Why use behavioral segmentation?
Although there‘s nothing inherently wrong with demographic or firmographic segmentation, these more rudimentary types of email marketing segmentation rely heavily on assumptions rather than facts.
Here‘s what we mean: Grouping an audience by demographic data points requires marketers to correlate unrelated characteristics to a persona‘s buying behavior. For example:
- A thirteen-year-old girl from Milwaukee is more likely to buy hair clips than a 45-year-old man from Boca Raton.
Although this makes sense in theory, it discounts the fact that the 45-year-old has spent the last three days searching for hair clips to purchase for his daughter‘s upcoming ballet recital.
Simply put, behavioral segmentation provides the necessary context email marketers need to pinpoint the demands, motivations and mindset of the typical buyer.
This context may not seem important in the grand scheme of your entire marketing strategy, but don‘t be fooled, the context provided by behavioral segmentation can unlock marketing success in many different capacities.
Here are a few:
Improve your personalization
It‘s no secret, email subscribers not only prefer personalized experiences, they demand them throughout every step of the buyer‘s journey.
In fact, 79% of organizations that exceeded revenue goals have a documented personalization strategy.
Behavioral segmentation transforms personalized marketing from a guessing game to an exact science. Just as we previously discussed, demographic data enables only basic levels of personalization—supported by averages, gut feelings and best guesses.
Behavioral data, on the other hand, requires a thorough analysis of actual buyer experiences and interactions.
Using behavioral data to segment your email marketing campaigns allows you to predict a subscriber‘s next steps and offer the marketing materials and tactics that will be most impactful at any given moment.
Predict future behavior
As email marketers continue to collect and analyze behavioral data, it gets easier to identify patterns and determine how a subscriber is going to interact with your company next.
Using these patterns and behavioral segmentation, email marketers can reach out to prospects or customers at critical points in the buyer‘s journey to offer personalized content and move them through the sales funnel faster.
Make smarter decisions regarding budget and resource allocation
As with most things in life, the more information you have at your disposal, the easier it is to make smart decisions. The same goes for email marketing.
When you have access to data surrounding behavior, buying habits and trigger events, it‘s easier to allocate marketing budget and resources toward the channels and initiatives that need it most. Thus making the most out of your different initiatives and campaigns.
Generate more useful reports and analytics
It‘s one thing to track business performance, campaign metrics and website analytics as a whole, but looking at these same reports for audiences segmented by behavior opens up an entire world of detailed, actionable insights.
Behavioral segmentation allows email marketers to study trends within different audiences and optimize each part of the buyer‘s journey for every type of prospect that comes into contact with your brand—allowing you to successfully scale and grow your business quickly.
7 ways to leverage behavioral segmentation to achieve marketing goals
Not all types of behavioral segmentation will work alike. It all depends on your business. The way you decide to segment your audience is entirely up to you and should be based on how your individual business operates.
Having said that—there are several tried and true methods of behavioral segmentation that tend to work well across a variety of industries and business models.
In this next section, we take a look at a few of these more popular segmentation tactics to get you started on the right track. Let‘s get into it!
1. Segment your audience by buying behaviors and patterns
Segmentation based on a person‘s buying habits or behaviors accomplishes several vital tasks:
- It allows email marketers to reach out to subscribers and nurture them based on their exact stage within the buyer‘s journey.
- It allows email marketers to ditch the all-too-common, one-size-fits-all view of the sales funnel.
Both are critical steps toward earning a prospect‘s business.
Allow us to elaborate. Email readers almost never follow a direct path to become a paid customer. Depending on personal preferences, budget constraints, business needs, and urgency, most subscribers approach a purchase decision differently.
Some will conduct extensive research and engage with many pieces of content from many different brands, through a variety of channels. Others want to get straight to the point without much interaction or hand-holding.
With purchase behavior-based segmentation, marketers can now cater to several different buying styles to maximize the effectiveness of their email campaigns.
2. Segment your audience based on the problem or pain point they‘re trying to solve
Whether you sell one product or one million products, people have many different motivations to buy them.
Segmenting your audience based on the pain point or critical issue they‘re trying to solve helps email marketers cut to the chase and address the most important concern first.
Let‘s go back to our hair clip example.
Based on your website analytics, you notice a significant amount of buyers come from organic search using a wide variety of search queries.
These include searches like: “popular hair clips”, “best hair clips”, “soft hair clips for sports”, “hair clips for curly hair”, and so on. Yet each of the prospects making these searches end up purchasing the same exact product.
Now, it wouldn‘t make sense to initiate an email campaign geared toward individuals who have curly hair, because the reality is that your hair clips work for a wide range of hair types and textures.
But if you were to use behavioral segmentation based on website searches or page visits, you could potentially target people with curly hair, people looking for sports-appropriate hair clips, and people searching for the latest hair trends with three separate email campaigns.
3. Segment your audience based on how they use your products or services
Metrics related to product usage are often a strong indicator of how engaged a customer is, how loyal they are to your products and services, and how likely they are to leave you for a competitor.
Because of this, many email marketers find it extremely effective to segment their subscriber list based on product usage.
The benefits of product usage-based segmentation are particularly compelling: this tactic helps prevent customer churn and allows you to identify at-risk customers or accounts.
Product usage-based segmentation can even be used to collect customer feedback from your subscribers or implement suggestions for improvement.
4. Segment your audience based on specific events or timed triggers
The average business experiences highs and lows that come with buying trends and seasonality. Some of these trends are more predictable and happen annually.
Others are based solely on the buying journey of the average customer, i.e. satisfied customers are most likely to repurchase the hair clips mentioned in previous examples six to eight weeks after their initial purchase.
The actual trigger events or timing of effective time-based segmentation will vary greatly from business to business, so it‘s important to analyze customer behavior and patterns to understand when and why people buy from your business at certain times.
Other suggestions for effective time-based segmentation include business trends surrounding special occasions, seasons or time of year, length of time since last purchase, renewal dates, length of time since last engagement, and more.
Don‘t be afraid to get creative and test new ideas—often, you won‘t know if something works until you try it.
5. Segment your audience based on customer satisfaction
A customer‘s level of satisfaction often dictates how they interact with your brand and products.
Typically, a customer who‘s had consistently negative experiences with your company won‘t respond to the same messaging as, say, a loyal customer who regularly advocates for your brand online.
When marketers segment their email audience based on customer satisfaction, they can focus on upselling happy customers and preventing unhappy customers from taking their business elsewhere.
Email segmentation based on customer satisfaction can be implemented based on how many interactions someone has had with your support staff, how many complaints they‘ve filed, how many returns they‘ve made, etc.
6. Segment your audience based on their specific interests
Another fairly straightforward type of behavioral segmentation is grouping your readers based on their interests.
While being interested in something isn‘t necessarily a behavior, it‘s relatively easy to identify a person‘s interests based on their behavior. Consider how you, as a consumer, use the internet, shop for products and participate in activities or groups.
Using only public information about these behaviors, a stranger could likely pinpoint several of your interests based solely on your search history, event registration, and previous purchases. Your subscribers are no different.
Simply look at how your subscribers interact with your branded content and marketing channels to start uncovering information about the topics they‘re most interested in.
If you‘re not sure where to start, ask your subscribers what they‘re most interested in via a poll or survey!
7. Segment your audience based on customer loyalty
Similar to segmentation based on customer satisfaction, email marketers can also segment their audience based on how loyal a customer is.
This type of segmentation is particularly effective when crafting email campaigns to support customer marketing and product marketing initiatives.
Whether you‘re distributing a customer survey to collect feedback, running a beta test of a new product, or simply trying to reduce customer churn, you can leverage highly targeted emails based on customer loyalty to achieve your desired outcome.
Getting started with behavioral segmentation
Now that we‘ve covered the basics and examined a few different types of behavioral segmentation, we want to leave you with four actionable steps to kickstart your behavioral email marketing plan.
Determine your goals
As with any new marketing initiative, it‘s important to start by setting one or several goals for your program.
Several common goals associated with behavioral segmentation are increasing engagement, generating leads, reducing customer churn, or re-engaging past customers.
No matter what your goal is, be sure to set clear measurable expectations for yourself and your team. That way, you‘ll be able to measure your progress and tweak your campaigns to produce better results.
Select the type of behavioral segmentation that will allow you to achieve these goals
Once you understand your goals, it‘s time to decide what type of behavioral segmentation will help you accomplish them.
There‘s no right or wrong way to go about this process, but you‘ll find some types of behavioral segmentation work better than others when it comes to specific initiatives.
For example, if your goal is to generate leads for one specific product, you might find that segmenting your subscribers based on customer loyalty won‘t yield the results you‘re looking for.
Instead, you might have more success segmenting your audience based on their interests, major pain points, or past engagement.
Analyze customer and prospect behavior to gather the data you need
This next step is a bit more ambiguous, but it‘s arguably the most important.
Without a deep understanding of customer behavior and access to the data you need, your behavioral segmentation efforts will inevitably fall flat.
The best way to explain this process is to look at some examples. But, before we do that, a quick disclaimer.
How you collect and analyze behavioral data will change drastically depending on the tools you use, your key objectives, the specifics of your products and sales cycle, and so much more.
This process won‘t look the same for everyone, so this section is meant solely to provide a starting point for beginners and to serve as inspiration for those looking for new ideas.
Now, let‘s look at a few examples of the critical marketing metrics and thought processes required to execute a few common types of behavioral segmentation.
- Buying behaviors
Collect and analyze website engagement data that illustrates the most common paths your prospects take to become purchasing customers.
Understand where your buyers come from and the different factors that influence their decision to make a purchase. Look at landing pages, clicks, conversions and campaign engagement.
Then, group your email subscribers based on critical patterns you identify that ultimately align with your goals.
- Pain points
Work with customer-facing teams to identify common complaints and the most obvious or frequent behaviors associated with those complaints.
Then, track and segment your audience accordingly. If you lack the tools or resources to do this, consider adding an additional question to your forms that allow new subscribers to specify what problem it is that they‘re trying to solve.
- Product use
Product usage data is likely stored within the backend of your website, a proprietary interface, or a third-party platform. This data must be paired with careful analysis and anecdotal evidence in order to understand what each level of product usage means.
For example, is someone who uses your product every day more likely to purchase a different offering from you? Or, is someone whose usage has tapered off in the last few weeks about to end their contract with your company?
- Occasions or trigger events
We touched on this briefly above so we won‘t spend too much time repeating ourselves. But to segment your audience based on trigger events or timing, you must have a thorough understanding of when and why sales peak and dip.
Are things slower during the summer? Are people more likely to purchase your products during the holidays? At what point does it make the most sense to try and re-engage lost customers or inactive subscribers?
A subscriber‘s interests can be uncovered using a variety of data: website analytics, market research, content engagement, and more.
When in doubt, ask! Email subscribers are often willing to provide their input if it means an improved experience.
- Customer loyalty
Customer loyalty data will live within your CRM, a third-party software, or even a proprietary system.
The types of data that indicate customer loyalty are things like the number of purchases, the total amount of money spent, referrals, shares and engagements.
Once you identify the different tiers of loyalty within your customer base, you can then use personalized campaigns to either capitalize on or boost a particular segment‘s loyalty to your brand.
Analyze your results, optimize your segmentation and try again
We‘ve mentioned this last step throughout this article a few times, but it‘s worth repeating. Behavioral segmentation isn‘t a set-it-and-forget-it type of strategy.
It requires monitoring, testing, re-testing and optimization. You almost certainly won‘t get behavioral segmentation right on your first shot. So, be patient, get creative and switch up your approach if it doesn‘t seem to be working.
Final thoughts about using behavioral segmentation
As industry standards and customer behaviors continue to evolve, our email marketing strategies must follow suit. Fortunately, modern technology has made it easier than it‘s ever been to understand what our customers want and how they engage with our brands.
Here‘s a quick recap of what you‘ve learned about behavioral segmentation in today‘s post:
- Email marketers can leverage behavioral segmentation to predict subscriber behavior
- Behavioral data allows for smarter budget decisions and resource allocation
- Behavioral segmentation facilitates more actionable reports
In this post we discussed segmenting your email lists based on the following:
- Buying behaviors and patterns
- Common problems and pain points
- Product usage
- Specific events or timed triggers
- Customer satisfaction
Finally, the important steps to getting started with behavioral segmentation:
- Set clear goals for your behavioral segmentation strategy
- Select the types of behavioral segmentation you‘ll use, based on your goals
- Gather data by analyzing customer and prospect behavior
- Analyze, optimize, try again
If you haven‘t explored the world of behavioral segmentation, it‘s time to get started.