Behavioral segmentation is one of four main types of market segmentation. Unfortunately, it’s frequently overlooked as a way to effectively segment and reach qualified audiences. Demographic, geographic, and psychographic segmentation are often the go-to methods for marketers, but behavioral segmentation should never be ignored.
The rest of this post will explain the benefits of this type of targeting in marketing, covering:
- What behavioral segmentation is
- Why it’s so useful to marketers
- Six types of behavioral segmentation
- How to use behavioral segmentation to boost marketing effectiveness
What is Behavioral Segmentation?
Behavioral segmentation is one type of market segmentation that groups audiences, prospects, and customers by their actions and behaviors. Where demographic and psychographic segmentation look at who customers are, behavioral segmentation looks at what customers do.
Why is Behavioral Segmentation Useful?
Companies that use behavioral segmentation can improve their marketing effectiveness by using the insights to create personalized experiences for audiences based on their needs, preferences, and stage of the buying process.
Behavioral segmentation allows you to:
- Understand the attitudes, likes, and dislikes of prospects and customers.
- Identify customers who are most likely to buy.
- See what and when customers are most likely to buy.
- Create more targeted content, messaging, and marketing campaigns.
- Monitor changes and growth patterns to develop predictive marketing plans.
- Identify purchasing trends and uncover niche marketing
When brands understand patterns in customer activity, they can better meet customer needs and wants, identify top marketing opportunities, and develop better solutions for customers.
6 Types of Behavioral Segmentation
People often think there are just four types of behavioral segmentation. But there are actually six useful types of behavioral segmentation most marketers can benefit from using.
- Purchasing Habits
- Customer Journey Stage
- Benefits Sought
- User Status
- Brand Interactions
- Spending Habits
1. Purchasing Habits
Purchasing habits refer to how customers approach the buying process. While there are many ways to classify purchasing habits (such as price-conscious or risk-averse buying), Henry Assael, professor of marketing at NYU, describes four primary types of buying behavior:
- Complex: When a customer is engaged with the purchasing process but doesn’t know what brand or offering to choose. The customer is researching and shopping to try to find the best option. In short, they are actively shopping and searching for the best option.
- Variety Seeking: When a customer is happy with their brand but interested in trying other options. The customer doesn’t need to try another brand, but they enjoy exploring other offerings. In short, they are satisfied with their purchase but are open to other options.
- Dissonance Reducing: When a customer is happy with their brand, but they know other options could be better. They are conflicted about leaving their brand and trying something new. In short, they are satisfied with their purchase and, despite some anxiety about making a change, think there is something better out there.
- Habitual: When a customer is already familiar and happy with the brand. They will continue to go back to the brand without much thought. In short, they are loyal to their brand and aren’t considering other options.
2. Customer Journey Stage
Customer journey stage refers to where a customer is in the purchase funnel and what they are doing in that phase. This type of behavioral segmentation is useful as part of a larger customer lifecycle marketing strategy, which customizes offers and messaging based on phases of the buyer journey.
- Awareness: The customer is noticing that they have a problem or need.
- Engagement: The customer is researching potential solutions and products that can help them.
- Evaluation: The customer knows what solution or product they want, and they are considering what brand or option is best.
- Purchase: The customer knows exactly what they want, and they are ready to buy.
- Post-Purchase: The customer has made a purchase and needs follow-up support or a reason to return back to the sales cycle.
3. Benefits Sought
Benefits sought refers to customers choosing products and services based on the features and solutions that matter to them most. You can see what benefits are important to customers by looking at what types of products and services they choose.
For example, if customers consistently choose a low-cost option of an offering, you might conclude that price matters most to them. If customers are engaged with a webinar about how a product can save them time but are not interested in a webinar about how the same product can help them improve performance, you could reason that saving time and workflow efficiency are most important to them.
4. User Status (Engagement)
User status refers to the amount of time a customer spends with a product and/or how often they use it. You can generally categorize customers by their engagement as:
- Heavy Users: Customers who spend the most time with your offering and/or use it regularly. They are the people who are most loyal to your brand and most likely to make purchases from your brand again.
- Medium Users: Customers who intermittently use your products or services. They turn to it occasionally but don’t use it regularly.
- Light Users: Customers who rarely use your products or services. They may be special-occasion customers, one-time users, or variety-seeking customers likely to jump between brands.
5. Brand Interactions
Brand interactions refer to how customers engage with your brand. This type of behavioral segmentation tracks interactions both online and off, and includes activities that demonstrate how interested a customer is in your brand. They may include:
- How often a customer visits your store
- How often a customer makes a purchase
- What customers have bought in the past
- How often a customer visits your website
- What pages a customer visits on your website
- What webinar they viewed or content they downloaded
- How often a customer engages with your social profiles
- What content a customer engages with on your social profiles
6. Spending Habits
Spending habits refer to the circumstances under which customers like to buy. It offers insight into how customers spend their money and where and when they typically buy. Spending habits may segment customers into groups of people who:
- Buy online vs. in-person
- Always use coupons vs. rarely use coupons
- Use a store credit card vs. don’t have a store credit card
- Visit during sales vs. random times
Use Behavioral Segmentation to Boost Marketing Effectiveness
Now that you know how to segment your audience based on their behavior, let’s look at how you can find and apply these insights to your own marketing plans.
1. Research your audience
Perform an audience analysis to get to know prospects and customers. Conduct interviews and surveys, dig into your business data, and research audience interests to identify trends in customer behavior.
Pro Tip: Use Alexa’s Audience Overlap and Audience Interest tools to gather information about the sites and topics that matter most to your customers.
Learn more about your market and audience by asking the right questions. Use these 29 market research questions to guide your marketing strategy.
2. Create buyer personas
A buyer persona is a detailed description of a customer, including their goals, pain points, demographic information, and more. Use what you learn in your audience analysis to create three to five buyer personas that describe your typical customers and/or prospects you want to attract.
Pro Tip: Download Alexa’s buyer persona template to create informational profiles of your target customers.
Need inspiration for creating your first buyer persona? Use these buyer persona examples to get you started.
3. Map out the buyer’s journey
Once you know who your customers are, map out the journey they take on their way to doing business with you.
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Create a customer journey map for each buyer persona that shows what the customer is doing during each phase of the purchase funnel.
Pro Tip: Download our customer journey mapping template to outline the steps of the buyer’s journey.
Once you’ve completed your customer journey map, consider doing a content mapping exercise to illustrate how each piece of your content connects to a stage of the customer’s journey. Use the insights to create a more tailored content marketing plan that helps nurture customers every step of the way.
4. Develop behavioral marketing campaigns
Use your buyer personas and customer journey map to identify themes in customer activities and behavior. Use different types of behavioral segmentation to group audiences into categories that present marketing opportunities.
- Segment customers by purchasing habits and create different marketing campaigns to target habitual buyers (where the sales process is fast) and complex buyers (where the sales process is slow and will require more information and guidance for shoppers).
- Look at the actions a customer takes during the buyer’s journey, and use content mapping to create content that helps customers with what they are doing at each step of the process.
- Identify and target the customers most likely to respond to your marketing messages by focusing on the customers who have the highest level of engagement with your brand.
- Develop new marketing materials that focus on the benefits that matter most to your current and prospective customers.
Pro Tip: In addition to the tools covered in this post, there are other tools that can help you track and segment your audience by behavior. Consider a tool like Mixpanel to track interactions on a website or in a product, or Vero to understand email engagement and to set up behavioral email marketing campaigns.
Boost Your Marketing Effectiveness with Behavioral Segmentation
Don’t just focus on who your customers are. Pay attention to how they act.
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When you know what your customers are doing (or not doing), you can boost marketing effectiveness by creating personalized marketing strategies that target audiences by what they really want and need. To access tools that can help you conduct an in-depth target audience analysis and craft a behavioral segmentation plan, sign up for a free trial of Alexa’s Advanced plan.