Behavioral Segmentation: How to Apply It to Email Marketing

Nothing is more important than how your customers are behaving. 

Since consumer behavior is changing rapidly and usually in unexpected ways, you must get better at anticipating their next moves and responding quickly. 

That is where behavioral segmentation comes in. Behavioral segmentation doesn’t just give you incredible insights into your customers. 

It also helps you deliver the right message at the right time, increasing the chances of conversion. 

In this article, we’ll show you the nitty-gritty of behavioral segmentation and how you can easily get more data than what your customers are already producing. 

But first, let’s define behavioral segmentation. 

What Is Behavioral Segmentation?

Behavioral segmentation is a method of categorizing your customers based on how they interact with or use your product, brand, content, and offers. 

You can, for example, group your audience depending on their purchasing history, browsing habits, email interaction, product usage, or stage of the customer lifecycle. 

When you do this, you can customize your email messages to the customer’s needs, interests, and goals, which can increase your chances of converting them. 

Why Should You Apply Behavioral Segmentation to Email Marketing? 

In the past, marketers sent the same messages to every customer without personalizing them. This quantity-over-quality approach is the best way to kill your business. 

The reason is simple. According to a study, this type of email marketing only makes $0.04 in revenue per send, whereas personalized messages generate $0.95 in revenue per send. 

Key stats on behavioral segmentation in email marketing

Here are other fascinating statistics to show how crucial behavioral segmentation is in email marketing: 

• When you segment your email campaigns, you can increase your revenue by 760%. 
• There is an 18.8% higher chance that your customers will open your emails when you personalize them. 
• Last year, the top 20% of e-commerce retailers who used segmentation made up 80% of total sales.
• Businesses using two or more segments produced 17 times more revenue than e-commerce businesses using only one segment.

It’s tempting and easy to reach all your customers with the batch-and-blast approach, but this method just doesn’t work. 

If you think about it, it really doesn’t make sense either. Your consumers are humans and want to be treated as such, and behavioral segmentation understands that. 

This type of segmentation helps you craft your messages as personally as possible to build a long-lasting relationship. 

Also read: Top 7 Benefits of Email Marketing

4 Types of Behavioral Segmentation 

There are four types of behavioral segmentation that help construct a complete client profile during their purchasing journey. 

Each type provides actionable information that you can include in various marketing channels. This can help your customers follow through on their buying decisions.

Let’s go through each of them: 

1. Usage and purchase behavior

Usage and purchase behavior refer to how customers use a product and behave during the decision-making process. 

This type of behavioral segmentation is critical because it helps you enhance the buying process. It also helps businesses to understand: 

• How customers make their purchase decision; 
• How the purchasing process is challenging for customers;
• The role of the customer in the buying process; 
• The actions or behaviors that most and least likely lead to a purchase;
• Any barriers in the purchasing process that make it difficult for consumers to make a purchase.

There are four primary types of purchasing behavior:

• Complex. With this type of purchasing behavior, the decision is complex, so the customer has to deliberate on several factors before making a final decision. A good example is when a customer is deciding between buying a Nikon or Canon high-end DSLR camera. There are a lot of decisions that go into choosing one—it’s complex. 
• Habitual. This is when a customer doesn’t need to think much about which product to choose. It’s usually based on personal preference because the product doesn’t change much across brands. Take two popular potato chips, for example, Lay’s and Ruffles. You probably have your personal favorite. 
• Dissonance-reducing. When a customer makes a significant purchase choice, they may look for something that separates one product from another. For example, the customer may choose the cheaper option if two products have similar features. 
• Variety-seeking. Sometimes, customers may try a new product to see how it performs. For example, if they usually buy Adidas sneakers, they might try Nike shoes for a change. 

If you take your time to understand which group your customers fall into, it’ll help you craft better-personalized messages that produce results. 

2. Time-based and occasion-based 

This type of behavioral segment refers to when a customer makes a purchase (timing.) Based on when customers buy a product, you can divide them into three groups: 

• Buys during promotions. These are the customers who base their purchases on discounts and special deals. You can dramatically boost sales with little funds by using peak times to drive more traffic. 
• Seasonal purchases. These are the customers who buy products according to the season. For example, people buy beachwear in the summer, coats and sweaters in the winter, etc. 
• Occasion-based purchases. These customers buy products during events or occasions like Mother’s Day. 

Also read: The Best Time to Send Marketing Emails

3. Customer loyalty 

Segmentation based on loyalty measures how deep a customer’s loyalty is to your brand, using: 

• The number of purchases the customer has made; 
• Rewards program;
• The overall participation in your rewards program. 

These types of customers are like a treasure trove for your business because: 

• It’s less costly to keep them than to get new customers;
• They always buy your services or products; 
• Of all the customers, loyal customers offer the longest lifetime value. 

This type of behavioral segmentation allows you to zero in on current customers who keep coming back, their behavior patterns, needs, etc. 

Loyal customers can also help you with feedback, referrals, and word of mouth. Understanding what makes your customer loyal is the real secret to your business. 

So, you should know why your customers are committed to your brand. 

4. Benefits sought by customers 

Some customers choose a product or service based on the benefits they get. They also select the product based on the features or problems it solves for them. 

In other words, these customers place high value on peculiar benefits, which becomes the motivating factor for purchasing the product. 

So if you have numerous customers who want to buy the same product with different primary benefits, it would be a mistake to message them with the same benefit. 

This could result in a waste of time and budget, and let’s not forget losing important customers and revenue. 

Behavioral Segmentation Examples from Various Companies

Here are some great behavioral segmentation examples from various companies. 

Go through them and remember the previous points we’ve discussed because you’ll see them being used effectively: 

BabyCentre UK is a pregnancy and childcare resource that uses the Messenger app to give personalized advice and make recommendations. 

For example, the app suggests recipes for solid food and offers indicators to look out for when a parent selects weaning. 

This helps BabyCentre get actionable data that they can use to group users based on their selections. 

According to their research, Messenger came on top with an 84% read rate and a 53% click-through rate compared to email marketing. 

Overall, there was a 1,428% higher engagement rate. 

As you probably know, Guinness sponsors the Six Nations Rugby Cup, which usually has high sales on this occasion. 

However, with 6.1 million people actively choosing not to drink alcohol, they needed to change their marketing strategy. They aimed to attract those who didn’t want to drink while keeping existing ones. 

So, they introduced Guinness Clear right before the tournament, with appealing slogans like “Make it a night you’ll remember” and “Sometimes less is more,” implying that it’s just water. 

The advertisement piqued 21 million people’s interest. Loyal customers and event buyers inquired about the new offering.

This campaign used creative marketing to engage various groups, from loyal customers to occasional drinkers.

Netflix uses behavioral segmentation to offer personalized content to its subscribers each day automatically.

It uses machine learning to learn about clients’ behavior on the TV streaming app. 

Netflix then uses this data to categorize customers based on their actions, giving them a more tailored customer experience.

For example, if you use Netflix, the company knows which episodes you watched last month. 

Based on that information, it can determine your preferred genres and offer content for you to watch in the future.

To Sum Up 

If you want your email marketing campaign to succeed, you must understand your customers deeply. Thankfully, behavioral segmentation can help you with that. 

In this guide, we’ve talked about the behavioral segmentation definition, the four types of segmentation behavioral patterns, and good examples to follow. 

You can use this as your basis to understand how behavioral segmentation works.