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Understanding the Relevance of Behavioral Segmentation

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Understanding the relevance of behavioral segmentation Correlation
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Due to product proliferation, today, consumers have a wide variety of products to choose from, making the purchasing process more complex. A brand must embrace behavioral market segmentation to stand out in the competition. 

Behavioral market segmentation highlights distinct phases in their ideal consumer’s purchasing process, such as what they want, why they want it, the advantages sought, and how they meet their needs. Leveraging behavioral segmentation can lead to an increase in retention and conversion rates.

In this blog, we will learn about behavioral segmentation strategy and how it benefits an organization.

What Is Behavioral Segmentation?

Behavioral segmentation is a type of market segmentation that classifies customers into groups based on average behavioral patterns. They may be at the same stage of their lifecycle, have previously purchased specific items, or have comparable reactions to your messages.

The ultimate focus of behavioral market segmentation is to assess the wants and expectations of customers to provide something unique depending on their behavior while buying a product or service.

Segmentation can be done through a market research survey based on the following criteria:

  • Their perception of your product, brand, or service
  • Their shopping habits, such as just purchasing on special occasions such as birthdays or holidays, and so on.
  • Their utilization of your product or service
  • Their general understanding of your organization and its goods. 

Let’s explore its characteristics in the next section to further understand its relevance.

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Characteristics of Behavioral Segmentation

Before conducting surveys to gather behavioral data, it’s important to understand the characteristics that make it a popular marketing strategy. 

Following are the characteristics of behavioral market segmentation:

  1. Enhances aiming precision
  2. Aids in the development of brand loyalty
  3. Cost-efficient and time-saving
  4. Helps in providing a better-personalized experience.

Let’s explore these characteristics in detail.

1. Enhances Aiming Precision

Behavioral segmentation enables businesses to leverage behavioral variances to tailor marketing communications. 

For example, it can assist in selecting the best strategy for returning or freshly enrolled customers. It also defines the categories of your audience, such as folks aged 18 to 30, those who enjoy streaming, or those who enjoy traveling.

2. Aids in the Development of Brand Loyalty

Behavioral segmentation aids in better understanding of customers throughout their shopping experience and keeps them motivated all the time. The ones who are satisfied with your hospitality are likely to become more loyal to your brand. 

3. Cost-Efficient and Time-Saving

Behavioral segmentation assists you in spending less time and money on the unwilling audience so you can target company resources at the valuable and interested audience.

4. Helps in Providing Better Personalized Experience

Deeply researching your audience and connecting with customer specifications, problems, and expectations may make a notable impact in providing a feeling of brand individuality and distinctiveness.

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Real World Use Case of Behavioral Segmentation

Starbucks is a multinational corporation that serves a vast clientele globally. The behavioral segmentation of Starbucks may appear peculiar to some; nonetheless, the corporation has been enjoying the benefits of this strategy for decades. 

The organization efficiently targets clients based on seasons, cultures, and tastes through market segmentation. Starbucks has effectively separated its brand from rival coffee chains by providing a good retail atmosphere and delicious coffee, emphasizing environmental activities, and profitably doing so.

 

Starbucks’ consumer-focused positioning allows the corporation to give the finest customer service possible. Aside from its consumers, Starbucks promotes its social responsibility by recruiting refugees and military families and providing career and educational possibilities to its staff.

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Why Is Behavioral Segmentation Superior to Demographic Segmentation?

Behavioral and demographic segmentation are both components of segmentation. Behavioral segmentation is based on consumer activities, whereas demographic segmentation is based on standard consumer data.

Both are important, but demographic segmentation is gradually losing its value. Marketers want quick approaches for all of their jobs as the market expands faster.

Now the question arises, which one to choose and why?

The answer to this question is truly dependent on the brand’s objectives.

A new brand may opt to start with a simple segmentation based on period or geographical region to see which demographic segmentation performs best. However, behavioral factors help expand companies that wish to understand their clients in depth.

Since we are discussing market segmentation, let’s clarify how different it is from customer segmentation.

Is Customer and Market Segmentation the Same?

Both customer and market segmentation are an effective strategy for guiding sales, marketing, and revenue intelligence operations, BUT these terms are not the same.

Market segmentation is the wider, elevated overview of all prospects throughout an entire market. Your target market is made up of present and future clients, and the procedure entails breaking this big population into generic categories based on shared criteria.

Customer segmentation, like market segmentation, entails monitoring data based on demographics, geographics, psychographics, and behavioral characteristics. However, the analysis further segments clients into multiple personas depending on what is known about them and previous experiences with your company.

Market segmentation, as opposed to client segmentation, is broader and encompasses the whole marketplace. Market segmentation refers to the market as a whole, whereas customer segmentation refers to your specific portion of the market.

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Conclusion

Behavioral segmentation is determined by the behaviors or activities of the client. It gives a better understanding of target consumers by providing a deeper picture of client behavior.

While customer activity data is more difficult to obtain, it is valuable. You can enhance your marketing approach by gathering accurate information on a customer’s behavior across all mediums and channels.

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