What is behavioral segmentation (and how does it work)?

Behavioral segmentation. It’s a phrase that comes up a lot in marketing these days. But how exactly does it work? How exactly can marketers segment customers based on behavior? What does that look like? And, importantly, does it really improve marketing results?

To answer those questions, let’s imagine that I run a super popular website that sells wool scarves. I have an email newsletter that delivers product updates and coupons to my users. And I run paid media to remind people about my scarves and drive new traffic to my site.

Before we explore how Lytics pre-built segments based on behavior and other demographics can help my business, let’s talk a little about behavioral segments and why they matter in general…

Why you should build behavioral segments

Without behavioral data, your marketing audiences and segments are likely built on demographic data and market research. While this can be a great starting point to build initial user personas or to test market entry, you’ll likely be waiting on the next industry report or survey to adjust your understanding of the customer.

Collecting and unifying customer and user behavioral data allows marketers to build a growing, continuous understanding of how customers interact with the marketer’s brand experience. Marketers can visualize customer interest and get a better sense of actual customer behaviors and intent and use these to inform channel and content planning based on actual user data.

These are steps towards building true marketing personalization and not just continuing to use generalizations based on age, gender, and location.

Not to mention that research shows behavior is 20 times more predictive than demographics.

The more campaigns and programs are run, the better these segments become, and marketers gain a continuously increasing understanding of their customers and users.

Trends and insights that come from unified behavioral data can show your most engaged users so you can see who is most likely to convert or purchase or even who shows signs of having a high customer lifetime value. A Customer Data Platform like Lytics can help you take behavior-based segmentation and act on it within your existing tech stack.

Behavioral market segmentation examples

So, let’s apply a few segments to some marketing tactics that I could use with my example scarf business.

Re-engaging dormant users

I can combine user interactions from my website, shopping experience, mobile app, email, and advertising to identify customers who are sluggish to purchase or haven’t visited lately. Using Lytics, I can export my segment of dormant users and email them an incentive to return or run a retargeting campaign to remind them about my awesome scarves.

Retargeting previous visitors by interest

Unifying customer and user data allows me to identify new and returning visitors. I can create customer segments based on their known interests and content topics they enjoy (pages they view most, blog posts they read, etc.).

For instance, I can build a segment for customers who clearly appreciate my more expensive inventory, where I can retarget them via paid media to view an exclusive scarf lookbook or show them a special offer on my premium goods.

For my customers who enjoy more affordable looks, I can build the proper segments and export them to my mobile app or ad networks to target them with incentives to get them to visit and make their first purchase.

Personalizing emails and push notifications to attract high-value customers

Of my known customers (customers whom I can identify by name or email), I can build segments based on behaviors (targeting those who spend an ungodly amount of money on scarves every month). Not only can I segment by the amount of money they spend but also by other specific behaviors and topic affinities that allow me to understand how my best customers prefer to be treated.

With a push of a button, I’ll sync this segment of high-dollar scarf lovers and send them an incentivized email to purchase more scarves or tell other people about my business. I can do this same thing in my mobile app through rich push notifications.

Suppressing ads for users unlikely to engage

Raise your hand if you love wasting your advertising dollars on people who don’t care or, worse, robots browsing your site without buying power.

No one is raising their hands? Yeah, thought so.

By building advertising and retargeting segments that exclude low-value users/users unlikely to convert, I can export them to Facebook or the Google Display Network to only target users who want to hear about my scarves and are likely to make a purchase.

Ready to give behavioral segments a try?

Lytics allows any marketer to access the means to unify cross-channel marketing data to build behavior-based market segments that wouldn’t be accessible with execution tools alone. It’s the next step beyond demographic-based segmentation that allows marketers to take steps closer to true personalized marketing.

We’ve seen clients improve their mobile ad and app campaign performance by 80% or more. We use these segments ourselves and see retargeting savings as high as 300% while serving content to returning visitors based on their known interests and interactions.

The best way to see this in action is through a demo. We’re always available to show any marketing team how they can improve their ROI and engage customers like never before.

And if you’re not quite ready for a demo yet? Check out our CDP Buyers’ Guide to get savvy before you start researching CDP options.