Suppose your company plans to launch a new shampoo in the market. Everyone knows what shampoo is. It is an effective hair cleanser that removes accumulated grease, dirt, and unpleasant odors from the scalp and hair.
But things are not as straightforward as they seem. All customers who purchase shampoo aren’t picking up a bottle for the same reason.
Some may want a shampoo specific to their hair type; others want a volumizing product or one that’s meant for colored hair, daily use, organic ingredients. Customers look for clarifying shampoos to get their hair shiny and silky or a product that restores pH lost due to excessive use of chemicals.
They may require damage repair or to prevent hair loss, paraben-free shampoos, moisturizing shampoos, frizz control shampoo, shampoo for straight hair, or medicated products for dandruff control and sensitive scalp.
Additionally, you also need to cater to the price-conscious buyer or those who need smaller containers for travel or super-sized products for salons.
This example tells you that consumers may seem similar in terms of age, social status, geographical location, habits, values, emotional triggers, purchasing ability, etc., but they may differ widely in terms of the attributes they value in a product.
It’s interesting to observe that even a staple culinary product such as salt or sugar has its own highly differentiated uses and consumers.
If your marketing campaign fails to address this aspect, it could fall flat on its face, and you’d end up with no takers for a perfectly good product.
This is where a key marketing concept comes in – Behavioral Segmentation. It makes all the difference to how customers are viewed, approached, persuaded to buy your product, and finally become loyal to it.
What is behavioral segmentation?
How your target customer connects with your company and your product has been the subject of intense study by marketing theorists and practitioners.
Market segmentation is the process of breaking down a vast market into more comparable, consistent sections or segments. These divisions are based on perceived differences in geography, demographic/psychographic, and behavioral attributes. Each segment so created represents a section of the whole market that shares certain characteristics.
Targeting specific markets has been in place since the late 19th century when commerce was ruled by small regional producers who sold their products to local customers. Gradually this fragmentation coalesced into mass marketing, aided by enhanced transportation, standardization of goods, and better communication.
In the 1920s, segmentation became a phenomenon as marketers began to target specific customers based on psychological factors such as attitude, lifestyle, interests, opinions, etc. Aided by the amazing amount of data available in the modern era, hyper-segmentation has enabled marketers to target smaller groups or even individuals.
Behavioral segmentation aims to combine many of these insights gleaned over decades to ensure that the message reaches the right customer at the right time and location. It helps the marketer to understand more about the customer in terms of needs and wants.
When a large and heterogeneous market has been accurately divided into smaller and more manageable segments, it creates more personal connections with some shared differentiates.
Behavioral segmentation also promises to create marketing campaigns that are leaner, tighter, and much more effective in zeroing in on the exact consumer that the product is intended for. This can save time, resources, and money that might have been wasted in more generalized and broad-based campaigns.
With the biggest brands retailing online today, behavioral segmentation has become even more streamlined as there is access to zillions of megabytes of data. Your marketing campaign gathers momentum and depth as it gathers information about preferences, behavior, interests, dislikes, and the acceptance and rejection of certain messages.
Why behavioral segmentation is so effective
One of the prime examples in the digital era is Facebook. This is a platform where people share opinions, thoughts, attitudes and provide information about their behavior, likes and dislikes, personal life, etc. It offers amazingly fertile ground for market research and marketing campaigns.
Apart from ads that can target a particular Facebook user, it also offers the opportunity to connect friends, family, co-workers, etc. in terms of influence.
Behavioral segmentation as a marketing device is highly dependent on technology, which is so ubiquitous today across the globe.
It has several benefits:
Archetypes and Models: Behavioral segmentation helps identify certain common factors such as patterns of behavior and thought and create a hypothetical model of such a group of customers or an individual customer. This enables your campaign to offer a more personalized message that reaches your customer and shepherds him/her on a seamless purchasing journey.
Itemise and Prioritise: With the help of behavioral segmentation data, you can itemize your marketing campaign elements for specific markets. With this list in place, you can further sift out the higher-value customers, prioritize them, and ensure that you allocate the right amount of time, resources, and money to different market segments. It also allows you to create niche markets.
Dynamic: An important aspect of behavioral segmentation is recognizing that consumer behavior is a highly dynamic and changing element. With regular inputs from behavioral segmentation studies, you can assess and re-assess your marketing campaign, tailor it to your target consumer’s changing needs, and ensure that you follow them as they grow, evolve, and transform according to their shifting requirements preferences, and budget.
Remarketing and Upselling: Behavioral segmentation uncovers specific consumer behaviors. This helps create campaigns that offer information on exactly what the consumer purchased previously, tips on related products, data on popular purchases, etc.
Audience Pool: Marketers armed with behavioral segmentation data can create a stable and reliable audience pool that combines interests, demographic details, socio-economic status, etc. This can be used to test new products and to test the effectiveness of existing campaigns.
Expand the Consumer Base: With more finessed behavioral segmentation data, you can uncover whole new territories and consumers’ pools. This is possible when you present related products, buying suggestions, social media influence, etc. You can further divide your campaign into consumers who prefer video ads or print ads and save money by avoiding markets that would not be friendly to your products.
Returning to the shampoo example, behavioral segmentation allows you to reach a customer who is vegan, against animal testing, prefers non-fragrance products, doesn’t worry about high prices, is in their 40s, doesn’t color her/his hair, or share a bottle of shampoo with the entire family!