Have you ever dreamed of delivering just the right message, at the right moment, to the right user? Find that perfect moment to target your customers when they’re more likely to click on the purchase button? I haven’t found a magic tool to read minds, but I wanna talk to you about something that’s close enough.
Behavioural segmentation has been, for a while now, in all the marketing talks out there. So you’re probably asking: what’s this all about?
In simple words, behavioural segmentation divides a population (or an audience) based on their behaviour: the way the customers respond to, use or know of a product. It’s an analytics process that relies on simple math.
Statistics show that there are several factors that a consumer takes into consideration before taking a decision. Thus, consumer decision making is influenced by behavioural patterns and that is exactly how we, as marketers, are able to send tailored messages.Some behaviours that marketers look at closely when segmenting customers include:
- readiness to purchase;
- loyalty level;
- the frequency of interactions with your brand;
- and benefits sought.
Pain points that can be optimised via behavioural segmentation
Understanding purchasing habits (both universally and within a given niche), usage habits and spending habits (time, money, and other resources) is of utmost importance for us marketers. This leads to better marketing decisions, more effective A/B tests, more successful advertising/marketing campaigns.
There are four areas where behaviour segmentation can help you achieve your KPIs and grow your business:
- By reducing cart abandonment;
- By initiating a long-lasting communication with customers;
- By hooking indecisive prospects;
- By increasing average order value.
How to start with behavioural segmentation
Segmentation helps you create online profiles of consumers and target them with offers that convert. You can look at:
- session behaviour (page views, site search keywords, the content he reads by topic or theme)
- browsing history (visited pages, searched information)
- purchase history (is he a new visitor, has he bought before, the amount spent last time he visited the site and on what type of products)
- data entries in forms
- data from surveys
- device (mobile, tablet, is he an Android or an iPhone user, a Mac or Windows user)
- location (based on IP): country, city.
After you gather all the insights on how users interact with your site, and more importantly, what makes them convert and where the experience can be improved, you can start creating various segments. Different marketing messages or personalized offers for each category should be one of the first steps.
The “after-collecting-data phase” is at least as important as the “collecting-data phase”. Implementing smart marketing strategies based on this data is the key.
After a user segmentation process based on device type, the online travel agency Orbitz started driving Mac computer users towards more expensive hotels. This bold strategy was based on the website’s traffic analysis, which indicated that Mac customers spent up to 30 percent more on travel than Windows users.
This simple tactic may seem like a disturbing digital move, but it shows just how much potential customer segmentation has when done right.
To gather quantitative data, there are multiple tracking and analytics tools like Google Analytics or Facebook Insights that you can use for free. If you’re looking for more qualitative information, customer interviews are a better choice. This one allows you to dig deeper into your customers’ needs and purchasing behaviour when you’re in front of them or on the phone. Don’t be afraid to try it: people open up to other people. Using customer interviews, you can figure out how they use your products and discover key phrases and words you can use in your marketing efforts. More on creating a successful customer interview and qualitative research can be found here.
Behaviour segmentation leads to better customer behaviour predictions
The point of all this is that, in the end, what really matters to us is to predict customer behaviour. Just think about it. Some of your customers might make small purchases every week, others might make big purchases once a year — and there are all sorts of combinations in between. How can you possibly predict how much your next customer will actually contribute to your business?
By measuring Customer Lifetime Value (CLV).
This is how you’ll be able to understand how often certain types of customers will make purchases and when those same customers will stop making purchases at all. The foundational elements of analysing customer value are:
- Recency (refers to the last time a customer made a purchase)
- Frequency (refers to how many times a customer has made a purchase within a given time frame)
- and Monetary Value (refers to the amount of money a customer has spent within that same time frame)
Or what we marketers call RFM Segmentation.
RFM is a technique for organizing your customers from the least valuable to most valuable by taking into account the above factors.
By segmenting your customers with RFM, you’ll be able to analyze each group individually and determine which set of customers has the highest CLV. With this in mind, you will be able to track customer spending patterns, then use that data to predict their preferences and future purchasing behaviour.
It’s important to calculate your RFM scores by channel and integrate the scoring into your shopping cart abandonment strategy. More on this topic here.
How to personalize the customer journey after you segment them
There are several ways you can create personalized experiences for your customers based on behavioural segmentation. But no matter how you decide to segment your audience, personalized marketing messages and custom-tailored actions for each visitor, based on their previous viewing & purchasing behaviour, are the key.
- Show different websites in real time based on behavioural segmentation
Define your user segments using the criteria that matter most to your business (geographic location, new visitors vs repeat visitors, user interest and personality, shopping habits, referral source etc.) and change your website for each segment.
This way, you can customize the user experience in your store almost any way you want: if a user has visited your store before, rather than simply showing best-selling products on your homepage, you can feature products that the user has viewed during their previous session.
If a user has made recent purchases, reward him by offering a discount. If he reaches you via a Facebook or Adwords campaign, show him/redirect him to a different landing page specific to that marketing campaign. It’s hard to predict the impact you’ll notice on your conversion rate as this varies from business to business, but what I can tell you is that 74% of online customers get frustrated by seeing content that doesn’t match their interests. Start small and optimize your strategy as you go.
- Personalize your e-mail marketing communication
30% of eCommerce repeat purchases come from email marketing and personalized emails deliver six times higher transaction rates. In this context, I find it critical to make the most of the channel while the lead is still there.
Besides, email retargeting tools help you implement automated communication with a high level of personalization. For example, when a visitor adds a product to their cart but doesn’t complete the purchase, send them an email recommending complementary products. There are so many reasons users abandon their shopping carts that there’s definitely enough space for experiments there.
- Create effective promotions
Studies show that recommended products get 73% more clicks than products that marketers chose to be included in Facebook ads, newsletters, advertising campaigns etc. Keep an eye on all the data you collect and deliver the right offer, to the right audience segment.
Find the products or categories consumers like, browse and shop from your website to create personalized offers for individuals and segments with similar behaviour.
Correlate this data with a timing-based behavioural segmentation for better results. This means identifying moments when a customer is more likely to engage with a brand or be more receptive to offers.
- Implement various site navigation flows
Even small changes to your website (like changing the copy on a call to action button, increasing/decreasing the size or colour of a purchase button, making a contact form more visible, etc.) can have a big impact on how users behave. Think about strategies to convert each segment of your audience.
Behavioural segmentation is a marketing process that every marketer needs to master. It’s something that our users ask for: 96% consumers expect the retailers to personalize their feed and inform them about new products of their liking.
And if you want outstanding results, make sure you follow-up each customer behaviour segmentation process with the recommended marketing tactics that will lead you to better advertising campaigns, better targeting and, ultimately, more sales.