Customer segmentation is critical to the success of any business. Since personalization and customer experience are business deciding factors, effective targeting is a must.

Traditional customer segmentation strategies focus on who the customer is, and customer segments are based on demographic traits such as gender or age, and firmographic traits such as company size and industry.

But understanding who your customers are is not enough!

Behavioral segmentation is customer segmentation that focuses on the behavior patterns that customers display when interacting with your brand or when making a purchase decision. It allows you to classify customers into groups according to their knowledge, attitudes, use, or response to your product, service, or brand.

Personalization

Behavioral segmentation helps you understand how to target different customer segments with different offers, at the right time through their preferred channel, to help them move towards successful results on their paths.

Prediction

By using behavior patterns, you can predict and influence future customer behaviors and outcomes.

Priorization

Behavioral targeting helps you identify high-value customer segments and initiatives with the most potential; This helps you make smart decisions about the best way to allocate time, budget, and resources.

Performance

With effective behavioral segmentation, you can track growth patterns and changes in vital customer segments. This helps you assess the health of your business and compare its performance to your target. In this way, you can test the size and value of various customer segments and see how the “positive” and “negative” segments are growing or shrinking.

Two types of behavioral segmentation

1. Buying behavior

Segmentation based on buying behavior is about finding trends in how different prospects behave when making a purchase decision.

Buying behavior can help you understand:

• How various customers approach the purchase decision

• The difficulty of carrying out the purchase process

• The role of the customer in the purchasing process.

• Vital barriers along the purchase route

• Important and less predictive behaviors of customers who make a purchase

2. Benefit sought

When customers look at a product or service, their behavior can show valuable information about what benefits, features, values, and issues are important motivating factors that influence their purchase decision.

When a potential customer places a higher value on one benefit than the other, this primary benefit is the key motivating factor driving that customer’s purchase decision. For example, customers buy toothpaste for different reasons, such as whitening, sensitive teeth, price, or taste.

Two prospects may have similar demographic or firmographic traits, but they may have different values ​​regarding which benefit or feature is most and least important to them.

By understanding the behavior of each lead as they interact with your brand, you can group customers into segments based on desired benefits and customize your marketing strategy for each segment.