Behavioural segmentation: Definition, types & examples
When you’re trying to resonate with hundreds of thousands of people with varying needs and preferences, marketing segmentation is a must. This allows you to deliver messages and experiences that are highly relevant to different types of customers. Yet if you’re only limiting yourself to the basics such as demographic and geographical segmentation, your efforts will also have limitations.
While it’s important to know the age, gender, and location of your customers, these alone aren’t enough. You also need to find out what they do and how they behave to paint a clearer picture. That’s where behavioural segmentation comes in, allowing you to create even more relevant customer experiences beyond demographic and geographical data.
Read on as we take a deep dive into behavioural segmentation definition, importance, and examples.
What is behavioural segmentation?
As the name suggests, behavioural segmentation refers to the process of segmenting audiences based on their behaviours and habits. This isn’t just limited to their buying habits but also includes what they do online – Which social media platforms do they use? When are they most active? Which news sources/publications do they follow?
This gives you a better idea of the unique needs and preferences of different audience groups. So you can use it to form a smarter marketing strategy that isn’t just one-dimensional. Keep in mind that behavioural segmentation shouldn’t be used on its own. Rather, it should supplement and add more substance and context to other types of segmentation.
Why do you need behavioural segmentation?
When you divide your market into several smaller segments based on common behavioural characteristics, it becomes easier to create targeted campaigns that will resonate with different types of people. The top benefits of behavioural segmentation include:
- Better personalisation – It allows you to target different audience segments with offers that are personalised according to their purchase habits. And you can also decide on the best channels and timings to deliver those offers.
- Effective prioritisation – It helps you identify your most valuable prospects so you can focus your time and resources to target, nurture, and convert them.
- Behavioural prediction – You can also predict how certain segments might behave based on historical behavioural patterns. This helps you prepare ahead of time and look for ways to influence the outcome.
5 powerful behavioural segmentation examples
There are different types of behavioural segmentation that you could implement. Here’s a detailed look at each and some real-life examples:
1. Stage in the Buyer Journey
This involves segmenting your audience based on where they currently are in the buyer journey – awareness, consideration, decision, or retention. This will allow you to personalise your messaging, offers, and experiences to boost conversions at every stage.
For example, Grammarly sent out offers to existing free users, encouraging them to upgrade to a paid, premium plan. This email won’t be sent to existing premium users. Rather, it’s only targeted to free users who are still in the “consideration” stage for Grammarly Premium.
Buyer journey stage segmentation is a little tricky as a single interaction or behaviour isn’t enough to tell you where someone currently is in the funnel. Someone who’s already far along the conversion funnel may sometimes go back to an awareness-stage blog post to get a quick refresher, for example.
So for a more accurate reading, you’ll need to combine all the behavioural data from across multiple channels and touchpoints. This will give you a more comprehensive picture of where someone might be in the buyer journey and can be particularly useful for B2B behavioural segmentation.
2. Buying habits
Buying habit segmentation involves segmenting customers based on the different ways in which they act throughout the buying process.
You could create different segments based on the unique factors that influence their purchase decisions, such as:
- People who look at brand name when buying products
- People most likely to be influenced by online advertising
- People who look at a product’s utility to make purchase decisions
- People who look to social media for purchase inspiration
- People who are likely to be influenced by recommendations from friends and family
Audiense Insights, for instance, comes with a “Purchase Influence Factors” feature that gives you a detailed breakdown of what influences the buying behaviour of certain audience segments.
You could also use this type of behavioural segmentation to further break down your audience based on how they typically shop. How many of them are prone to make impulse purchases? Are they more likely to prefer using credit cards to shop? How many of them are likely to be influenced by targeted advertising?
This gives you the insights you need to deliver experiences and create campaigns that will get each segment to convert. For example, email notifications about “Deals of the Day” could be enticing for impulse buyers. On the other hand, informative and educational newsletters may be a better option to target people who look at product utility before buying something.
One great example is how H&M runs ongoing Instagram ad campaigns, targeting existing customers who have often interacted with their ads in the past. Here, the segmentation is based on customers who are most likely to be influenced by Instagram advertising.
3. Service/product usage
Segmentation based on service/product usage is pretty much self-explanatory. It involves segmenting your audience into different groups based on how they’re using your product/service. So it looks at factors like frequency of use, duration of use, favourite features, and use stage (new users vs. seasoned users).
This is a great way to identify the reasons that might compel people to become heavy users and why some remain light users. That way, you can test different methods of marketing and nurturing to turn light users into avid users and to keep your heavy users from leaving.
For example, WordPress does a great job of welcoming new users and easing them into the experience. They send educational emails about how new users can customise their site and get more out of it. Through these emails, they also seamlessly talk about how new users should upgrade their plan to access more features.
4. Customer loyalty
This involves separating your most loyal customers from habitual customers. Segmentation based on customer loyalty is crucial because it costs five times less to retain existing customers than to acquire new ones.
And it makes sense to know which of your customers contribute to the bulk of your revenue. That way, you can focus on how to keep them happy and maximise their value. And you could also narrow down on the key factors that might influence their loyalty. This will help you find more customers like them and implement smart strategies to nurture their loyalty.
Take a look at the highly personalised “Thank You” email that DAVIDsTEA sent to its VIP customers, for example. The email celebrates the company’s 10th anniversary and takes each VIP customer down memory lane. It details when and where they first bought something from the company, their favourite products, and how much tea they’ve bought.
This is an excellent example of how to segment your most loyal customers and keep delighting them so they don’t leave.
5. Benefits sought
This involves segmenting your audience based on the unique value they look for in a product/service. You should be able to narrow down on this based on the features, benefits, and pain points that are most relevant to each segment.
For example, certain groups of customers may need skincare products to solve unique problems:
There may also be a group that want organic ingredients and another that looks at price. That means even if two people belong to the same demographic group, they may be looking for completely different benefits when buying a product.
When you separate your audience based on multiple benefits sought segments, you can develop messaging and offers that will be most relevant to each group. So for instance, you can display ads about vegan skincare to Instagram users who follow a lot of vegan-related accounts.
Domestika is an online learning platform that offers courses across different categories – from creative pursuits to marketing and business. But based on the courses you’ve bought in the past, they will send email updates about the latest offers you might be interested in. So if you’ve signed up for an illustration course before, you’ll get email recommendations for the best illustration courses to buy next.
Getting started with behavioural segmentation
When implemented properly, behavioural segmentation offers a multitude of benefits – from nurturing customer loyalty to personalising customer experiences. But you’ll need a strong combination of the right tools to get detailed insights into how your customers and prospects are behaving online.
For this, look no further than Audiense Insights. Using this platform, you can uncover a comprehensive breakdown of behavioural data including – buying mindset, online habits, media affinity, and more. Sign up for a free demo to get started.