Consumers won’t settle for anything less than personalized experiences. Research shows 80% of consumers are more likely to make a purchase with a company that offers personalized experiences.
Since personalization fuels consumer buying habits, why aren’t more companies using it? Research shows companies are sending just 30% more individualized campaigns than batch and blast messages.
To succeed, brands need to provide individualized experience, and the best way to do that is through behavioral segmentation.
What is behavioral segmentation?
Behavioral segmentation is the grouping of consumers based on behavioral patterns and creating tailored marketing messages for this specific niche. These groups can be as simple or as complex as you want.
A simple segmentation could be to group consumers by the products purchased in the last month. A more complex segmentation could be to group consumers that purchased in the last two months, with weekly app usage, who are considered loyal customers making more than 10 purchases a year.
The more filters you add to a segment, the more defined the group and the more personalized the messages can become.
What are the benefits of behavioral segmentation?
Behavioral segmentation has many benefits, but many brands are drawn to the ability to:
- Get a better understanding of customers
Segmentation forces brands to take a granular look at their audience. By doing so, brands can often identify their best customers, spot trends within a group, and get to know customers on a deeper level.
- Predict trends and make decisions accordingly
Drilling down into audience analytics can help businesses predict behaviors, which in turn, can help decision-makers make wise investments. For example, segmenting customers could reveal that a majority of loyal customers were acquired through Facebook ads. By knowing this, the brand can increase its budget for that particular advertising method.
- Tailor messages to specific groups
Customers are looking for 1:1 attention and behavioral segments are one of the best ways to accomplish that. By identifying a group of runners who need thin, layered clothing to compete in winter races, for example, gives a company a chance to suggest specific, relevant products to that niche.
How to start segmenting by behavior
Most brands are familiar with segmenting by demographics. They might break a group of consumers up by age or location, but segmenting by behavior is a little more challenging. Here’s how to start:
- Track a consumer’s movements
To segment an audience by behavior, you need the ability to track a consumer’s actions while they’re in your app. If you’re not using a customer engagement platform with top-notch tracking abilities, you need to start. Look for a platform that gives you the ability to track real-time behaviors, not just past purchases.
- Know segment possibilities
There are tons of different segments that brands can create, but you need a basic knowledge of the core groups. Here are segment examples:
- Purchasing behavior: What are customers buying?
- Timing: When are customers buying a certain product?
- Problem solved: What problem is a product solving for the customer?
- Buyer stage journey: Where is the customer in the buying journey?
- Loyalty: How often are customers buying? How much are they buying?
- App usage: How often are users launching the app?
- Make a plan
What do you want to accomplish by segmenting customers by their behavior? This will vary by brand, but like any marketing strategy, you need to set a goal and identify how you’ll measure it. For example, your goal could be to increase customer spending by 15% among loyal customers through the holiday season.
Next, figure out how you’re going to achieve it. For example, perhaps you plan is to send targeted push notifications to the group and support it with a drip campaign via email. Maybe you plan to add product suggestions into your app’s search function. You’ll likely combine several different tactics to reach your niche audience.
- Explore effective examples
Look at brands that rely heavily on behavioral segmentation to engage customers. Spotify, for example, makes music recommendations to users based on their tastes. The Nike Training Club app creates tailored workouts for each user based on their likes and activity levels. Draw on inspiration from these companies and tailor them to fit your company and product.
Finally, identify the key performance indicators that you’ll use to gauge your plan’s success. Many customer engagement platforms allow you to build segments and watch metrics tied to campaigns for that group, which makes monitoring and evaluating extremely easy.
Personalized experiences will fuel consumer behavior for years to come, but a robust customer engagement platform is required to collect data, monitor consumer actions, segment groups, deliver targeted messages, and track metrics. Creating individualized experiences with CleverTap is a snap. Behavioral segmentation is just one feature that drives retention and increases customer lifetime value. This type of platform is quickly becoming a necessity as customers demand personalized communications from every brand.