Why Is Behavioral Segmentation Important For Marketers?

Why Is Behavioral Segmentation Important For Marketers?

Purchasing something online is not as simple as it seems. It consists of an elaborate set of attitudes, preferences, needs and motivating factors that are bound by budgetary limitations, age, gender, income, geographical location, social status, etc.

These result in certain identifiable behaviors that often morph into habits and set patterns.

The purchaser’s journey is of great importance to marketers. It determines every aspect of a marketing campaign, allocation of resources in terms of time, money and effort, branding, and in shaping productivity, manufacture, retail and ultimately, in the revenues and profits earned.

Market Segmentation

Marketing aims at delivering a message about products/services to a target audience. In the early days of marketing studies, the market was considered as an amorphous whole, and marketing messages were aimed at this mass in general.

As the field of marketing evolved and developed, it became clear to professionals that there were certain distinct characteristics that separated classes of people from others in this large, undifferentiated mass.

Early differentiation was based on location, gender, age, income group and other such obviously distinctions and demographic attributes.

Gradually, as more data became available, segmentation could be divided into:

  • Demographic
  • Geographic
  • Psychographic
  • Behavioral
  • Lifestage or generational
  • Value
  • Firmographic
  • Seasonal

Various experts added more such segments as better access to information became available.

The benefits of such well-classified segments meant that marketers could take better control of data available in these segments and also:

  • enhance effectiveness of marketing campaigns
  • assist in developing the right products and services
  • target other segments and widen the potential customer pools
  • establish a more sturdy brand identity
  • firm up decisions on pricing, distribution, etc.

Behavioral Segmentation

Randomized marketing campaigns are so yesterday! Today, with the humongous amounts of data that’s being churned out and available to whoever wants to access it, there’s no excuse for asking “Who is my customer?”

The real question is “What does my customer do on my website?”

This is where the importance of behavioral segmentation comes in.

It uses web user information that is gathered automatically through various sources to create a specific pattern of user behavior so that marketing campaigns become more streamlined, resource-intensive and more exclusively targeted.

Its main objective is to deliver ad messages to a section of the population that displays most interest in them.

It enables professional marketers to compile data from web searches, records of website visits, purchasing history, frequency, payment methods, etc. This information is collated to form a distinct user persona or individual profile.

It now becomes possible to understand, analyze and predict this particular persona and to link it to other similar ones, creating an integrated behavioral segment, based on their observed behaviors.

This means that as a business owner, you can directly engage the customer who will be most interested in your ad message, because it aligns with their known needs, preferences and budget and avoids sending messages that don’t appeal to them or they find irrelevant.

It also means that you can provide more personalized content through the use of basic and advanced algorithms, smart AI algorithms, and filters. These methods leverage the power of modern machine learning so that the individual UX is more interesting, exciting, valuable and memorable.

Along with this, the amazing power of social media can also be harnessed in tandem to provide a more complete and rounded portrait of your customer, along with their circle of influence.

Every customer can now see an almost completely unique version of your website, based on the data that’s gathered via behavioral segmentation.

Why Behavior Segmentation Is Important For Marketers

1. Customers want and expect personalization. They’re no longer satisfied with being a face in the crowd. Websites that offer personalization/relevant messages are preferred by 91% of customers, and 80% are more likely to purchase from such brands.

2. Behavioral segmentation helps reduce acquisition costs by nearly 50%, increases marketing expenditure efficiency by 30% and boosts revenues by 5-15%

3. It boosts brand marketing by driving higher volumes of customer engagement, and creates more enduring and deeper customer relationships.

4. Enhances re-targeting and re-marketing with the help of consumer data. Both Google and Facebook provide options for re-targeting/re-marketing strategies. This builds a robust pool of repeat and loyal customers.

5. You can use the data available to boost the number of ad click-throughs via a more personalized marketing campaign. When the customer views an ad that’s relevant and interesting and is aligned with their preferences, they would be motivated to follow this click by exploring further, seeking information, comparing similar items on the site, etc.

6. Conversion rates would logically get enhanced with behavioral segmentation-based marketing when the customer finds what they want more quickly and easily, and they would respond to the call to action much more smoothly.

7. Improved visitor experience is a direct result of behavioral segmentation. Customers who report a better UX also report better brand recognition and perception, higher lead generation, and more visitor engagement.

8. Behavioral segmentation helps marketers prioritize their efforts. With the use of data that’s available from customer behavior tracking, they can see exactly where the revenues are coming in and where they’re losing revenues. This means they can increase their strategies for cross-selling, up-selling to the segments that will provide better revenues and avoid putting time, money and resources into those that don’t.

9. Through behavioral segmentation, you can reward your loyal and long-standing customers with the kind of benefits that they will appreciate. This could be in the form of services or products, rewards, cash backs, points, free delivery, etc. and as every business owner knows, these are small details that a customer doesn’t forget.

10. The main goal of behavioral marketing is prediction. This helps you to plan your resource allocation, manufacturing or product acquisition cycles, development processes, hiring and recruitment, fine-tune your marketing department, keep communication channels updated, send reminders, etc. When you’re able to predict what customers want and need, and also when, how, where and why, you’re on track to zoom ahead of your competition.

Customer benefits

Apart from marketers, the customer also derives huge benefits from behavioral marketing techniques.

Most customers enjoy and value personalization because it makes them feel welcome, wanted and valued. It makes their purchasing journey shorter, smoother and more efficient.

This would obviously encourage them to return sooner and more often to your website, and spread the good news about it on social media platforms.