As a business owner, you need to be on top of all the information you can get about your target audience. With the benefit of technology, it’s possible to target even an individual customer out of thousands, based on certain observations, analyses, and information you have on them.
While marketing studies have evolved by leaps and bounds, keeping pace with technological advances, some essential elements remain at the foundation of all marketing strategies.
Segmentation is a vital concept that lies at the heart of effective marketing strategy and behavioral segmentation is a crucial aspect of it.
What Is Market Segmentation?
Whether you sell a product or a service, it’s crucial that you identify the customer who needs it. Without it, your business would fail to grow, expand, or even survive.
In the pre-Industrial Revolution era, the market consisted of regional businesses that catered to local requirements. When transportation systems improved in the 19th century, mass transit of goods and services became a reality. Standardization became essential when selling to larger audiences.
With the expansion of the market, business owners realized that their customers could be divided into different segments based on location, age, gender, lifestyle, socioeconomic status, etc. As a result, they began to tailor their products and tweak them to match different segments. For instance, automobile manufacturers could introduce different models to target different customer profiles.
The technology entered the fray in the mid-1980s and made it possible to fragment the market even more finely. Marketers could identify and target audiences through the information gathered via data analytics. Today, digital communication is the channel through which marketers can connect with an individual customer/client, serve them better, build brand loyalty, predict future behavior and ensure that they share their experiences within their circle of influence.
Additionally, it’s important to know who your customers are and where they’re located.
Archaeological evidence reveals that our Bronze Age ancestors devised trade routes based on geographical markers.
In medieval England, shopkeepers invited privileged customers into the backrooms of the shop, while serving itinerants via a window in the wall.
This is a strategy that identifies your customers based on their behavior on your website. This makes it one of the cornerstones of the e-Commerce business. It goes further than traditional segmentation that’s based on age, gender, location, lifestyle, income, etc.
The customer’s purchasing journey is very important in behavioral segmentation. It can be analyzed according to the AIDA model, where Attention, Interest, Desire, and Action are the main elements. In e-Commerce, you also need to factor in Adoption and Advocacy as other important behaviors.
It answers certain vital questions that a marketer would love to ask the customer personally:
- How did they get to the website?
- Have they visited before?
- Why are they here?
- What are they looking for?
- How many times have they come to your website before making a purchase?
- What would attract them to making a higher value purchase?
The variables that are at play here would include purchase occasion, the status of the user (whether regular, occasional, non-user), and the benefits they seek.
There are different types of behavioral segmentation that can help to create a more integrated, holistic customer profile or persona. This data is available at all stages of your customer’s journey right from the moment they enter your website to when they leave it. At every stage, you can install certain actionable features that enhance your marketing strategy. These features enhance the journey, their engagement, and their ultimate satisfaction.
These behaviors include:
- Occasion/timing of the purchase
- Behavior before/during/after purchase
- What benefits do they seek
- Loyalty to brand
You can group your customers according to their feedback, what qualities they value in the product/service, how it benefits them, feedback on actual use, what makes the product unique, any other benefits they get from purchasing/using it.
How Data Is Collected
Marketers can create user profiles based on information gleaned from behavioral segmentation data.
This would include website analytics, cookies on the site, browsing/search/purchase history, data from social media, log-in details, IP address, etc.
For this, your website would require to have elements such as CRM (customer relationship management) software, conversion rate optimization tools, marketing automation, etc. that will help to send personalized messages to the individual customer rather than a one-size-fits-all message.
Benefits Of Behavioral Segmentation
Implementing a behavioral segmentation marketing strategy has several crucial benefits for the health, growth, and survival of your business.
Instead of sending a broad-based message that would be ignored or trashed immediately to your entire customer base, behavioral segmentation allows you to send specifically targeted messages that are relevant and important to that particular customer.
When you’ve identified target customers based on observed behavior, you can evaluate the kind of services/products they really need. This allows you to provide bespoke services tailored to their unique needs, preferences, and budget.
Separates users correctly:
Behaviors reveal whether a user is uninterested, slightly or likely to be interested, engaged, or well-established. You can separate loyal customers from new arrivals on your site and helps to create more accurate user personae.
With a leaner, tighter, and more streamlined marketing strategy, you can save time, resources, and money. Behavioral segmentation helps to communicate with the right audience and connect only with genuinely interested customers instead of wasting valuable resources on cold calls.
With the enormous amount of data that comes in from your site, you can accurately measure the metrics within every behavioral segment. This helps you to correctly gauge the success of your marketing campaigns.
New technologies such as responsive design help to react accurately to customer needs and to address pain points. It’s only logical that customers who feel valued would in turn develop a strong loyalty to your brand.
If you have enough data about how customers’ behavior and interact with your business, it helps you to develop the right products that will appeal to them. You can widen your consumer base with information from behavioral segmentation so that your product line is in sync with their aspirations and shopping behaviors.
One of the greatest benefits of behavioral segmentation is the fact that you can use data to predict future behaviors of these customers, based on their present patterns of shopping, browsing, etc. This helps you design future marketing strategies, product launches, etc.
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