Why behavioral segmentation matters more than demographics

Behavioral segmentation gets at the heart of what customers are doing, a pattern of past/current actions and a projection of future actions, versus who they are. Business plans have that section on who your target market is, and perhaps that’s why demographics are so ingrained in entrepreneurs. 

But behavioral segmentation is the better indicator of why your product or service is right for your target market, because it tells you what matters to your customers, and therefore what drives their purchases. 

How behavioral segmentation works

Traditional demographics groups your customers by age, location, gender, job position, family. These aren’t necessarily bad. They can work if you happen to have products for men and women, or, say, geo-targeted discounts. 

When you step beyond that to real engagement, you’d only be guessing if you use demographics. They give you vague signals on what your audience wants and needs, and what you can do to nudge them along the sales funnel. 

With behavioral data, you’d have a more accurate grasp on your customers. 

Behavioral segmentation groups your customers according to their actions (or lack of), which empowers you and your team to plan campaigns/outreach efforts and provide personalized experiences that lead to better engagement, conversions, and best of all, repeat customers. 

A few behavioral segments include buyer’s journey stage, purchase behavior, benefits sought, usage of your service/product, customer loyalty, among others. 

For example, you send completely different messages to a lead who keeps visiting your landing page (but hasn’t opted in yet), a lead who has visited your landing page for the first time and downloaded your ebook, and a customer who has bought your products four times already. 

If you treat the above repeat customer as if you didn’t know her, you can bet she’d stop buying (click here for more on that). 

Understanding your customers on a high level

Demographic data doesn’t get you far. On the other hand, insight on your customer’s values, interests, needs, and preferences through behavioral data can help you connect with them.  

This was what drove decades of market research, an entire industry dedicated to asking people what they want and why, and days, weeks, and even years documenting what customers do. Without these complex data points, most demographic data can be useless. 

From “target market,” we’ve graduated to “buyer personas,” and from buyer personas we now have “buyer intent” and “transaction history.” That sounds more invasive than it actually is, but today’s age of information and convenience leaves a trail marketers can utilize to understand their customers on the highest level. 

From a Marketing Week survey: 

  • “When asked to reflect on recent campaigns, behaviour emerges as the most effective method of segmentation, according to 91% of the marketers questioned.” 
  • “Nearly three quarters (73%) think behaviour has also become a more effective means of segmentation over the past five years.” 

Asking the right questions

A deeper understanding of your audience leads to more of the same. Behavior tracking helps you to ask the right questions, like adding “gift” buttons at checkout, or sending a more interactive and effective “survey” through offers and seeing which your customer would pick. 

Do your customers buy your items as gifts? Or maybe they like trying out the flavors you release? Or perhaps they simply don’t want to run out of your products? The answer would drastically change your personalized campaign messaging. Behavioral segmentation matters more than demographics in giving you insight for your marketing campaigns. 

Behavior is THE essential ingredient of customer data 

AI can now pack and analyze transaction data, first-party and third party data to form a reliable data set, combined with any demographic characteristics, for a complete picture of your customer’s needs and wants. 

Add today’s sophisticated analysis that can recognize opportunities for your business and you get to ask the right questions and send the right offers, with the double benefits of, 1. Delighting your customers with your personalization, and 2. Conversions and customer loyalty. This means you are at the heart of what your customers are doing, and why.

Sarah Cooper

You may also like
Revisiting Personas: Why they matter in the age of personalization
Blog

Revisiting Personas: Why they matter in the age of personalization

“Persona” is in “personalization.” That's obvious (and cheesy) I know, but most of us know by now that personas are...
Read More
Personally Identifiable Information (PII) 101
Blog

Personally Identifiable Information (PII) 101

Personally identifiable information, or PII, is self-explanatory and it’s nothing new. It hails from the age of mail-order catalogues and...
Read More
The rise of micro-moment: tiny moments, BIG impact
Blog

The rise of micro-moment: tiny moments, BIG impact

“Be quick, be there, be present.” That’s from Google, when they first coined “micro moments” in 2015. With the age...
Read More
Personalized marketing is omnichannel marketing
Blog

Personalized marketing is omnichannel marketing

Personalized marketing is omnichannel marketing. After all, your marketing strategy is not personalized at all if your customers have to...
Read More
The shift toward guarding customer data will boost influencer marketing
Blog

The shift toward guarding customer data will boost influencer marketing

The Cambridge Analytica scandal still makes people paranoid about Facebook, but marketers weren’t really surprised about it. We know how...
Read More
New tech makes account based marketing more achievable
Blog

New tech makes account based marketing more achievable

The marketing landscape is shifting in this new decade, thanks to marketers finally implementing martech (including AI) to adapt to customer demands and expectations. The same agility and intelligence we can utilize for hyper-personalization can be applied to account based marketing.
Read More
Customer Data 101—How to Collect and Use It in Lawful and Good Ways
Blog

Customer Data 101—How to Collect and Use It in Lawful and Good Ways

It’s projected that 2020 is the year marketers will finally stop being so scared that personalization is invasive, by making personalization impressive.
Read More
The marketing trend of the decade: insight-driven and customer-focused
Blog

The marketing trend of the decade: insight-driven and customer-focused

It’s hard or near impossible to plan for the future, especially with constant changes and updates to marketing innovation, but marketing leaders are always a good sounding board on giving insight and even predicting what would catch on sooner or later.
Read More
Is CRM finally ripe for disruption in 2020?
Blog

Is CRM finally ripe for disruption in 2020?

CRM can and should serve marketers on the challenge of attracting new prospects and keeping existing customers. The answer to that challenge is staying relevant and in step with customer preferences and expectations. 
Read More
Only relevant content is visible to your audience
Blog

Only relevant content is visible to your audience

Only relevant content is visible to your audience. We always talk about content marketing to attract audiences but it’s amazing how many businesses actually lose sight of the audience.
Read More
Align martech solutions with your marketing and engagement goals
Blog

Align martech solutions with your marketing and engagement goals

It’s going to be a long while before AI truly takes over from humans, if it ever will. The companies that use AI most effectively will be those that work with it, and allow it to take over processes that can and should be automated, freeing up employees to be more creative than ever, to connect dots they wouldn’t otherwise, and to be great translators of data.
Read More
The magic of dynamic content personalization
Blog

The magic of dynamic content personalization

Dynamic content and personalization together create a spark that can be super effective in firing up your marketing and sales goals.
Read More
The biggest lesson you need in business: product market fit
Blog

The biggest lesson you need in business: product market fit

Are people dying to get their hands on your service or product? How much is the demand for your product, and to what extent would you satisfy that demand?
Read More
Hyper-personalization: The fine line between impressive and invasive
Blog

Hyper-personalization: The fine line between impressive and invasive

People now expect hyper-personalization, but don’t want their privacy invaded. This is the privacy paradox.
Read More
The Future is Now—AI-generated content is here to stay
Blog Uncategorized

The Future is Now—AI-generated content is here to stay

Marketing standards and trends in 2016 or 2017 are no longer the done thing in 2019, and more changes will...
Read More
You have data tools, but do you have a data culture?
Blog

You have data tools, but do you have a data culture?

Data analytics tools are great and they’re getting better every year. Marketing continues to utilize and develop personalization through data-driven...
Read More
Artificial Intelligence Will Eliminate Jobs – and Create Them
Blog

Artificial Intelligence Will Eliminate Jobs – and Create Them

There’s a lot of fear around AI’s threat to disrupt a wide swath of jobs, and there seem to be a lot of good reasons why this will be the case. But there’s also no need to panic. Just as the Industrial Revolution disrupted countless jobs, a significant amount were also created.
Read More
How to Execute a Personalization Strategy
Blog

How to Execute a Personalization Strategy

There’s no official guidebook or roadmap for kicking off a personalization strategy at scale. Every organization is different, with varying...
Read More
What Does Artificial Intelligence Mean For Loyalty Marketing?
Blog

What Does Artificial Intelligence Mean For Loyalty Marketing?

Without hyperbole, the magic of artificial intelligence in marketing is its pattern recognition. And this ability to analyze and unpack behavior patterns empowers your loyalty marketing, which is by itself, already magic too.
Read More
Personalizing The Customer Experience In The Physical & Digital Worlds
Blog

Personalizing The Customer Experience In The Physical & Digital Worlds

The old version of demographic personalization “group-ized” rather than truly “personalized,” lumping people together and sending generalized content to each...
Read More
Previous Post
Next Post

LEAVE A REPLY