When behavioral segmentation is done correctly, it has the power to help you achieve your business goals. Whether you’re trying to increase revenue or decrease customer churn rates, behavioral segmentation will help you achieve it by providing insight into who your customers are and what they want. You can then tailor marketing strategies based on these insights to create a better experience for each of them.

This article will discuss behavioral segmentation in-depth so that you understand how it works and how it can benefit your company!

What is behavioral segmentation?

With the current generation of “big data,” behavioral segmentation is a very valuable tool businesses can use to achieve their goals. By creating segments based on your customer’s behavior, you’ll be able to more effectively market and sell products or services those specific customers are interested in. To give you the gist of what behavioral segmentation is, let’s look at an example.

If you’re selling a product to customers in two different behavioral segments, A and B, the company might want to tailor its marketing messages differently for each group of people. They may decide that customer A would respond better to emails with discounts or promotional offers, while customers in behavioral segment B are more likely to click on banner ads about new products they can purchase online.

All this data comes from analyzing your behavior – what pages did you visit? What links did you choose? How long were you on our site before leaving etc.? Behavioral segmentation uses these actions along with other KPIs (Key Performance Indicators) such as geography or social media presence/engagement history to create behavioral segments.

How behavioral segmentation works

When developing behavioral segments for marketing purposes, it’s important to focus on people’s actions instead of demographics such as age, sex, occupation, etc.

For example, suppose we wanted to develop an effective campaign targeting teenagers that enjoy music. In that case, we’d want our behavioral segment to include all of those who listen actively (streaming songs), buy music-related merchandise like band t-shirts and posters, and also purchase tickets to concerts. We wouldn’t necessarily care about their age or sex.

The four different types of segments

Behavioral segmentation has four different types of segments and such include:

Informational

The first, informational segmentation, is used to accumulate information about your customer’s behavior. It helps you better understand how the customers interact with the company and its products or services. The informational segments are also helpful when trying to create behavioral profiles for marketing campaigns.

Informational behavioral segmentation works because it gives companies insight into their target audience and which actions they’re more likely to perform in the future based on historical data patterns from previous transactions.

Decision-making

The next behavioral segmentation type is behavioral decision-making segmentation. This behavioral profile can be used to determine whether your customers are buyers or not and what specific products they’re more likely to choose at a given time.

Decision-making behavioral segments are created based on the preferences determined by previous transactions that have already been completed with the company.

Transactional

Transactional segmentation can be used to determine if customers are likely going to make a purchase within the next few hours or days. Companies look at how people interact with their products and services after making past transactions to create transactional behavioral segments.

This behavioral segmentation type is useful because it helps sales teams focus on closing deals that would otherwise have been lost due to timing issues – such as discounts ending soon.

Competitive

The last, and most important behavioral segmentation type, is competitive behavioral segmentation. This behavioral profile will help you determine your competitors’ customers and what products or services they’re likely to buy from them in the future.

The main reason companies use this behavioral profiling technique is because it helps them understand which of their competitor’s products are likely going to be popular so that they can stay one step ahead with a better product offering.

How to apply this type of segmentation in your business

Applying behavioral segmentation to your business won’t be too challenging as long as you’re familiar with behavioral profiling and have access to the right data.

In order to get started, simply go over your customer database and find out how each individual has purchased from you in the past – including their average cart value per transaction, shipping information, etc.

Once this extensive search is complete, it’s time to combine all of these informational bits into specific segments that can be used for any purpose necessary going forward.

It is important to remember that behavioral segmentation is not just about creating specific behavioral profiles for marketing purposes. You should also be using this behavioral profiling technique when making business decisions, such as acquiring new customers or laying off employees.

When you’re trying to acquire new clients and grow your company, it’s important to understand who the ideal target audience would be in order to develop a more effective campaign strategy targeting them specifically because of their online behavior.

However, suppose one of your current clients has been inactive for quite some time now. In that case, there are good chances they won’t ever come back, which means that you need to find someone else with similar interests but an active behavioral profile so that they will make purchases from you again soon enough. For example, if someone has recently purchased a specific product from you, then they might be interested in buying it again soon.