers to react to your marketing campaigns, you need to make them targeted and personalised.
This is where behavioural segmentation comes in.
Segmentation is nothing new to marketers. However, marketing segmentation traditionally involved simple things like demographics and geographical location. Now – with behavioural segmentation – marketers can divide customers into groups based on the way they behave too.
Let’s find out more.
What is Behavioural Segmentation?
BehaviouralBehavioral segmentation is a tool used by marketers to divide customers into groups. Each group has specific behavioural patterns, which make it easier to send targeted marketing materials to them.
Here’s an example of how it might work if you were selling health supplements. One group of customers buy cod liver oil tablets because they’re good for eye health. Another group buys them because they’re the cheapest on the market. These customers can be divided and marketed separately, with the focus put on what matters to each of them.
The main examples of behavioural segmentation include usage and purchase behaviour, time-based and occasion, benefit-driven, and customer loyalty. This guide will take an in-depth look at each of these behavioural segments and how they work. Plus, you’ll learn about the benefits of using behavioural segmentation in your marketing campaigns.
The Four Types of Behavioural Segmentation
This section will look at the four main types of behavioural segmentation. You’ll be able to divide most of your customers into these groups.
1. Usage and Purchase Behaviour
Usage and purchase behaviour relates to how customers use a product and how they behave during the decision-making process. This is one of the most important types of behavioural segmentation because it allows businesses to improve the purchasing process.
There are four main categories of purchasing behaviour:
- Complex. This is when a purchasing decision is complex and the customer considers a lot of different factors. For example, if a customer is buying a new laptop, there are several things they’ll think about, such as RAM, screen resolution, brand, storage, etc.
- Habitual. Every consumer makes habitual purchases. They’re normally small purchases you buy regularly. For example, some customers buy Jif Peanut Butter and would never buy Skippy Peanut Butter. There isn’t much difference between the two – they do so out of habit.
- Dissonance reducing: When a customer is making a large purchasing decision, they might look for one factor that separates two products. For example, if two cars have similar specs, they might go for the cheaper option.
- Variety seeking. Sometimes, customers will try a new product to see how it stacks up. For example, if they normally drink Nescafe instant coffee, they might try Starbucks for a change.
Understanding which category of purchasing behaviour a customer falls into can help you deliver targeted messages. For example, if a customer belongs in the complex category, you need to drive home the benefits of your product over its competitors. If they fall into the habitual category, you just need to send a gentle reminder. Identifying this should form part of your processes mapping.
2. Time-Based and Occasion
Time-based segmentation is about the timing of when a customer purchases. You can divide customers into three different groups based on when they buy:
- Promotional buyers. These are customers who make purchase decisions according to special offers and discounts. They’re a great opportunity for businesses to increase sales with limited investment by driving traffic during key times.
- Seasonal. These are customers who buy products based on the season. During the summer, they’re more likely to purchase beachwear. In the winter, they might look for sweaters and coats. For example, in America, you’ll see Christmas-related goods appearing in stores as early as October/November.
- Occasion-based. These are customers who choose to make a purchase based on an event or occasion. For example, Valentine’s Day or Mother’s Day.
Understanding this type of behavioural segmentation allows you to optimise sales at different times of the year. This keyword research guide teaches you how to get to the top of Google regardless of the season, so your product or service is easy to find when it matters.
3. Benefit Driven
Benefits are important to all customers. However, the reasons they’re important can differ greatly. Two companies might want a piece of content management software for two completely different reasons. One could wish to create a content marketing strategy for SaaS while the other wanted to build a website.
Understanding what benefits your customer is interested in will help you market your products to them.
4. Customer Loyalty
Loyal customers are like gold dust for a business. Here’s why:
- They continually buy your product or service.
- It’s cheaper to retain them than to acquire new customers.
- They have the highest lifetime value of all customers.
Understanding loyal customers is the real secret to business. It’s important to recognise why your customers stay true to you. This information can be gained from customer questionnaires. Then you can optimise these customers via loyalty schemes and other marketing campaigns.
Other Types of Behavioural Segmentation
In addition to the four main types of behavioural segmentation, there are a few other ways to divide customers.
1. Customer Lifecycle Stages
The five customer lifecycle stages are reach, acquisition, conversion, retention, and loyalty. Knowing where a customer falls on this path can help you deliver targeted messages. For example, if they’ve already bought a product from you, thank them for their purchase and encourage them to buy again with a personalised offer.
2. Customer Engagement Level
This relates to how much a customer engages with your brand. Your brand is more than just visual aspects. Even if you use the best logo maker and create an appealing brand image, there’s still some work to do to engage customers This is most useful for service-based businesses. There are three levels of user engagement:
- Occasional. A customer’s engagement with your brand is sporadic. They only connect with you when they need to and ignore marketing messages.
- Regular. A customer engages with your brand regularly but doesn’t use every product or service.
- Intensive. A customer uses your service daily and it’s important to their life and/or work. This is a good reason to provide them with special treatment.
3. Customer Satisfaction
This segment relates to customer feedback. You adjust your message based on how the customer feels about your product or service. For example, if a customer is dissatisfied, you don’t want to send them a message telling them how great your product is.
The Benefits of Behavioural Segmentation
So, what are the benefits of behavioural segmentation and why should you apply it to your business?
1. It increases your level of personalisation with your customers
Modern consumers see past generic marketing messages. In fact, they’ll often ignore them. To stand out, you need to deliver personalised messages.
That doesn’t mean you have to write to each customer individually, but it does mean you should use behavioural segmentation to make it feel like you are. Behavioural segmentation can drive personalisation in everything from email campaigns to the anchor text used in blog content.
2. It helps you predict customer behaviour
Predicting customer behaviour allows you to take an agile approach to marketing. If you know a customer is most likely to drop out of a purchase at a certain point, you can combat this with a targeted campaign. Understanding customers will help you increase conversions and profit.
3. It helps you track which customers to focus on
You can’t give all of your customers the same level of focus, even if you have a 360º customer view. That’s why it’s important to optimise your marketing and hone in on those who are most valuable to your business. For example, retaining loyal customers is cheaper than acquiring new ones. Therefore, you should focus on this behavioural segment above all others.
4. It builds brand loyalty and customer retention
Customers are most likely to be loyal to a brand that understands them. If you can make your customers feel valued, they’ll buy from you again and again. Using behavioural segmentation, you can communicate with customers in a meaningful way instead of sending them generic emails.
5. It improves customer service
The key to excellent service is understanding the customer. With behavioural segmentation, it’s possible to adjust service messages based on the type of customer. To do this effectively, adopt intelligent automation in your customer service process.
In Using Behavioural Segmentation, Keep This in Mind
Behavioural segmentation could be the key that unlocks your business’s success. However, it’s not the only tool you’ll need to employ. Along with strong competitor keyword analysis, excellent copywriting, and an agile approach to marketing, you’ll be able to increase conversions and drive brand loyalty.
Remember, behavioural segmentation provides a framework for communicating directly with your customers. However, you still need to decide what to say.