Behavioral Segmentation

Behavioral segmentation is a type of marketing segmentation in which customers are categorized into groups based on a common behavioral pattern. Customers may be at the same stage of their lives, have previously purchased specific goods and services, or have identical responses to your communication.

Behavioral segmentation categorizes customers according to their behavior when interacting with companies and considers customers as one segment who show the same type of behavior pattern.

This category of segmentation, as the name implies, studies consumers’ behavioral traits. It examines their knowledge, attitudes, and response to products, services, promotions, brands, or other goods.

Behavioral segmentation is a way to better understand customers’ needs and wants by providing something that is uniquely based on how they behave when buying products or services. This allows companies to offer customized products to their customers.

Companies that use behavioral segmentation to improve their marketing effectiveness can create customized experiences for their audiences based upon their preferences and stages of the buying cycle.

Segmenting consumer markets is possible by focusing on the following behavioral factors: benefits sought, purchase occasion, purchase behavior; usage; attitude, beliefs; values; and perceptions. We will now discuss each.

Benefits Sought

This segmentation criterion is used when different benefits are demanded by people in a market from a product. The benefits sought could be used to segment the fruit drink market.

Segmentation by benefit is an important method for segmentation. Marketing is about providing customers with the benefits they want. Understanding markets requires a fundamental understanding of the benefits that people value.

This knowledge can be used to create a framework for classifying people. Profiling can then be used to determine the type of person in benefit segment to target right customer for the optimal utilization of resources.

Purchase Occasion

Customer purchase occasions can be used to distinguish them for segmenting market. A product, such as tyres or service like Plumbing can be bought as a result either of an emergency or as a routine, unpressurized purchase. In an emergency buying situation, price sensitivity is more likely to be lower. Some products, such as mobile phones, maybe bought as gifts or self-purchases.

This can impact marketing mix and targeting decisions. Advertising budgets should be focused on the period before Christmas if it is determined that the gift market is concentrated around Christmas. Packaging design can differ between gift and personal-buy segments.

Special occasions like Christmas and Easter are often associated with higher prices. Prices drop quickly after special occasions, such as Easter Sunday when chocolate eggs are on sale.

Purchase Behavior

The key task when new product launches are to identify the market’s innovator segment. These individuals may possess unique characteristics that enable communication to be directed specifically at them. Pioneers are more likely than others to purchase the product within a short time.

Others may take longer to evaluate the benefits and might delay purchasing until the pioneer customer have taken their early risks.

The brand can only be promoted to a wider audience once the credentials of these “innovators” customer are established. The number of electric cars is relatively small and their prices are high. This means that this type of car has to still appeal to a broad audience.

Brand loyalty is a segment variable that can be useful in the consumer durables market. Volkswagen, for example, has separated its customers into first time buyer, replacement buyers , and switch buyers. These segments can be used to forecast and measure market trends and performance.

Usage

You can segment customers based on whether they are heavy users, light users, or non-users of a product type. Profiling heavy users will allow them to get the most marketing attention, especially promotion efforts. This is based on the assumption of brand loyalty. The 80% – 20% rule is sometimes used, in which approximately 80 percent of a product’s sales are generated by 20 percent of customers.

It is important to remember that although users can be useful in identifying buyers for particular products, it does not necessarily provide insight into an individual’s “shopping basket”. Luxury foods and drinks might be bought for special occasions like birthdays, while value groceries could be used for daily consumption.

It is important to keep in mind that market segmentation refers to the grouping or organization of people or organizations that share similar characteristics. This can have implications for the development of marketing strategies.

Perceptions and Attitudes, Beliefs, Values, and Convictions

Studying perceptions, attitudes, and beliefs is the final behavioral basis for segmenting consumer market segments. Because perceptions, attitudes, and beliefs are often closely linked to behavior, this is called a behavior variable. By identifying consumers who are similar to the product in a market (perceptual segmentation), and those with similar beliefs (belief Segmentation), we can group them.

Segmentation analyses can be used to understand how customers see the market. There may be opportunities to target specific groups more effectively if the perceptions and beliefs of the groups are studied well for making marketing strategy for market segmentation.

The Benefits of Behavioral Market Segmentation

Behavioural segmentation provides required resources for marketers to identify customers’ needs, motivations, and behavior. This will allow marketer to use the customer’s existing buying habits and tailor their marketing strategies accordingly.

Hyper-targeting allows marketer to target the right customer at the right time. Behavioral segmentation provides more benefits to marketer if apply accurately in marketing. Let’s explore few benefits of behavioral market segmentation.

Better Personalisation

This allows you to target different audiences with personalized offers that match their buying habits. You can also choose the right channels and times to deliver these offers.

Increases Brand Loyalty

Customers who feel that they are treated well throughout the customer journey will naturally choose the brand over other brands. Behavioral segmentation allows eCommerce businesses to achieve extraordinary levels of customer satisfaction and retention, increase customer lifetime values, and boost long-term revenue. This is possible due to higher targeting accuracy and personalization.

Use Your Budget Efficiently

Behavioral segmentation allows you to prioritize your campaigns and make marketing more efficient. This allows marketers to spend less time on warmups or communicating with uninterested audiences.

Predicting Future Behaviours

Once you have segmented the customers based on common characteristics, your sales team and marketing team have the data. Based on the data available, you will know what your customers expect of you. It is possible to predict what your customers will want from you based on the available data.

You can also track the performance of your sales team. This gives you the opportunity to improve communication channels, update marketing strategies, and update product or service specifications based on customer needs.

Understanding Your Customers

Behavioral segmentation help to understanding your customers and allows you to group them according to their behavior and plan your marketing strategy accordingly. This provides various inforamtion to make other marketing plans for your business as well.