Behavioral segmentation is a harder nut to crack than the other segmentation categories, especially demographics and geography, but the work is worth the reward. After all, understanding why someone chooses to buy your products or services is the holy grail of marketing research.
When you segment your audience by their behavior, your efforts will allow you to:
- Develop key insights into what motivates consumers to buy from you
- Identify your most loyal users and learn how you can keep them happy
- Figure out when certain groups of consumers buy so you can reach them at the right time
- Send the right message to the right consumer depending on where they are in the buying process
- Spend your marketing budget more wisely on consumers who aren’t ready to buy, who have low loyalty, and who won’t be heavy users of your products and services
This is all another way of saying that behavioral segmentation lets you tailor your marketing. It allows you to take advantage of the existing buying behaviors of your key customers. You’ll be able to speak the right language at the right time to the right person. Every marketing dollar will stretch a little further and give you greater returns.
Benefits of Data-Driven Market Segmentation
The first and foremost use of market segmentation is to develop clarity. After mining and cleansing your data, all you have is the most accurate and relevant information about the customers. Once you have the data ready, you can use this information to put the customers, who share particular business-relevant attributes, together in a group.
The primary objective of segmentation is to remove the unimportant clutter of information and keep what is useful and actionable on your desk.
Develops Consumer Insights
If “Know thy customers” has always been an oft-quoted mantra in marketing, it has become even more loaded with meanings in the digital era. Today, your customers are just a click away, expecting you to frequently pat them on their backs.
With clearly defined customer segmentation and contact profiling, you can know who your customers are, where they are, and what they need better.
Improves Customer Engagement & Brand Loyalty
Customer engagement is one of the most important strategies to identify and, sometimes, even to influence the customers’ needs and interests. Customer behavior data collected from the social network sites, mass media, discussion platforms and purchasing history helps businesses to develop a psychographic segmentation of the customers and target marketing and ad campaigns to address their needs.
Engaging customers with communications and motivational offers has proved to be the most effective way of improving brand loyalty and customer retention in the age of e-business.
Streamlines Mass Customization
Mass customization is a process of providing specially tailored products or services to fit the specific needs of a large number of customers in the specific segments. The growing amount of clickstream and customer behavior data has helped businesses to apply more accurate customer segmentation, which has made the practice of mass customization more effective.
Mass customization significantly improves the level of customer satisfaction by helping your company to offer value-added and custom-tailored services to a large segment of customers.
Optimizes Cost-efficiency & Resource Management
Market segmentation is an important tool for developing business intelligence and maintaining a competitive advantage. It gives a deeper insight into the market and helps business firms to identify the segments of customers with greater profits and allows them to carry out more targeted micromarketing.
All the top-notch companies make the best use of their data to implement precisely defined market segmentation in their marketing and service delivery.
Grows Niches Marketing Capabilities
Data plays a mission-critical role in discovering the hidden dynamics of the market and in developing newer insights and marketing strategies. Using the market/customer data to systematically segment the market can help your business to discover the potential niche markets where you can maintain your lead and domination with a rapid customer conversion and market expansion.
The bowling pin strategy applied in niche marketing has helped many online businesses to grow rapidly. You can take Amazon as an example.
Promotes the Application of Business Data
These days, all businesses, regardless of their size and scale, generate business data and have access to data across the industries. Companies today have the advantage of using both the a priori and post hoc methods in market segmentation. Moreover, you can also use data visualization and cluster analysis techniques to improve the process of customer segmentation.
Enhances Reliable Assessment
Segmentation of the big market of customers into the small chunks not only makes customer service and marketing efforts more manageable, but it also makes it easier for you to measure the success of the segment-specific projects, policies, and strategies measurable.
The growing access to multi-platform real-time data has helped businesses to study and assess their market penetration and performance and reorient their marketing policies or re-segment the targeted customers.
It would be misleading to presume that customers who fall into a group or subgroup of segmentation stay there forever. In this digital era, customers are bombarded with information, which continuously influences their preferences and priorities, increasing their mobility across the segments.
Data-driven market segmentation heavily relies on the accuracy of the customer profiles with the new information on a regular basis. It helps your business to deal with your customers with up-to-date information.
Keeps Focused & Goal-oriented
The whole purpose of market segmentation is to know the customers better and to cater to their needs in an effective manner. Data provides the very precise and accurate customer insights and helps you to stay focus and targeted.