Behavioral Segmentation
What is Behavioral Segmentation?
Behavioral segmentation is a marketing strategy that divides customers into groups based on their interactions with a product or service, such as purchase behavior, brand loyalty, or product usage. By targeting specific behaviors, companies can create personalized marketing campaigns that better meet the unique needs and preferences of each customer segment, leading to improved engagement and higher conversion rates.
The Basic Idea
Have you ever wondered why certain ads seem to speak directly to you, while others either fade into the background or make you keep scrolling? The answer lies in human behavior. Our actions, habits, and subconscious choices shape the way we interact with and purchase products, and companies can harness this information to direct their marketing strategies to certain groups of people.
Behavioral segmentation is a marketing tool that delves into the behaviors that drive consumer decisions. This can include factors such as purchasing habits, usage rates, brand loyalty and awareness, and responses to marketing campaigns. By understanding these behaviors, companies can tailor and optimize their marketing efforts to better meet the needs and preferences of different customer segments.
Behavioral segmentation is a distinct type of market segmentation, which is the practice of dividing a target audience into smaller groups based on certain characteristics.1 There are several main types of market segmentation, including demographic, geographic, psychographic, technographic, and transactional, each focusing on different aspects of the consumer base. While these other segmentations look at who makes up a product or service’s customer base, behavioral segmentation looks at what those customers actually do. But why is behavior so important in marketing?
When trying to understand what customers want, it’s crucial to go beyond simple demographic information and examine concrete behaviors. To better understand why, let’s look at an example. Consider, on one hand, the legendary British musician “Ozzy” Osborne, former lead singer of Black Sabbath, and on the other hand, King Charles III, the current British monarch. Both men are white, born in 1948, originally from England, and rather wealthy. On paper, they appear to be very similar.
However, their behaviors couldn’t be more different. Ozzy is known for his outlandish, eccentric, and sometimes shocking on-stage behavior, while King Charles is considered to be a man of few words, usually maintaining a thoughtful and composed demeanor. If a brand marketer wanted to target both men effectively, they would probably need two drastically different approaches. For example, perhaps Ozzy would be drawn to a commercial with bright, flashing colors and loud background music—meanwhile, King Charles may prefer traditional, even simple fonts and graphics, accompanied by soothing sounds.
There are several different ways to segment customers according to their behaviors, but these are some of the most common:2
- Purchase behavior: This approach uncovers the diverse trends and patterns customers exhibit when deciding to make a purchase. This type of behavioral segmentation offers valuable insights into a customer’s mentality throughout the purchasing process, the challenges they encounter, and the incentives they are most likely to respond to, among other factors.
- Occasion and timing: This segmentation categorizes customers according to when they are most likely to view an advertisement, interact with a brand, or purchase from a website. For example, customers could be everyday shoppers who make purchases throughout the year or holiday shoppers who only make purchases on special occasions. This approach helps brands to know exactly when and how often to target certain audience members.
- Benefits sought: Different customers want different benefits from a product or a service; some prioritize quality while others look for the best deals and discounts. This segmentation divides the audience based on the unique value proposition various customers seek to gain from a product or service. Understanding what drives customer purchases helps to define which product feature or service aspect to emphasize in marketing.
- Customer loyalty: Some shoppers stick with brands throughout their lives while others constantly switch based on price, availability, or popularity. This approach looks at the level of loyalty a customer has with a brand and helps to understand the behaviors of existing and repeat buyers. Understanding why these customers keep coming back can significantly enhance marketing campaigns and help increase brand loyalty.
Marketing segmentation is a natural result of the vast differences among people
Donald Norman, Director of the Design Lab at the University of California.
About the Author
Laurel C Newman, Ph.D.
Laurel Newman is a social psychologist and an applied behavioral scientist. She began her career as a psychology professor and department chair at Fontbonne University, leaving academia in 2018 to help create a behavioral science function at Maritz. Laurel consults, conducts research, and delivers corporate behavioral science curricula. She writes articles and books on topics such as employee engagement and how to build a behavioral science function within an organization. Laurel has a Ph.D. in Social and Personality Psychology from Washington University in St. Louis. She works in the Experience Center of Expertise at Edward Jones and is co-founder and advisor to the employee loyalty startup Whistle Systems.
