Behavioral segmentation is important because it gives the company the following benefits.
Identifying the most engaged users – Some customers are more engaged with a company than other customers. They read emails from the company and spend time browsing the products of the company. Focusing on these highly engaged customers enables companies to make more sales.
Accurate messaging – If a company knows the buying patterns and preferences of its customers, then it can personalize its marketing messaging to appeal to each of these customers.
Providing personalized experiences – Companies can recommend customers complementary goods based on the behavior patterns that it has noticed from these customers.
Building customer loyalty – When customers think their demands and needs are being understood by a company, they are inclined to get more attached to that company. This builds customer loyalty in the long run.
Types of Behavioural Segmentation
Behavioral segmentation allows companies to divide their consumers into the various types of behaviors which they exhibit. Following are the four types of behavioral segmentations:
Purchase and usage behavior: Every customer purchases and uses services according to their needs. Thus, it becomes very crucial for companies to identify these purchase and usage behaviors. Identifying these behaviors enables companies to target these customers better to increase their sales.
Occasion purchasing: Plenty of customers are more active during certain occasions like Christmas, Valentine’s Day, New Year, etc. Some customers are also more active during a certain part of the day—for example, a worker buying a cup of coffee every morning before he leaves for the office. Companies can use this information to market to the customers just before when they are supposed to be active. Companies can also give these customers some special discounts or offers during the periods when they are inactive to engage them.
Benefits sought: Different customers are looking for different benefits from the purchase of a product. For example, while buying headphones, some customers look for the best sound while other customers look for beautifully designed headphones. Knowing what benefits customers and what they are looking for can help companies market their products better to the customers. Promoting the most in-demand features of the product will attract more customers.
Customer loyalty: Customers that are loyal to a company must be rewarded for that loyalty through special offers and sales. Retaining and rewarding loyal customers is the cheapest way to increase sales.
Behavioral Segmentation Strategies
The behavioral segmentation strategies include the following:-
Learning how customers acted in the past is important to predict their future behavior. Youtube uses this strategy to recommend similar videos to users with similar watch history. Not only the video recommendations are similar but also the advertisements as well.
In online markets, companies have data regarding the devices of the customers. Using this data, they can customize the experiences of their users. For example, customers on iPhones and Macs are considered more affluent since these devices are expensive than PC and Android smartphones. Hence these customers are recommended more expensive products on the website.
Suggesting complementary products to customers based on their recent order history is another strategy for how e-commerce websites like Amazon increase their sales. Amazon says that its product recommendations are responsible for over
35
%
35% of total sales.
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