Gainsight Glossary

Behavioral Segmentation

What is behavioral segmentation?

Behavioral segmentation groups your customers based on traits that describe what customers do so your business can tailor the strategy it uses to deliver the services they want and value.

If you are looking to refine and streamline how you deliver for your customers, you first need to understand them and why they make the decisions that they do. Behavioral segmentation, a form of market segmentation, is part of that process.

Like most forms of marketing, behavioral segmentation cannot be done alone. The results should ideally be joined together with demographic, geographic and psychological segmentation, among others, to build a comprehensive understanding of your customers. In turn, this data can be used by your company to balance workload, prioritize customers and maximize profitability.

Why is behavioral segmentation important?

Armed with segmentation information, companies can provide a more targeted and personal experience for the customers instead of offering a one-size-fits-all or generic interaction.

Instead, businesses can generate content and curate experiences that are tailored toward each group’s needs, wants and behaviors. In turn, companies can focus their budget, such as marketing materials, advertisements, and feature design and development, toward those users that are more engaged and valuable or that would benefit from a more personalized experience. This can result in customers feeling more connected with your brand and more loyal in the long run.

Additionally, once those segments that are less likely to convert into customers are filtered out or deprioritized, companies can refine their metrics collection so data isn’t skewed by results from cold leads or inconsistent users.

How can I be more successful using behavioral segmentation?

As the adage goes, “Marketing is about sending the right content to the right audience at the right time.” Developing buyer personas based on the behavioral and other segments can help to increase the probability of conversion and help to make sense of an otherwise diverse potential customer base.

While every company is different, the following are some of the more common types of behavior segments that can be used:

  • Purchasing Behavior: Does a customer seek variety or the biggest deal? Is each move heavily researched or are they more of an impulsive buyer?
  • Value/Benefit Sought: What are the criteria or outputs that a customer is seeking as they make a decision on which service to utilize? How important are those features to the customer when compared to other factors such as cost?
  • Usage Behavior: At what frequency do they utilize your product or service? Are they only participating in a free trial or are they premium subscribers?
  • Time-based Usage: What are the triggers that cause customers to utilize your services? Is a customer using your SaaS service on a daily basis, only for the occasional special event or as a backup option for the rare outage?
  • Journey Map Stage: Where is the customer in their buying process? If it is an existing customer, how much of an advocate are they for your brand? If the buyer is in the consideration stage, what materials does the customer need to learn more?

To help take your marketing performance to the next level, take advantage of the built-in features found within customer experience software, which include, tools that can help to automate and collect usage data, segment customers, track metrics, personalize communications, perform analytics and create customer surveys. This software can also help with creating and maintaining journey maps, generating reports, monitoring trends, and developing forecasts and projections.

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