Behavioral Segmentation: The Smart Targeting Strategy

Why is behavioral segmentation important?

Are you debating if behavioral segmentation is worth the effort? Here are 3 ways you can benefit from targeting specific actions, not just demographic categories.

Enables personalized marketing

When you track customer behaviors, your marketing can finally feel truly personal. You’ll notice who always buys your limited-edition products, who browses your blog before purchasing, and who returns to view the same item multiple times. With these insights, you can create custom-crafted messages for each customer.

Optimizes marketing efforts

Not everyone is ready to buy, and that’s OK. Behavioral segmentation helps identify those who are, so you can spend marketing dollars where they count. Discounts can go to customers who need a final nudge, while loyal shoppers can receive exclusive offers instead of generic ads. This approach reduces effort while driving more sales and maximizing your marketing return on investment (ROI).

Reduces customer churn

When customers lose interest in your brand, you’ll see it in their actions. For example, they might skip over your emails or stop using your customer loyalty rewards program. With behavioral segmentation, you can spot these signs early. Then, you can win these people back with a personalized message, effectively boosting their lifetime value as a customer.  

Popular types of behavioral segmentation

When it comes to behavioral segmentation, you have options. It’s not a one-size-fits-all approach. Here are some of the most popular ways to group your customers based on their actions so you can find the perfect fit for your marketing strategy.

Benefits sought

With benefits sought segmentation, you group customers based on what specific benefits they want from your product or service. It’s all about understanding the primary value they’re seeking.

Think about a fitness app. Some users want to lose weight or build muscle, while others only want to track their daily activities. Each group wants different benefits from the same product. And they all need different levels of support to reach their goals.

To identify these benefit-based behavioral segments, analyze your product reviews to see what features existing customers mention most. You could also track which filters people use when browsing the product category pages on your website.

Customer journey stage

Grouping by the customer journey stage allows you to send tailored marketing messages at the right moment every time. It’s how to ensure each customer gets precisely timed messages that match their level of interest and need.

For instance, a first-time website visitor might want to learn what your product does. But someone who views the same jacket 3 times and checks your sizing chart might need free shipping to complete the purchasing process.   

You’ll need to play detective to understand where each customer is in their buying journey. Pay attention to what they’re doing, like browsing product pages, reading your blog, or repeatedly visiting the pricing page.

A first-time visitor browsing product pages signals the start of the customer journey. But if someone’s repeatedly checking the pricing page, they’re likely much closer to making a purchase decision.

Purchasing behavior

When you create segments based on purchasing habits, you gain valuable insights that help you match your marketing to how people naturally shop. These patterns reveal what potential customers need before making a buying decision.

For example, suppose you run an online clothing store. You might categorize your customers like this:  

• High-end shoppers: These customers happily buy designer brands no matter the price. They enjoy exclusive collections, personal styling tips, and being the first to see new products.
• Bargain hunters: These shoppers mainly look for sales or discounts, like limited-time offers, coupons, and everyday low prices.
• Trend followers: These customers are always looking for the latest styles. They’re interested in new arrivals, fashion inspiration, and influencer recommendations.   

You’ll need to analyze data from your online store to create segments based on purchasing behavior. Look at browsing behaviors, purchase histories, and interactions with your marketing materials, including blogs and social media posts.

Occasion purchasing behavior

When segmenting by occasion purchasing behavior, you focus on when customers buy, not just what they buy. It recognizes that people often buy certain things for holidays, personal milestones, and special events, and you can leverage those moments to increase sales.

For instance, a jewelry store might notice their customers only shop around anniversaries, birthdays, and other special events. By sending timely reminders a few weeks before those dates, they can capture sales that might otherwise go to competitors.

You can spot these patterns by tracking customer purchases throughout the year and noting spikes in certain products. Even better, ask customers directly about important dates through surveys or when they sign up for your loyalty program.   

User status

With user status segmentation, you group customers based on where they stand in their relationship with your brand. This way, you can tailor your interactions to suit each customer’s experience level and needs.

Common user status categories include:

• First-time buyers who are just getting to know your brand  
• Active users who buy your product or service regularly
• At-risk customers who haven’t bought recently 
• VIP customers who spend more than average and tell others about your brand

Identify user status by looking at what customers buy and usage behavior like how often they log in and which features they use most. Then, tailor your messaging accordingly. This way, you don’t mix up a new buyer with a long-time fan or treat a loyal customer like they’ve never shopped with you before.  

Brand interactions

Brand interaction segmentation looks at all the ways people connect with your company, including customers who:

• Purchase products but don’t engage in other ways
• Read your emails and blog content regularly
• Follow and interact with your social media accounts
• Participate in loyalty programs or brand communities
• Refer friends and family to your business

Tracking these interactions helps you identify your most valuable customers. You might be surprised that these customers don’t always spend the most money. Sometimes, a customer who makes smaller purchases but leaves positive reviews and refers your brand to their friends creates more value over time.

Measure brand interactions by looking at your website, email, and social media analytics dashboards. Also, consider monitoring brand mentions on third-party review sites and forums.

Customer loyalty

Customer loyalty segmentation groups people based on how often they buy from you and if they keep returning. Consider breaking customers into groups based on the following:

• How many times customers buy from you
• How much time passes between purchases
• How much they spend with your brand each year
• How often they recommend your brand to others
• If they regularly get loyalty program rewards  

Find these metrics in your sales records, referral data, and rewards program information. Also, review customer satisfaction survey results for signs of brand loyalty, such as willingness to recommend and overall satisfaction levels.

When doing this, reflect on what loyalty means to you. It’s different for every company. A streaming service might expect daily logins, a grocery store relies on weekly visits, and a mattress company bases it on purchases every 7-10 years.  

How to launch a behavioral segmentation strategy

Behavioral segmentation can transform your marketing, but it takes a clear plan to get it right. Here’s a step-by-step guide to launching your strategy.

Step #1: Define your marketing goals

Start by identifying what you want to achieve with behavioral segmentation. Maybe you need to increase customer satisfaction, boost average order value, or reduce cart abandonment. Your goals will determine which customer behaviors matter most.

For instance, if your goal is improving retention, you’ll want to segment based on purchase frequency, engagement levels, and customer lifetime value. If your focus is increasing order value, you might segment by buying patterns and product category preferences.

Keep your goals simple but specific. Instead of “increase sales,” aim to “increase repeat purchase rate by 15% among first-time buyers.” This clarity helps you measure success later.

Step #2: Gather and analyze customer data

With your goals defined, look at the behavioral data you already have in your analytics platforms, CRM system, and sales records. Record the data points that best match your marketing goals.

For instance, if you want to increase customer retention, you might record:

• How often customers buy from you
• When they last bought something
• Which products they typically buy
• How they respond to your emails
• Whether they use your loyalty program

You don’t need expensive tools to start behavioral segmentation. A simple spreadsheet can work for basic analysis. Export your customer data, then organize it to highlight the behaviors that matter most for your goals.

As you analyze the behavioral data, look for clear patterns. Do you have many new customers coming to your website through influencer links? Are there customers who only buy using email coupons? Do some shoppers always purchase the same product category while others browse your entire catalog? Jot down all the natural groupings you find.

Step #3: Identify your behavioral segments  

Now that you’ve spotted behavior patterns in your data, take the time to create actionable segments. Start with a few key segments that directly connect with your business goals.

For example, an online bookstore focusing on increasing customer value might create segments like:

• One-time buyers (make one purchase and never return)
• Occasional readers (buy 2-3 books per year)
• Avid readers (buy a new book every 1-2 months)
• Book collectors (purchase multiple books in a single order)

Confirm each segment is large enough to be worth your marketing efforts, typically 5-10% of your customers. Each group should behave differently enough to need its own marketing, while your segments should be specific so you can create targeted messages.  

Step #4: Develop targeted marketing strategies  

You can now focus on creating specific marketing strategies for each segment. The key is to match your message to what each segment needs to make a purchase or otherwise engage with your brand.

For instance, a fitness app might develop these targeted strategies:

• For new users who haven’t created a workout plan: Send simple startup guides, sample workout plans, and short video tutorials.
• For active users who work out 3 times weekly: Offer challenges, achievement badges, and tips for trying new workout types.
• For at-risk users who haven’t logged in for 30 days: Deliver a “We miss you” message with a personalized workout suggestion based on their past activity.

Think about which marketing channels work best for each segment. Active users might prefer notifications in the app. However, email might work better for reaching users who aren’t opening the app anymore. If in doubt, find channel preferences for each group by looking at your customer engagement data. 

Consider the frequency of your messages, too. Some segments might welcome daily tips, while others could feel overwhelmed by too many notifications. Finding the right balance helps maintain engagement without causing message fatigue.

Step #5: Set up marketing automation

Marketing automation helps deliver the right messages to your segments without requiring manual work for each campaign. Setup is usually straightforward when using e-commerce and email marketing platforms with built-in automation tools.

Start by creating automated workflows for specific customer actions. For example, a clothing retailer might set up these automations:

• When someone abandons their cart, send a reminder email after 4 hours, then a discount code after 24 hours if they still haven’t completed their purchase.
• When a customer views the same product 3 times without buying, send them product reviews or a comparison guide.
• When a loyal customer hasn’t purchased in 60 days, offer personalized style recommendations along with an exclusive offer to encourage their return.

Most platforms let you create “if this, then that” rules based on customer behaviors. These triggers can include actions like page visits, purchase history, email opens, or app usage patterns.

Only set up a few key automations for each segment to start. You can always add more complex workflows as you get comfortable with the process and see what drives results.

Step #6: Test, measure, and optimize

Behavioral segmentation isn’t a one-time project. To get the best results, you need to continually test your approach, measure the outcomes, and refine your strategy.

Remember those goals you set way back in Step #1? Now’s the time to see if they’re coming to life. For instance, if you wanted to increase customer retention by 20%, measure whether your targeted campaigns for at-risk customers brought them back.

Look at key metrics like:

• Open and click rates for emails
• Conversion rates for special offers
• Changes in purchase frequency
• Increases in average order value
• Customer lifetime value improvements

Be ready to adjust your behavioral segmentation strategy as you learn more. If something isn’t working, don’t be afraid to pivot. Maybe you need to define a segment, change your messaging, or develop even more tempting offers.

Plan to review your metrics every quarter to see how it’s going. Compile a report with your results to track your progress and learn from your insights over time.

Key takeaways

• Behavior reveals all: Behavioral segmentation looks at what customers do, like how they browse your website, to understand them better than just knowing their age or where they live.   
• Segmentation strategies abound: With this type of marketing segmentation, you sort customers by different habits, like what they buy and how they interact with your brand.
• Personalization is king: With behavioral insights, you can tailor your marketing to fit specific actions, like sending special offers to customers who frequently abandon carts.
• Automation rules: Save time and effort by setting up automated workflows that respond to customer behaviors in real time, ensuring your message always lands at the right moment.
• Evolution is necessary: Take your results to the next level by continuously improving your strategies using data from past marketing campaigns.