Top 3 Uses Of Behavioral Segmentation Marketing In eCommerce

Trying to Improve Your Customers' Interaction With Your Online Store? Find Out How Behavioral Segmentation Marketing and Targeting Can Save You Months!

What is Behavioral Segmentation Marketing?

In today’s cluttered marketing world, there are many buzzwords that are commonly used by the industry professionals. To ease up the process, we’ll first start with the basics before diving into the context of behavioral segmentation marketing. Market segmentation refers to the process of dividing a market of potential customers into groups, or segments, based on different characteristics. Simply put, any market segmentation based on customer behavior or customer buying behavior is behavioral segmentation. With the use of behavioral segmentation marketing, an e-business owner can quickly categorize his customers on the basis of number of times they have visited their online store, what products they have bought, what categories they prefer, if they are registered members and target them accordingly through several marketing channels.

With behavioral targeting, marketing has taken a giant leap forward from the traditional types of marketing segmentation based solely on demographics – namely, age, sex and location etc.

“Regardless of channel type, there is a huge difference between spending money on speaking to someone who is never going to buy your product or service versus investing in speaking to someone who is likely to convert or influence other converters”.

– Pete Stein, CEO of Razorfish, New York

Why is Behavioral Segmentation Different from Psychographic Segmentation?

Demographics segmentation explain “who” your buyer is, psychographics segmentation explain “why” they buy and finally behavioral segmentation showcases the actual behaviors of the customers. Back in the days where there was no web analytics, the only way to gain psychographic information was to interview your customers. It was nearly impossible to tie this data with actual purchases of the shoppers. Luckily today we are equipped with state-of-the-art computing tools that help us understand each and every visitor’s online behavior and derive an understanding about his/her next behavior.

Why Is Behavioral Segmentation In Marketing So Important?

At the core of marketing lies the understanding of the consumer need. A marketer does not promote a product but instead he /she markets a solution to a need. This is why understanding the need of a single customer is of immense importance in marketing. In the offline days, it was not possible to gain insights and execute marketing on a consumer level. That is why several different marketing segmentation practices were derived by the “Mad Men” type of marketers/advertising pros. Putting consumers into segments was a great idea and it worked for decades. Then came the WWW and the eCommerce revolution began. Web analytics, business intelligence and marketing technology solutions are able to shed a light on the most important aspect of modern marketing – the single consumer. Now it is possible to track and capture a single visitor’s behavior in real time, convince that person to make a purchase with personalized offers, re-target the user on several social media channels or re-market to that customer via automated and personalized emails.

How Did the Advent of AI Change eCommerce Marketing
?

With the onset of internet, businesses set up their own online storefronts to reach out to more customers. Later on, by tapping into the latter’s buying behavior, businesses were able to reach customers directly and more effectively. But with the increase in the eCommerce landscape and the resulting overwhelming volume of data, it became humanly difficult to process such huge amounts of analytics. This is where Artificial Intelligence (AI) got into retail. AI is designed to manage large amounts of data. In fact, the more the data, the better the prediction. The effective usage of data is then translated into more predictive intelligence to support behavioral marketing efforts.

How is AI Empowering Behavioral Segmentation Marketing?

From Virtual shopping assistants and recommendation engines that help a customer find the product they are looking for, to the use of chatbots, AI is impacting every stage of the customer journey.

Behavioral segmentation divides consumers according to their actions. Here are some of the ways in which AI is capturing and analysing these actions to come up with meaningful behavioral segments:

Improves Search Capabilities

Machine Learning coupled with NLP improves the search engines’ capability to learn from new interactions, better understand what a customer is asking for, and delivers a more relevant outcome.

Improves Customer Interactions

Online retailers can now prevent their customers from receiving unwanted mails and ads by using Data Mining and Machine Learning, both of which fall under the AI umbrella – to learn how each customer wants to be reached, and how often. By measuring website clicks, they can gauge customer interest.

Fuels Personalization

E-business owners can now combine data from transactions across all channels with the help of various actions taken by the customers on their sites throughout the day. This gives them a better understanding of their needs and wants. eCommerce companies can now understand what drives an individual to purchase certain products; and then use that information to predict which products the customer might be interested in.

Furthermore, AI techniques help recognize patterns and is capable of churning out hyper-personalized recommendations for customers. Companies like Perzonalization are constantly working towards bringing the best of AI powered personalization tools for eCommerce owners.

What is Behavioral Targeting Advertising?

Behavioral targeting leads the way for targeted ads. By capturing data such as location, device, time on site, page views, pages liked etc., behavioral targeting serves up ads to customers based on their behavior. All the best behavioral marketing examples are the ones that bet on the high likelihood of an ad click. Ad selection is made by taking into account the click probability of that specific user. The real life implication of this feature is reflected into what kind of ads we see. While a sports shoes ad is being served to a user who has viewed fitness equipment in the last couple of days, a baby diaper ad is shown to a woman who has recently read the article “10 Tips for Healthy Breastfeeding”.

Behavioral targeting also provides a context for personalization. And personalization amplifies through proper contextualization. And what more, with the help of personalization, at every stage of a customer journey, it offers benefits to retailers as well as their customers.

Conclusion

E-commerce businesses face a lot of competition, today. The good news, however, is that they are also equipped with great tools and techniques to analyze customer behavior, and cater to their needs at a more personal level. The ultimate goal of behavioral segmentation marketing is to understand your target audience and optimize your conversion by leveraging your products with contextual branding and marketing approaches.

 

Want to Learn More? Talk To One Of Our Personalization Experts

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İlke Karaboğalı

Co-founder @perzonalization, SaaS marketing enthusiast, ex fmcg marketer, ex Nokian