What is behavioural segmentation and why does it matter?

What is behavioural segmentation?

Behavioural segmentation is the process of grouping customers based on their previous interactions with your brand. 

You can group customers in your customer relationship management (CRM) system based on specific data, such as the products they buy, how often they purchase, what platforms they prefer to interact with you on and how they use your products or services. Then, you can use this information to serve them highly targeted content.

How can businesses use behavioural segmentation?

Personalise marketing

When you understand how (and where) customers interact with your brand, you can target them with personalised messages on their preferred platforms. You can send tailored ads and messages based on the products a customer has previously purchased or content relevant to the pages they’ve visited on your website. 

Assess engagement

Knowing where your customers are most engaged can help you optimise your marketing efforts and focus on your best-performing channels. For example, you can create a segment of your most engaged users (those that regularly open emails or spend a lot of time on your website) and allocate more resources toward upselling to them, versus other customers who engage less with your brand. 

Foster brand loyalty

Using behavioural data to deliver tailored messages increases the accuracy of your targeting. This means you can proactively attend to customers as they move through the customer journey by sharing the right content at the right time. 

Customers are more likely to purchase from you again if they connect with your brand and feel you appreciate them and understand their needs. 

Improve budgeting and forecasting

Behavioural data provides insight into how your customers spend money. It shows you how they find you, what their journey to purchase looks like and their purchasing cadence. 

Look for patterns that can help you plan your strategy. For example, you may find that customers need an average of 6 interactions with your brand before they make a purchase. That information could help you with revenue forecasting, as well as establish the regularity of your customer engagement. 

The main types of behavioural segmentation

Purchase and usage behaviour

Segmenting customers based on their purchase and usage behaviour involves grouping customers who have similar buying habits or a similar journey to purchase. For example, you can group customers that rely on search engine research to find the right product, versus others who discover your brand on social media.

You might segment customers based on: 

• which platforms they use to interact with your brand before they buy

• what queries they searched for on Google to find your brand or product

• what questions they asked your support team before they bought

• whether they only interact or buy from you when there’s a discount on offer. 

Preferred benefits

Customers aren’t just looking to buy a product — they’re looking to buy the benefits that the product brings. For each customer, that desired benefit might be something different. For example, someone purchasing a cordless vacuum might be looking for one that can clean their entire house on one charge, while another might be looking for a vacuum that’s powerful enough to remove dog fur from upholstery. 

Segmenting customers based on their motivations helps you deliver content that’s relevant to their unique use case. 

Timing or occasion

Occasion-based purchasing refers to purchases at a specific time of year, or on a day or event, such as the holiday shopping season or an anniversary. 

Segmenting customers based on the occasion that encouraged them to purchase can help you understand their interests and purchasing potential. For example, someone who regularly buys from you in December is probably going to react positively to getting a marketing reminder in the lead-up to the holiday season. 

Funnel stage

Segmenting customers based on the stage they’re at in the sales funnel helps you deliver the right information when customers need it the most. Someone in the awareness stage who’s just found out about your brand is going to need different information than someone who’s been a loyal customer for years. 

There are 5 key stages in the sales funnel you can use to inspire your behavioural segmentation:

• awareness (when a consumer has just found your brand)

• consideration (when they’re weighing up their options)

• purchase (when they decide to purchase)

• retention (when they come back to purchase again)

• advocacy (when a loyal customer recommends you to others). 

Engagement

There are 3 core levels of customer engagement: 

• occasional - customers interact with your brand every now and again, but not regularly 

• regular - customers often interact with your brand, buy your products and engage with you on different channels, but there’s an opportunity to increase engagement

• intensive - customers consistently buy your products and services. 

Grouping customers based on their level of engagement with your brand will help you understand what makes each segment behave the way it does. 

Satisfaction and loyalty

Loyalty-based segmentation is a popular tactic for marketing to repeat customers. Not only does it help you deliver added value to your best customers, but it can provide useful insights into what characteristics your most loyal buyers share. 

You can also group customers that have provided 5-star feedback or referred a friend to your brand. 

Usage

Segmenting customers by their product usage is a great way to identify who’s buying what from you and when. With this information, you may be able to anticipate future purchases and provide the right content at the right time to get the sale.

Interests

The more you interact with your customers, the more information you can gather about their likes, dislikes, preferences and interests. You can use this information to serve personalised marketing materials, including product recommendations and relevant content. 

Segmenting customers based on their interests increases engagement levels and helps you learn more about what customers want and need from you. 

Use your CRM for behavioural segmentation

As your business grows and scales, the benefits of CRM software and the value of behavioural segmentation become increasingly clear. However, when your CRM is integrated into your broader business management platform, you can get even better results for your business.

MYOB is a business management platform that addresses the six core workflows that any business may need to handle: customers, suppliers, projects, employees, finance, accounting and tax. Cloud-based, you only pay for the software you need, but can add on capabilities across all workflows as your business matures and your needs become more complex. 

Try MYOB’s Tall Emu CRM, FREE for 14 days. Or choose from a range of third-party integrations to get the tech stack that’s right for you. At MYOB, we have you covered.

Disclaimer: Information provided in this article is of a general nature and does not consider your personal situation. It does not constitute legal, financial, or other professional advice and should not be relied upon as a statement of law, policy or advice. You should consider whether this information is appropriate to your needs and, if necessary, seek independent advice. This information is only accurate at the time of publication. Although every effort has been made to verify the accuracy of the information contained on this webpage, MYOB disclaims, to the extent permitted by law, all liability for the information contained on this webpage or any loss or damage suffered by any person directly or indirectly through relying on this information.