Marketing segmentation has always been a key component of the most effective digital strategies. Dividing customers into smaller groups based on their needs and actions ensures you are best placed to efficiently solve their problems and in turn, sell more of your products.
Maximizing your first-party data—like customer location, age and gender—is a key first step towards seeing a clearer picture of who your customers are. But if you want to truly know what motivates them and offer them what matters—you need to go deeper. This is where behavioral-based data segmentation comes in.
Behavioral data segmentation can help you identify how your customers interact with your products and services. Fueling your strategy with tools like Epsilon’s proprietary data, can offer valuable insights that are actionable in real time, and help you guide shoppers through each touchpoint seamlessly.
This blog will define behavioral segmentation, break down its key benefits and outline the four main types of segmentation that—with the right solutions in place—can be leveraged to optimize your marketing strategy, create tailored onsite experiences and drive conversions.
In marketing, behavioral segmentation is a way to divide your customers into segments based on their behavioral patterns when they interact with a particular business or website.
Grouping people that visit your ecommerce business by purchase behavior, product usage and brand interaction in this way offers marketers a more holistic view of each shopper, enabling tailored onsite experiences that align products and messaging to each individual customer’s needs.
Going beyond the traditional demographic and geographic segmentation methods and utilizing behavioral data allows for the execution of more successful marketing campaigns.
If you have a successful ecommerce business, you most likely already know a bit about who your customers are. Behavioral segmentation goes a step further, revealing what they do—and why.
Every action a shopper takes on your site can provide you with deeper layers of insight into their motivation and intent—ensuring you connect seamlessly and provide onsite experiences that reflect their needs and interests.
Behavioral segmentation can enhance your marketing efforts in these important ways:
provides granular data segmentation and analytics that you can tap into for advanced insights from various touchpoints. Fueled by industry-leading data and identity resolution, our solutions are built to provide a clear view of who is shopping your site—and respond in real time.
And the more clearly you can see your customers, the easier it will be to provide customized onsite experiences that build meaningful connections and drive higher ROI.
Customers expect personalized experiences. When done right, segmentation can help you create onsite experiences that feel personal to each customer—ensuring they feel like you know them.
Let’s break down four main types of behavioral segmentation that provide a holistic view of your customer throughout their buying journey. Each one reveals actionable insights you can use across touchpoints to help guide their purchase decisions.
Segmenting by purchase behavior can help you pinpoint varying trends, and behavior patterns that customers have at purchase. Businesses that leverage this type of segmentation benefit from seeing a map of each customer’s position in their journey—their role in the purchasing process, the obstacles they are facing, the incentives they’re most likely to respond to—allowing for timely, personalized engagement.
Occasion-based segmentation categorizes customers who are most likely to interact with your brand or purchase from your website on either specific occasions or set times. It can also be triggered by a customer’s daily routine, like a happy hour round of drinks after work or routinely buying a morning coffee beverage.
Segmenting by benefits sought refers to dividing your audience based on the unique value proposition your customer is looking to gain from your product or service.
For example, some people buy toothpaste for whitening benefits while others seek comfort to their sensitive gums. Investing in the right technology can ensure that you surface products that are most relevant to the benefit each person cares about most.
Loyalty-based segmentation measures the level of engagement a customer has with your brand—distinguishing between first-time buyers, repeat shoppers or high-tiered rewards program members.
The goal of this type of segmentation isn’t just recognizing your best customers, it can help you focus on repeat customers, their needs, behavior patterns—ultimately, optimizing future campaigns, improving your businesses’ value proposition and strengthening your brand positioning.
In addition to purchase, benefit, loyalty and timing-based segments, there are other types of behavioral segmentation you can use to optimize the onsite experiences of your ecommerce business—such as customer journey stage, engagement and customer satisfaction.
Segmenting by customer journey gives direction to your business objectives and helps you provide a path for customers to seamlessly move from awareness to retention. The insight to nudge customers from desire to purchase requires well-positioned product imagery and good website design.
Our onsite personalization platform provides a data-driven approach that streamlines website journeys, offering a comprehensive view of each stage your customer is in, as well as touchpoints they interact with—increasing opt-in rates, conversion rates and AOV.
Just like customer journey stage segmentation, grouping customers based on their engagement levels can help you to understand the reasons why their behavior falls into specific categories.
Customer engagement is categorized by three levels:
Segmenting your customers in this way will aid customer retention by dividing the relevant materials between those engaged, and those unengaged, and ultimately help to reduce churn.
Behavioral segmentation based on satisfaction is the most straightforward of them all. Customer feedback—like surveys and NPS scores—can help you to enhance your product or service by understanding which features your customers most desire, or which could help you stay ahead of competitors.
By segmenting customers based on their behavioral data, you gain a more comprehensive look at how you can adjust your messaging, brand, marketing materials and ultimately products or services to stay ahead of the competition and reduce your customer churn.
While creating marketing campaigns that resonate and offering customized onsite experiences does require deeper insight into your customer—that’s just the start. Leveraging that insight effectively is the only way to execute higher performing campaigns and drive better outcomes.
Establishing an effective behavioral segmentation strategy takes an investment in a technology partner that can provide a solid foundation of data and identity for you to build on. Epsilon Accelerate offers best-in-class identification and onsite personalization capabilities that can help seamlessly communicate with your shoppers—always sending them the right message at the right time.
