What is Behavioral Segmentation?
As early as kindergarten, we learn that everyone is different in their own way. So why is it—when it comes to business—we like to treat our customers as if they’re all the same? Behavioral segmentation uses the cues your customers are already telling you — what pages they browse, what they add to their cart, or what articles they read — to create a compelling customer journey for them. Rather than sending out batch-and-blast emails and hoping for the best, behavioral segmentation allows you to deliver the right message to the right customer at the right time.
Think about it like this. Let’s say Customer A comes to your site, browses a few different category pages, puts some items in their cart, and then leaves with making a purchase. But, Customer B comes to your site, immediately heads to a product page, and completes a conversion. You can use behavioral segmentation to bucket Customer A and Customer B into different groups that you can then use to market to in different manners. Customer A, you’ll likely want to serve with cart abandonment emails or with related information to incentivize a sale. While Customer B you may want to put into a loyalty campaign or serve them marketing that features similar products to incentivize an upsell.
By doing this, you’re able to create a more enjoyable marketing experience for your customers because you’re tailoring it to their unique experiences. What this means is that, at its heart, behavioral segmentation gives marketers and brands alike the ability to better personalize their marketing messages to the unique individual that interacts with their site.
Why is behavioral marketing important for email?
In the past, it’s been traditional for many marketers to serve their customers ads in a batch-and-blast style. Have a brand new pair of men’s pants you want to show off? Send it to everyone. Opening a ton of brand new stores in Los Angeles? Make sure as many eyes as possible see it. While this certainly expands the reach of campaigns, it does an incredibly poor job of showcasing the care that you have for each of your customers and, in the long run, will likely result in you turning customers away from your products.
This type of marketing kills your business.
In a recent analysis performed by Wunderkind, batch-and-blast emails generate only about $0.04 in revenue per send for the average eCommerce retailer. Behaviorally triggered emails, on the other hand, generate $0.95 in revenue per send while also posting a 4.1x higher conversion rate.
The best way to avoid this is to make sure you’re interjecting as much personalization as possible into the emails that you send to your customer base.
In order to do this, you need to treat your email marketing campaigns less like a billboard and more like a conversation.
Unlike massive billboards that still dot highways all around the country (or even spray-and-pray digital ads), email is an inherently personal channel. It’s set up to tell a tailored brand story that converts your prospects and increases customer lifetime value (LTV).
With behavioral segmentation, your emails become part of an ongoing conversation with your individual website visitors based on their relationship to your business — both on and off your website. Here’s how you can start to build a behavioral segmentation strategy for your email marketing campaigns.
The Basics of Behavioral Segmentation
The foundation to building behavioral segmentation starts with knowing your target audience. It’s more than segmentation — your customers are people, not numbers. It’s one thing to know basic demographics like average age and gender, but do you know what’s motivating them to purchase your products?
This isn’t limited to B2C, either. B2B customers are humans just like everyone else — just because they’re at work when they go to purchase or they’re making a purchase on behalf of their company doesn’t mean they won’t respond to something more relevant to the pain points your product can solve.
“Dear [Name]” is just the first step of the puzzle. Behavioral marketing requires you to know every step of the customer journey from purchasing behavior to LTV and more.
Talk to Your Customers
Behavioral segmentation unlocks a new type of marketing — people-based marketing. This allows you to target an actual individual based on the behaviors they exhibit while engaging with your business, regardless of the device, channel, or browser.
To know your customers as people, you have to talk to them! This sounds obvious, but marketers are often removed from what customers and prospects actually want or need. When was the last time you sat down with one of your customers?
To create these conversational experiences, consider:
- Shadowing your sales team on a prospecting call
- Reading through customer support tickets and online customer reviews
- Diving into qualitative analysis with your research team
- Gathering customer data with surveys on your website or via email
- Setting up quick social media polls and reading through your comments and engagement
Customer Data = Behavioral Segmentation Gold
Understanding the qualitative is important, but in terms of tactics, it’s quantitative data that will tell you the most about your customers and potential customers.
Segmentation is powered by customer data. Knowing exactly who your customers and regular users are, where they’re from, how much time they spend on your site, and where they’re browsing can give you a full understanding of how each customer navigates your funnel — and where you can best nudge them into making a purchase.
Types of Behavioral Segmentation
Behavior drives behavioral segmentation (duh!), so you can slice your segments in different ways depending on how your customers behave. Experiment with these tactics when segmenting your customer behaviors.
1. Segmenting by Customer Journey
What are the key steps that need to be completed to make a purchase? Clearly define each journey stage.
When you optimize for the journey, you can:
- Let them know you’re there for any questions if they’re not ready to purchase
- Offer softer asks like following on social or sharing an article
- Keep them circling back on your website and browsing
- Qualify them and push them to sales if needed
2. Are They Already a Customer?
If someone has purchased from you before, they know much more about your brand and your offerings than someone who hasn’t. Purchase behavior is a great indicator of future intent and lifetime value.
For return customers, you can:
- Ask them for a review or rating on your site or a third-party
- Encourage them to deepen their relationship with your brand, like through social media
- Supply related products they may want to purchase based on past history
- Give them a referral discount or bonus to drive more growth
…and that’s totally different from people who have never seen your product in action. Take a look at user status, too — whether they’re light users, heavy users, or something in between.
3. Segmenting by What Problems You’re Solving
Everyone who comes to your site has a task they’re trying to accomplish, even if it’s under the guise of blowing off steam or just shopping around.
Every purchase starts with a problem to solve. What are they looking for, and how can you solve it?
To segment by solution, you can:
- Focus on the action they need to complete a task
- Connect your product to the pain point for top-of-funnel messaging
- Create a sense of urgency with abandoned carts or abandoned pages
- Provide a discount to tip them over the edge
The more you solve their problem, the more they’ll purchase, use, and recommend your product.
4. Tailor by Inbound Traffic Sources
Prospects who discover you through social media have very different expectations than folks who clicked on an ad or came through an affiliate link. Divide an email marketing campaign by inbound traffic source so you can match your messages more effectively when retargeting.
- Offer the same discount to people who came to your site from an ad but didn’t purchase
- Use the same imagery in a blog follow-up email as what’s on your blog
- Include a video in a welcome email for fans coming in from YouTube
First-time buyers and customers who don’t know your brand as well need this continuity to feel comfortable about your business.
5. Customer Location
Geolocation is easy to grab with IP addresses — and it makes all the difference. I can’t tell you how annoying it is to get a retail email advertising sunny spring days when there’s a snowstorm here in New York City.
To segment by customer location, consider:
- Location-specific holidays worth offering promotions for
- Tailoring weather or seasonal messaging based on location
- Encouraging customers to come to your brick-and-mortar store if they’re nearby
6. Answer Questions with Search Data
If you have an internal search box on your site, use it to understand what questions your customers are asking. Ask yourself:
- What questions come up again and again?
- What products are mentioned?
- What products do customers not know about?
- What are their pain points within your products?
If there’s something they’re looking for — whether it’s a specific product or a thought leadership topic — you’ll want to surface that up to those people, especially if they don’t browsers in that session.
7. Target Browsing Behavior
This is the best indicator of intent you have. If you know someone looked at your selection of lamps, for example, then don’t try to upsell them with rugs. You already know their customer behavior, so use it to your advantage.
Send them more pictures of lamps, especially if they haven’t purchased yet. Use where they’re looking to understand what other information they need to know.
- Sending related content to the products they’re looking at
- Introducing your customer support team to answer any questions they may have
- Giving testimonials or social proof around the products they viewed
- Offering a discount or a “selling out soon” urgency message to tip them into purchasing
8. Use NPS®
NPS, or net promoter score, is a useful metric most companies use to determine customer satisfaction. It’s the question you see all the time on the web: “On a scale from 1-10, how likely are you to recommend this business to a friend?”
NPS tells you a lot about how well you’re doing as a business, but it can also tell you right away who your best customers are and who you still need to win over.
When segmenting by NPS, you can:
- Request a review on your site or elsewhere to your 9s and 10s
- Give a discount to your 6s, 7s, and 8s to get them back into your product
- Escalate customer support issues from 1s – 5s to try and salvage the relationship
Your highest customer lifetime value are your loyal customers — those 9s and 10s — so make sure you understand who they are and treat them like gold.
9. Clean Out Your List
One thing to keep in mind — list size isn’t everything. Behavioral segmentation goes for the behavior happening within your emails, too. If you’re constantly sending to an address that’s bouncing or never opens or clicks on your emails, your deliverability will decrease in the long run.
Use those behavioral cues to clean out your list:
- Suppress addresses with soft bounces
- Delete addresses with hard bounces
- Comply with international regulations by sending a re-permission email
- Send a “Hail Mary” discount to unengaged subscribers…and if that doesn’t work, suppress or remove them
Behavioral Segmentation Examples
Not sure how to get started? Here are nine great examples of behavioral segmentation in action.
1. Save Abandoned Carts
A whopping 69.57% of e-commerce shopping carts are abandoned, so triggering an abandoned cart email when someone adds items to their cart re-engages them.
They may have been abandoned for a multitude of reasons — sticker shock, shipping cost, poor reviews, comparison shopping, or plain old distraction — but a well-done abandoned cart like this one from Food52 can turn all that around (and delight them, too!)
Simply put, abandoned cart emails work. Wunderkind data found that triggered emails, including abandoned cart emails, generate 24x more revenue per send. They also have significantly more endurance than your average email, with nearly a quarter of engagement happening more than 24 hours after the first send and almost 3% happening at two weeks.
2. Celebrate Milestones
There’s a reason why video games are so addicting. They provide a sense of progress toward a main goal and reward you for your “hard work.” Add a little gamification of your own to your emails like this one from Uber, congratulating an employee on 100 deliveries.
Think about the different ways you can reward customer loyalty for your own products, whether that’s offering a discount or free gift after a certain number of purchases or just saying thank you. Loyalty programs like frequent flier miles, shop credit, or virtual punch cards give your loyal customers a sense of accomplishment and increase customer lifetime value.
3. Take Advantage of Local Events
If you have a high concentration of customers in a given city, then keeping on top of local events is a must. This brilliant email from Trouva offers tailored recommendations for stores and things to do during Fringe, one of Edinburgh’s biggest festivals.
Think about your biggest markets and what might spark more interest in your product. This works both ways, too — if there’s a crisis or political issue, you’ll want to make sure you’re suppressing that part of your list to prevent any PR disasters.
4. Upsell Existing Customers
Conversion works as such: the more you ask, the more you get. It’s a snowball effect that comes from trust in your brand and what you offer. This email from Moo encourages customers to try something new.
Your existing customers know your brand best, so make them feel like part of a community. You’ll want to time your upsells so it makes sense based on typical customer behavior and tailor them based on similar items your customers are interested in.
5. Show Them What They Love
Customers have so many choices that it can be overwhelming. Help them out by hand-picking the items you know they would like best based on what they’ve already purchased. That may be items to complete an outfit or new releases of what they’ve already ordered, like this email from Old Pal.
It’s simple, but it lets the customer know right away what it is and why they would like it.
6. Make Decision-Making Easy
Use browsing data to send a roundup of products that interest specific customers, like this one from Udacity. This is especially helpful for new customers that may not know exactly what they want.
Udacity has thousands of programs, but they’re choosing to feature the ones that will most likely interest that customer based on what they’ve already looked at on their site.
7. Keep Customers Browsing
Retargeting doesn’t always mean buy, buy, buy. It’s important to get your potential customers engaged with your site, even if they’re not ready to make a purchase. The more they engage, the more likely they’ll purchase at some point. This email from Pinterest shows off what’s trending based on recent searches and categories that interest this user.
It’s tailored, relevant, and helps keep the product sticky so that when they’re ready to make a purchase, it’s easy.
8. Win Back Unengaged Customers
The first rule of email marketing is more Good Doggos, but that’s not the only reason why this email is a good one. If someone hasn’t engaged with your site in a while, send them an email. It doesn’t have to be highly designed — this simple email from Google has one clear CTA.
9. Win Back Churned Customers
Churn is a constant battle. If you have customers who have canceled or churned, give them a quick reminder of who you are and what you do and invite them to try you again. This email from Asana showcases what they’ve done to improve the tool.
Now It’s Your Turn
Great segmentation starts once you’re able to correctly identify more of your site visitors to better understand the actions they are taking on your site. From there, you can truly begin sending personalized messages to each visitor that are based on the specific actions they took on your site. To learn more, get in touch with an expert today.