Behavioral Segmentation is a market segmentation process that focuses on examining consumers' behavior towards a product or service. It helps businesses understand and group their audience based on factors such as their buying habits, product usage, decision-making patterns, and other behavioral attributes.
Behavioral segmentation analysis allows marketers to identify consumer behaviors and develop targeted marketing campaigns that speak directly to the consumer's interests.
Behavioral targeting is a type of online advertising that uses data collected on an individual's web browsing behavior, such as the pages they've visited or searches they've made, to select which advertisements are displayed to that particular consumer.
Marketers use behavioral targeting to send relevant ads that would appeal to the consumer based on his/her Internet surfing behavior. The result of this is more efficient ad-campaigns with increased click-through rates and conversions.
While psychographic segmentation examines the consumers' personality traits, values, interests, and lifestyles as predictive indicators for purchasing behavior, behavioral segmentation solely focuses on observing past actions taken by customers using a product or service.
Psychographic segmentation divides the market based on subjective factors such as attitudes while behavioral segmentation divides the market based on objective factors like how often they purchase products.
Lifestyle segmentation categorizes people based on their activities, interests, opinions (AIO), demographic characteristics, and social background. It examines motivations behind purchasing decisions and seeks relationships between consumer preferences and their lifestyles.
Lifestyle segmentation works hand-in-hand with behavioral segmentation where it consolidates further customer traits beyond measurable buying habits.
User personas are fictional characters that represent a company's ideal customer using real customer data. User persona development encompasses an in-depth understanding of customers' purchasing behaviors and aims to develop specific customer segments with different characteristics and habits.
Behavioral segmentation analysis allows effective identification of user personas based on the criteria used for segmentation. Personas are used in product design, marketing strategy, and customer research to build a comprehensive understanding of specific target audiences.
The first step to implementing behavioral segmentation is data collection from analytics, demographic surveys, and market reports. Once this is done, the business must identify patterns that represent behaviors that should be targeted more efficiently. These patterns can be used to create custom segments that match consumer behavior.
After identifying its target audience, the company should enhance its marketing strategy to incorporate targeted messaging and targeted promotion delivery over different channels that would speak directly to the customers' interests.
Behavioral segmentation offers several benefits such as increased conversion rates, improved customer satisfaction, reduced marketing costs through efficient targeting, and better product design. By targeting customers with relevant messages and offers characterizing their behavior or needs, it builds loyalty among consumers, increases engagement with brands, and drives long-term relationships.
An example of how behavioral segmentation is used would be when a company offers discounts for recurring purchases or loyalty programs for frequent purchases. Another example is Amazon's product suggestions which are based on a user's previous search history or purchase behavior.
