Why is Behavioral Segmentation Important For Marketers?

As a marketing professional, you understand that your website is a powerful addition to your marketing strategy toolbox.

The question is, are you using it to its fullest potential?

Websites have come a long way from being whimsical novelties that weren’t expected to do much more than a substitute for a brochure that you’d hand out to visitors at a trade fair.
Today, your online presence holds much more weight than most other promotional materials. Almost all your marketing efforts get channeled back into your website and that includes conventional advertising, email marketing and social media marketing.

Without a website, modern strategies such as content marketing, SEO and PPC would be rendered null and void. Leveraging the power of the website can be achieved through crucial concepts such as market segmentation, and behavioral segmentation in particular.

Market Segmentation

In the dim past of marketing history, the “market” was perceived to be an amorphous monolithic entity, and all marketing efforts were focused on pushing a product through, regardless of needs, preferences, etc. Some products, such as automobiles underwent a few modifications and tweaks to sync with certain differences that were noticed in different locations, age and income groups. As marketers gained access to more data and they examined the market more closely, the differences began to manifest.

Demographic, geographic, firmographic, psychographic and behavioral segments were identified. Of these, one of the most effective and profitable types of segmentation is behavioral segmentation.

Behavioral Segmentation: A Brief Overview

One of the most dynamic and forceful weapons in your armory is behavioral segmentation. Gone are the days when websites depended on attractive, eyeball grabbing banners to capture attention. Over the past five years or less, audiences have developed “banner blindness”, most people tend to tune out when TV ads are beamed and nearly everyone marks mass emails as spam without reading beyond the subject line.

The name of the game today is “personalization.”

As a well-known marketing expert puts it, knowing your customer is a great idea, but knowing how they behave can put you streets ahead of your competition. This is achievable through behavioral segmentation.
Observing and analyzing customer behavior as they funnel through the purchasing journey provides a rich vein of insights.

Their actions as they make or avoid purchasing decisions, follow through with the final check-out or abandon their shopping carts at the last moment, circle back to view products/services, the time of day, occasions and reasons for purchasing, their loyalty to your brand, opinions and feedback, how interested and engaged they are with the brand, etc. provide vital clues that marketers would otherwise have had to spend sleepless nights trying to crack.

Behavioral segmentation is about:

• User status: whether new, occasional, frequent, regular, repeat, etc.
• Interest and Usage: level of engagement and level of usage
• Occasion: whether event or occasion-based purchasing
• Customer value management: Assessing if customers are more likely to buy based on if they feel valued by the seller
• Loyalty and Brand Awareness: assessing the level of loyalty and attachment to the brand
• Customer Satisfaction: can be measured through feedback, surveys, call-center, support portals, etc.
• Journey-Stage: Customer journeys can be mapped based on their behavior at every point, across all channels
• Benefits: What benefits are sought by the customer can give clues about their preferences, needs, budget etc.

Behavioral segmentation helps to answer some very important questions such as:

• What are the content formats that appeal most to your audience?
• What kind of interest and engagement do they respond with to content presented on your website?
• What types of content encourage conversion?

The answers to these questions can determine what can you do with the data that you receive in copious amount from your website analytics.

Why Is Behavioral Segmentation Important To Marketers?

Marketers have always wrestled with the problem of how to differentiate Customer A from Customer B. With behavioral segmentation data, you can now segment the market according to how, when and where people shop, their reaction to your brand and response to your marketing strategy, and whether they want/need the product or service.

The benefits include:

Personalization

Studies show that more than 70% of customers report that they would have selected a product/service/brand, recommended it, purchased and paid more for it if it provides a personalized UX. This means customers can avoid getting irrelevant, unnecessary marketing messages and instead, be made to feel special and unique.

Habits and Behaviors

Finding your customers where they are and enabling them to connect with you is possible through behavioral segmentation. Studies show that 88% of customers begin with an online search and 86% want to immediately see the products and services they were looking for. 64% of customers need to have the contact information as quickly as possible while 39% of visitors will stop engaging with websites that take too long to load or seems unattractive and complex. With behavioral segmentation data, you can address these issues and fix them.

Analytics

Behavioral segmentation analytics can be compiled from a variety of sources such as cookies, IP addresses, social media, demographic and geographic data etc. Marketers can use this information to create user persona that is authentic, stable and reliable.

Priorities and Efficient Resource Allocation

Marketers can separate high-value prospects, occasion and event based purchasers, low-value visitors, new users, loyal users, etc. so that they can prioritize the allocation of time, money and resources appropriately.

Monitoring

As more data becomes available, marketers may find the need to tweak the segmentation so that it reflects the reality more accurately. They can also monitor the patterns of scale and change in the segments, so that these can be aligned more closely with business goals.

Benefits

Personalization also helps to understand what works for the customer or visitor and what benefits they hope to receive from certain behaviors. Though other companies may offer the same products/services as yours, once you glean an insight into how you can benefit your customer, you gain their trust and loyalty.

Prediction

Finally, the most important aspect of behavioral segmentation is that it gives a peek into how prospects are likely to behave in given situations, based on historical data. This helps to predict, and perhaps, try to influence, certain aspects of behavior so that your company can benefit more.