As a brand, have you ever wondered why sales always seem to spike during a certain time of the day? Or what benefits do your customers truly see in your products or services? Or which of your customers purchase from you most frequently? Behavioral segmentation is one marketing tool for helping brands answer these important questions.
In this article we will define behavioral segmentation, describe the six subcategories of behavioural segmentation, discuss why behavioral segmentation is important, and provide examples.
Behavioral segmentation examines the reasons behind consumer purchases, including when and how a consumer makes a purchasing decision. Consumers are then grouped into different categories based on their behaviors.
Understanding the behavioral segmentation of your audience will tell you why a consumer chooses one product or service over another, what influences their purchasing decisions, who is a loyal consumer of your brand, and more.
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The answers might surprise you, providing insight into the minds of your consumers that you wouldn’t have discovered otherwise. You might learn a point of purchase that surprises you, an unusual reason behind why they’re purchasing from your brand, or a specific day and time when consumers are most likely to buy from you.
Understanding behavioral segmentation on a deeper level begins by exploring its six subcategories: purchasing behavior, occasion purchasing, customer usage, benefits, loyalty gauge, and buying stage.
Let’s discuss the six subcategories of behavioral segmentation and why they’re important for marketing.
The first subcategory of behavioral segmentation, purchasing behavior examines the consumer’s thought process when purchasing a product or service. Understanding the purchasing behavior of your customers provides valuable insights into the motivations behind their purchasing decisions.
For example, what prompts the customer of a local coffee shop to purchase a coffee with a croissant every Sunday? When purchasing a carpet cleaning service for the home, what type of research is involved before making a decision? Once brands understand the reasoning behind these decisions, they’ll be able to make the purchasing process that much easier for their customers.
Occasion purchasing looks at when your customers are buying from your brand. It considers the frequency with which they’re purchasing, including regularly, sporadically, weekly, monthly, yearly, seasonally, etc. It’s important to also consider the individual life events for each of your customers, including birthdays, anniversaries, graduation days, etc.
When studying the occasion purchasing of your customer, it’s important to explore all potential purchasing patterns and their correlation to external events. For example, do your honey sales pick up during cold and flu season? Which customers purchase new running shoes every quarter, while other customers only once per year?
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Taking the time to ask these questions and truly understand the timing of your customers’ purchases will help you better predict peak seasons and trends. This enables brands to more efficiently manage their inventory.
Customer usage determines which of your customers are spending more money with you and which customers are purchasing from you more frequently. This metric measures frequency as well as dollar value of customer purchases. Learning who your loyal, big-spenders are gives you the opportunity to create special marketing campaigns just for them.
It can be helpful to further divide this subcategory into three different tiers of spending: little, medium, and big. Organizing your customers by how often they’re purchasing from you and how much they’re purchasing from you will make it easier to provide special treatment to your biggest customers.
The benefits portion of behavioral segmentation tells brands what benefits their customers receive from their products or services. The variety of benefits consumers receive from a brand are seemingly endless. They can include price, convenience, quality, status, and more.
Understanding the benefits customers see in your products and services can help you better target your marketing dollars. For example, if customers only attend your yoga classes when they are discounted, it might make sense to start offering promotions, punch cards, or coupons to draw in customers more regularly.
The loyalty gauge of behavioral segmentation identifies your most loyal customers. These are the people who frequently engage with your social media, always attend promotional events, and spread the word of your brand to family and friends. Once brands identify their most loyal customers, they can provide them with special treatment to make them feel important.
The buying stage subcategory of behavioral segmentation defines which stage in the buying process your customers are in. These categories can range from people who have never heard of your brand, to repeat customers, to former customers. Once you identify which stage your customers are in, you can tailor your marketing efforts specifically to each one.
Behavioral segmentation is a very important marketing tool for increasing the effectiveness of marketing campaigns. By segmenting a brand’s audience into specific categories, marketers are better equipped to identify roadblocks, brainstorm creative solutions, and address them.
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Thoroughly understanding each behavioral segmentation subcategory can identify high-spending customers as well as which products and services sell the most. Behavioral segmentation is important for marketing because it enables brands to be more strategic about who they’re targeting and which products they’re promoting.
Using the “benefits” subcategory, an example of behavioral segmentation would be when a wedding venue delves deeper into why their customers are booking them for their wedding day. The venue might initially look at their beautiful location as the main benefit, but after further exploration might discover that their organized, helpful, and competent staff are the true benefit.
Considering the “buying stage” subcategory, one example of behavioral segmentation and why it’s important for marketing is that when brands understand which buying stage their customers are at, they’re more effectively able to target their customers.
A customer on the email list who has never purchased a brand’s product before should be receiving promotional emails that inspire them to make a purchase. A repeat customer should be receiving promotional emails about all of the great features involved in their loyalty program.
Behavioral segmentation is the gateway for brands to understand their customers and the connection they have to their brand on a deeper level. What did you discover about your customers after implementing behavioral segmentation as one of your marketing tools?