Product Manager, Reteno
August 30, 2022
Remember the last time you saw an ad and thought, “Hey, this is exactly what I need”? That was the result of effective customer segmentation in marketing.
Companies constantly search for more ways to promote their products. That’s why they hire marketers to analyze user behavior, build patterns, and optimize advertising campaigns to match them with a personalized message.
Read on to learn more about behavioral segmentation and how it can boost your mobile marketing. Examples included!
What is behavioral segmentation? It is the process of grouping customers into segments based on their behavior patterns. These patterns may include buying habits, needs, or expected benefits.
Understanding the reasons behind each action helps marketers personalize their campaigns, increasing the probability of making a new sale. It’s important to know the four types of behavioral segmentation to leverage their enefits.
Segmenting customers according to the frequency of their purchases or interactions is one of the ways to calculate LTV and build predictions.
You can classify users into four categories:
Imagine a student who uses a ride-sharing app to commute to their university from Monday to Friday. They don’t need the app on weekends because they aren’t in a hurry and can walk to their destination.
Seeing this pattern, the ride-sharing service could target the student with discounts on weekends. This would incline the client to use the service even though they didn’t plan to.
The data can also help you detect sleeping customers to target them with a re-engagement campaign. This would cost you five times less than attracting new clients.
Targeting a client when they’re in a certain emotional state can help you sell more or even convert them into a loyal customer. Finding the right moment is the biggest challenge.
Occasions could include personal events like birthdays or anniversaries. It could also be a seasonal event, like going on vacation. In some cases, this may cover a life milestone purchase like a wedding ring or a house.
It is a good option for determining the best time for providing discounts, special offers, and promotions.
For example, Starbucks analyzes the behavior of their regular morning customers to offer happy hour events with discounted coffee via a push notification. This increases the probability that the client will come for another coffee during the day.
Customers always look for a product that suits their needs best. Understanding the expected benefits helps you deliver a more sensitive message to improve lead generation and customer retention.
Imagine a mobile phone user. Depending on their expectations from the device, we can create three categories:
Work-oriented clients search for cheap but durable phones, social ones need user-friendly devices with the latest tech, and status-oriented people want to get an expensive & stylish product.
Understanding customer needs helps you determine the right sales message. New clients will fall in love with your personalized branding, while current buyers will become even more loyal.
This is where you determine the most active customers, who always buy your products first and are eager to spread the word. The best way to promote customer loyalty is by incorporating a reward program.
Some examples of how a reward program may work are:
Your creativity is the only limit. Just make sure to show loyal clients how valuable they are to your brand.
Huge companies like Nike use the best practices of behavioral segmentation to improve their marketing by personalizing advertising for each separate category. This helps them attract more clients and grow profits. Also, 33% of US marketers mentioned spending 50%+ of their marketing budget on personalization, proving that it is a must. Find out more about the benefits below.
Segmenting your customers helps you learn all about their habits, needs, and expectations. This knowledge leads to correct decisions. You will be able to choose the right channels for personalized messaging.
88% of US marketers stated that they’ve noticed great improvements after applying personalization. That’s one of the advantages to consider.
Dividing existing and potential customers helps you improve the cost-effectiveness of your marketing. You can’t always use the same strategies on both types. Having a clear segmentation will make each message more powerful, bringing better results.
For example, using a reward system will only be effective for loyal clients. Sleeping customers would be more interested in a special promotion or personal discount. Understanding the motivation matters.
General segmentation gives you a basic client portrait like “25-30-year-olds from the UK”. Adding behavioral segmentation will help you divide this portrait into “interested in activewear” and “interested in formal wear”. Knowing this data helps you set the right advertising campaigns and promotions.
By analyzing each segment’s behavior, you may be able to predict their future actions. This allows you to adapt the company’s commercial strategy and identify emerging trends. You’ll be ready for any scenario.
There are many behavioral segmentation examples in mobile marketing. Some of the main benefits are described below.
Create a segment of users who have recently downloaded your application. You should also include users who downloaded the app but never launched it. They lack engagement, so you should give them a boost.
Sending push notifications is one of the ways to do so. You can:
Duolingo, an e-learning app, turned its push notifications into a whole generation of memes. The company even used real-life “unignorable” notifications to increase its brand awareness and engagement. You could try something similar too.
Now you should create a segment of users who use your app but don’t launch it on a regular basis. The task is to create a habit of launching your app daily.
This can also be done with push notifications:
You may also implement a system that rewards users for their daily activities in the app. However, this depends on the specifics of your niche.
Create a separate group of users with the highest purchase and usage frequency. These are the most loyal customers who are bound to spread the word about your product.
You can motivate them to invite friends to use your app by:
As a result, you will get a cost-effective way to attract new clients and simultaneously reward your most loyal audience.
Behavioral marketing is quite tricky. Falling for one of the common mistakes is very easy without having former experience, and you might have to redo the analysis from scratch. To help you avoid that, we’ve gathered the most frequent pitfalls.
Micro-segmentation is a double-edged sword. While it helps increase the relevance of your marketing to certain groups, the process is complex and requires a lot of resources.
You must define a goal before segmenting the audience. There must be a go-forward plan that involves the application of the gathered data. Using micro-segmentation just as “another segmentation” for the bucket list is a waste of resources.
Thus, you must use micro-segmentation only when you understand how this data could benefit the company’s marketing strategy.
Everything is changing at the speed of light. This covers peoples’ needs, expectations, and wishes as well. That’s why relying on that old segmentation sheet from 2019 is completely irrelevant. Too many things have happened since then.
Although overhaul sounds scary, it’s not always necessary to be radical. You should at least perform an annual audit of your segmentation’s relevance and update it whenever required. Constant monitoring will help you simplify the change and adapt easier.
Data like demographics, needs, and buying behavior is the foundation of marketing. However, it isn’t useful when developing communications. People make decisions based on a deeper level, so the only way to promote your message is by understanding the complete picture.
You need to consider:
Researching this data may require additional time, but it’s worth it. You’ll get a distinct segmentation that covers more than just actions and behavior. The result will be a full portrait of your client's mind.
Global companies have a large among of data to work with. Nearly each of them uses behavioral segmentation as one of the ways to grow income. Let’s have a look at the most interesting case studies.
Netflix is the world’s largest streaming service and probably the leader in behavioral segmentation. The company’s algorithms launch once a user starts watching at least one show. And they track everything.
Some of the gathered data includes:
Instead of keeping obvious data like age or gender, Netflix actually researches behavior. This results in over 2000 clusters of “taste communities” based on preferences and other data. The best part is that one person may be included in several communities simultaneously.
This helps the company save $1 billion each year solely on recommendations. Everything you see, from layout to suggestions, is the result of AI and machine learning. And it all works.
Airbnb is the world’s largest accommodation booking service. The company uses behavioral data to build perfect matches between hosts and guests. This is done by using an algorithm that analyzes multiple sets of data like ratings and response times & rates.
Some other information includes:
This helps the company adjust the search results and general information users see.
Nike is the world’s largest athletic apparel company. The company uses different types of segmentation: demographic, geographic, psychographic, socioeconomic, benefits, and behavioral.
The company focuses on the way its products make consumers feel. It analyzes purchase frequency and customer loyalty, using the data to find the best way to affect the purchase behavior of its clients. By combining different types of segmentation, the company ensures its marketing efficiency is always at maximum.
Applying behavioral segmentation in mobile marketing can help you personalize marketing, increasing the efficiency of each campaign. This is achieved via multiple options like push notifications, promotions, referral programs, and others.
August 26, 2022
Figure out how to make your pushes more noticeable and effective in order to achieve the desired KPIs
August 25, 2022
Learn how to reach your marketing goals with well-timed, eye-catching in-app messages