Behavioral Segmentation for Beginners – A Complete Guide

As a brand that tries to gain more customers online, you face the constant challenge of connecting with your target audience effectively. With more consumers connected online than ever, understanding how to use market segmentation has become a necessity.Among the various methods, behavioral segmentation stands out as it uses users' actions and behaviors as a guide for personalization.

In this article, we'll explore this approach, analyze the variables of behavioral segmentation, and expand on specific examples that will show you how to utilize it.

What is Behavioral Segmentation?

Definition of Behavioral Segmentation

Let's begin by defining what is behavioral segmentation. In essence, it is a marketing strategy that divides an audience based on the users' behavior, actions, and decision-making patterns. This approach is particularly helpful in e-commerce.

This approach doesn't focus on the "who" and "where" of customers, like other types of segmentation, but instead emphasizes the "why" and "how". Therefore, it's no wonder that the variables of behavioral segmentation include the purchase history, brand loyalty, preferred communication channels, usage rate, and purchase timing of your user base. This way, it hopes to understand the motivation that drives your customers to complete a purchase from your company.

Importance & Benefits

Behavioral market segmentation has become one of the most critical strategies for success in modern marketing. This is because it has enabled companies to create highly targeted, relevant experiences for the different customer segments. Nevertheless, this approach has many more benefits that make it worth adopting. The most significant ones are the following:

Variables of Behavioral Segmentation

The variables of behavioral segmentation, as well as the behavioral characteristics in marketing, categorize your customers based on various factors that affect the way they interact with your brand. These variables include the following primary types:

• Purchase Behavior: This variable examines why and how customers make their purchasing decisions. For instance, it can be different for habitual buyers and impulse buyers. Some might browse more product pages before they add any to their cart, and others might make a quick decision.
• Benefits Sought: Customers usually take into consideration the benefits that a product offers. However, different segments value different aspects. By understanding what your customers value the most, you can focus on delivering these benefits to specific segments.
• Customer Loyalty: Some customers showcase consistent loyalty to a brand, while others may switch frequently. Spotting these loyal customers, allows you to reward them and strengthen your relationship with them.
• Usage Rate: Another variable is how frequently your customers use your product or service. For instance, this is invaluable in the case of a mobile app. High-usage customers often have more advanced needs than occasional users, and you need to pay attention to the marketing approach you will use with each segment.
• Timing: This variable focuses on the timing of the purchases. Was it a seasonal item or was it a timeless piece? Was it a part of the regular purchasing cycle or a part of a sales campaign?
• Buyer Readiness Stage: The buyer's journey includes several stages. Therefore, you can use this variable for even better results. By segmenting based on buyer readiness, you can customize your content to give a small push that will lead to an actual purchase.

Behavioral Segmentation Examples and Characteristics

Now that we have analyzed the basics, we can see some indicative behavioral segmentation examples. All of them, are going to illustrate the approach's effectiveness in different industries.

Example A: E-commerce

Let's start our examples of behavioral segmentation by examining the case of an online fashion retailer. In this case, the e-shop can distinguish three primary segments:

• Frequent Buyers: These are all the customers who purchase items regularly. These users will be the ones who tend to engage with new arrivals and are interested in premium items. By identifying this group, the retailer can give them access to exclusive early-access promotions, as well as personalized thank-you messages after each purchase to strengthen their bond.


• Occasional Shoppers: This group consists of users who make a purchase once every few months, such as on special events or seasonal sales. These users will respond well to discounts; thus, the retailer should use this tactic to lure this segment into the e-shop.


• Sale-Only Shoppers: The last segment contains customers who only make purchases during big discounts, such as clearance sales and Black Friday sales. For this segment, the online store can promote only deep-discount offers to drive them to their website.

Example B: Streaming Services

A streaming service can leverage the capabilities of behavioral market segmentation to deliver a personalized viewing experience to its subscribers. The key segments that we can create in this case are the following:

• Genre-Based Viewers: Some of the provider's subscribers will showcase a strong preference for a specific genre. By tracking viewing history, the platform can start recommending more relevant content to them. This will boost their satisfaction and the time they spend on the platform.
• Binge Watchers: These users will typically watch multiple episodes in one sitting. For this segment, the platform can recommend new series and highly bingeable content. Furthermore, they can send personalized “continue watching” emails to bring them back to the platform and increase their engagement.
• Casual Viewers: Another segment that we can note is the casual viewers. These are the users who watch content sporadically and often prefer movies rather than series. To appeal to this market segment, the platform can focus on promoting newly released or seasonal movies.

Example C: B2B SaaS Company

The final of our behavioral market segmentation examples study the case of a B2B SaaS company specializing in project management software. For this example, we can analyze how businesses interact with the company's software, and identify these three core segments:

• Power Users: This is the segment of users that are highly engaged with the app and user its advanced features. For this group, the company could provide exclusive access to beta features, in-depth tutorials, and VIP customer support. Additionally, they can send personalized emails with tips on how to maximize productivity with the platform. This is a strategy for fostering a sense of partnership and appreciation.

• Low-Engagement Users: This group contains users who don't go beyond the basic functionalities of the platform. To make them more engaged, the company can send them step-by-step guides, short tutorial videos, and invitations to live training sessions. Furthermore, they can give them free-trial access to more advanced features to let them explore what the platform has to offer. The goal is to make them power users in the future.


• Enterprise Clients: Large clients typically require additional customization and technical support, regardless of whether they are power users or not. To meet their needs, the company needs to offer tailored solutions for these users, such as training sessions and custom integrations. Moreover, enterprise clients can receive regular check-ins and quarterly reports that highlight the productivity gains from the use of the software.

Behavioral Characteristics in Marketing

These examples of behavioral segmentations showed you how to use this approach in different cases. But you must also keep in mind the behavioral characteristics in marketing, which define how each segment behaves within the marketing funnel. The ones that you must keep track of are the following:

• Awareness: Is the customer aware of your brand or product? Behavioral segmentation can help you identify whether individual users require awareness-building content or if they're already familiar with what you need to offer.
• Interest and Engagement: Tracking engagement through actions, such as clicking on ads, reading blog posts, or signing up for newsletters, reveals how much your customers are interested in your brand. These insights will show you in which stage of the buyer journey this segment belongs.
• Decision-Making: Understanding decision-making trends allows you to personalize the incentives that drive purchases or retain loyal customers. For example, some customers are waiting for a big discount on a particular product, but others are more prone to impulse purchases.

Behavioral Market Segmentation with EngageLab

If you are ready to follow these behavioral market segmentation examples, you can start by signing up for a platform that simplifies this strategy. EngageLab is a platform that offers advanced tools that make data-driven segmentation accessible and effective.

Here's how EngageLab's products facilitate this invaluable marketing strategy:

• Real-Time Data Collection and Analysis: EngageLab allows you to track real-time customer interactions across all of your channels. Regardless if you've sent an email campaign or an app push notification, you can easily monitor your campaign at all times. This allows you to gather rich data on behavioral patterns that you can utilize in future campaigns and marketing endeavors.


• Omnichannel Engagement: EngageLab integrates multiple channels, from email to push notifications, allowing you to reach customers through their preferred methods. Omnichannel engagement ensures that each behavioral segment will receive consistent, personalized messages, thus fostering a seamless customer journey.


• Automation and Personalization: The platform allows you to create personalized trigger emails. For instance, if a user abandons their cart, EngageLab can automatically send a reminder email with an exclusive discount. This campaign will be crafted specifically for this particular segment, which will lead to better results.


• Audience Lists: In EngageLab, you can also create custom audience lists quickly and easily. If you have spotted any behavior patterns among users, you can segment the addresses to send personalized campaigns to them. This way, you will maximize the results of your communications.

In Conclusion

In a competitive market, behavioral segmentation gives you an advantage over your competitors. EngageLab is a valuable partner that helps you delve into the world of segmentation. Sign up for the platform today to elevate your communications and send personalized campaigns to your customers.