Discover what behavioral segmentation is, its importance, and how you can sort your customers into groups to better engage with them in this blog by Impact.
May 08, 2023
Behavioral segmentation in marketing refers to sorting your prospects and customers into groups depending on the shopping habits, interactions with your brand, and interests they exhibit.
For example, one of the ways footwear giant Nike sorts their customer base is by purchasing habits. They use data analytics to keep track of when certain shoppers buy shoes. They then send targeted messages to show a returning customer shoes or offers they might be interested in.
“If a customer usually buys shoes every six months and it’s been 12 months since the purchase, Nike will know to reach out and prompt that customer to resume their purchase cycle.” – Forbes on Nike’s customer segmentation strategy
Behavioral segmentation in marketing is essentially an exercise in breaking down key attributes of your customer base and marketing to each “segment” in a different way in order to appeal to them more personally.
Read the basics of behavioral segmentation and how you can use it in your business.
There are four types of behavioral segmentation: purchasing behavior, occasion purchasing, benefits sought, and loyalty. A customer may be affected by one type of by all four types, depending on how much behavioral data they offer your brand.
Learn more about the basics of behavioral segmentation with this explainer video and discover more about segmentation types below.
1. Purchasing Behavior
Segmenting your consumers into groups based on their purchasing behavior means taking a look at their shopping habits.
Their frequency and number of purchases, the types of products they buy, and their buying patterns all affect this segment. Common examples of behavioral segments based on purchasing habits are:
Regular customers: Consumers who purchase a particular product or service frequently or in large quantities.
Occasional users: This segment consists of consumers who purchase a particular product or service infrequently, perhaps on a seasonal basis.
Offer seekers: This group consists of consumers who are primarily motivated by price and seek out discounts or promotions.
Impulsive buyers: These are consumers who make purchases on a whim or without much thought, often driven by emotions or situational factors.
How does your business keep track of your customers’ behavior? Do you sort them based on their buying habits? You want to be able to understand why your customers are acting in a certain way towards your brand and then use that information to deliver more personalized experiences for them.
2. Occasion Purchasing
This market segmentation strategy divides consumers into groups based on their purchasing habits related to specific occasions or events. Occasion-based segmentation is often used by businesses to tailor their marketing efforts to specific occasions or events that are important to their customers.
For example, the department store Macy’s ran a social media-based Mother’s Day campaign inviting their audience to share pictures with their moms using the hashtag #MacysLovesMoms. Macy’s promised $3 to charity for every post added to social channels.
This campaign engaged users and promoted the Macy’s brand at a time when many shoppers would be looking to buy Mother’s Day presents. Keeping track of engagement metrics on their social channels would allow Macy’s to understand the impact of this specific campaign.
Here are some ways you can segment your customers based on their occasion purchasing habits:
Holidays and celebrations: Like the example above, this segment consists of consumers who purchase products or services related to holidays and celebrations such as Thanksgiving, Valentine’s Day, or Halloween.
Special events: This group purchases products or services related to special events such as weddings, birthdays, and graduations.
Seasonal occasions: This segment of shoppers purchase products or services related to seasonal occasions such as summer vacations, winter sports, and back-to-school.
Knowing when each segment is ready to make a purchasing decision will help you create targeted campaigns based on these events to raise awareness of your products and services.
3. Benefits Sought
Using this method, consumers are grouped based on the benefits they seek from a product or service. This can include factors such as convenience, affordability, performance, status, and innovation.
For example, the high-fashion brand Prada attracts shoppers by offering them status. Using celebrities and known influencers in their marketing campaigns, the brand promises buyers an aesthetic alignment with these personalities.
“Prada caters to the preferences of its target audience, who are willing to pay higher prices for products that convey status and prestige.”
Benefits sought segmentation can be a highly effective approach to market segmentation because it focuses on the needs and wants of consumers rather than demographic or geographic factors.
In this segmentation strategy, customers are grouped based on their past behavior, including their purchasing history and their level of engagement with your brand.
Customers who consistently use your services or products are considered loyal customers, while those who have only made occasional purchases or have never purchased from the brand are considered non-loyal customers.
Starbucks, for instance, has a loyalty program that rewards customers for purchasing using their app. An app user can collect points as they complete a Starbucks purchase and use them later on a free drink or food item.
The goal of this segmentation approach is to develop targeted marketing strategies that focus on retaining loyal customers and increasing their level of engagement with the brand or product.
Why Is Behavioral Segmentation Important?
Behavioral segmentation is important for businesses because it allows them to take a more personal approach in their marketing, and a personalized experience for customers is a huge competitive element for SMBs.
Segmenting your audience and using this data to send targeted messaging and campaigns can have a great impact on your bottom line. If you can truly understand what drives your customers and get into their shoes, you deliver them a service or product according to their needs.