If you’re a regular visitor to our knowledge base/blog, there’s a chance you’ll have come across several articles that explore UX user personas and customer journey mapping. What’s that got to do with behavioural segmentation, you ask? Well, how UX designers utilise user personas has a valuable crossover with how marketers use behavioural segmentation.
Today, we’ll explore the value of their similarities, why and how they work, and what value they might hold for you.
What is behavioural segmentation?
By watching what your customers do, you can make better-informed decisions about giving them the experience they expect, the extras they didn’t, and how to get them to buy more from you, bumping up your top line and becoming more successful.
Customer loyalty and knowing what your customers want is essential for repeat sales. By tracking their customer journey, you can understand how they choose each product or service, how often and when they buy, how much they spend, what’s likely to convince them to commit to a purchase, and a few other significant elements we define as ‘customer behaviour’.
Armed with such information, you can create (or automate) a marketing strategy unique to them, filling any such marketing messages with the things they want to hear and most likely to drive them towards a sale.
What’s the difference between behavioural segmentation and UX personas?
With UX research, we create user personas to help designers understand precisely who they’re designing websites, apps, and digital products for. You can read more in-depth details on the topic on our blog, but the key differences typically surround how we gather the data and what we use it for.
As you can imagine, there are plenty of crossovers, but customer experience relates more to customer service, advertising, marketing efforts, brand reputation, and more, against the typical targets of UX design and research being usability, information architecture, interaction, visual design, and content strategies.
What are the benefits of behavioural segmentation?
- To understand customers better: Monitoring existing customer behavior helps marketers predict future behaviour.
- To understand the customer journey: Watching how existing customers navigate a website or app to make buying decisions helps designers and marketers funnel the same loyal customers down a proven conversion path.
- To provide personalised marketing efforts: If we know what makes a customer tick, we can personalise how we market to them in a way that we know they’ll be tempted by. This drives customer purchases far more efficiently than blanket emails or campaigns that cater to a single or general behaviour or preference.
- Boost customer retention rates: Customer loyalty plays a huge part in retention, so it’s crucial to turn new customers into returning ones. Understanding how to increase customer lifetime value is a key part of an organisation’s marketing strategy, so the more you know about what appeals to different customer segments, the more you can tailor your marketing strategies to suit them.
- Save money through more efficient budgeting: Marketing segmentation lets you play directly into your target customers’ behaviours. For example, you can create marketing campaigns focussing on discounts for those who tend to buy only special offers, luxury items for those who tend to spend more on higher-quality items, or to introduce a loyalty program for your most loyal customers, persuading them to spend more regularly or even to get light users and new customers to engage a little more frequently than they currently do.
- To improve customer loyalty: Happy customers make loyal customers, so by employing marketing strategies that promote an associated product or service, we can give customers more of what they want, improving customer satisfaction and brand loyalty. A good loyalty program can also help reduce customer churn.
- To improve customer experience: Customer satisfaction is key to loyalty, so if you divide customers into behavioural segments, you can give them far more of what they want. This not only helps you achieve their highest lifetime value, but it can also increase customer satisfaction.
From a marketing strategy standpoint, grouping customers based on behavioral data allows us to market to them more efficiently. With valuable insights gathered through different customer data, each segment’s marketing strategy can be implemented, replicating the reasons behind previous customer purchases.
What are the disadvantages of behavioural segmentation?
There aren’t many disadvantages to behavioral segmentation, as utilising different behavioural segments is a great way to fine-tune your marketing campaigns.
However, predicting customer behaviour isn’t an exact science. How we collect behavioural data can impact the results, whether it’s through targeted ads, monitoring each customer journey stage, purchasing behaviour, or even customer feedback. Yet, there’s still no magical crystal ball that predicts the reason for every visit, choice, or purchase. Different data-gathering methods can help confirm or narrow down those best-bet predictors to bolster accuracy.
Why is behavioural segmentation so critical to marketing efforts?
Just as UX research boosts the ease and enjoyment of using our products for our target audience, behavioural segmentation ensures you deliver the same joy of operation to your most valuable customers.
- Personalisation helps give your customer base a sense of belonging while also predicting purchase habits to boost sales.
- Budget allocation ensures that resources aren’t wasted and funding goes to the marketing messages and strategies that are most likely to provide conversions and returns.
- Future planning while monitoring buying, selling, and product trends allows marketers to stay valuable steps ahead of the curve and the competition.
Types of behavioural segmentation
The following list includes some of the most popular types of behavioral segmentation examples. Depending on your product or service, you can decide which of them are most appropriate for your business and marketing strategies.
- Usage-based: How and when engaged customers interact with products offers valuable marketing insights. Tracking purchases, consumption, and engagement provides details of the ideal times and methods to remind your customers about what they’re missing.
- Purchasing process: Are your customers impulsive buyers or heavy researchers? How often do they buy from you, and what types of products do they buy? Do they ever contact customer services? This information is incredibly valuable for data-informed behavioural segmentation.
- Spending habits: Are they night owls or big spenders? Do they leave everything to the last minute? Do they only buy during sales or when new products are released? How and when they make purchases can be a great indicator of the ideal email and notification times.
- Occasion-based or time-based purchasing behaviour: If you identify customers who only buy at Christmas, for birthdays, or other personal occasions, how can you encourage them to spend during quieter periods?
- Benefits-sought: Do your customers buy based on a product’s benefits to their lives instead, or are their choices based on low or high-value items or gift shopping?
- Customer progression: Monitoring the customer journey shows you where customers abandon the process. You can use this to improve user and customer experience by removing recurring pain points and pushing them into more likely conversions.
- Loyalty-based: Customer loyalty segmentation helps keep your frequent users coming back. Well-promoted loyalty programs can also aid customer acquisition.
- Location-based: There’s no point pushing a service that only applies to a specific location if your customers are too far away to take advantage.
- Culture-based: Environmental concerns and the ‘green pound’ create another unique segment that lends itself to direct marketing initiatives. Other political, religious, or class-based cultures may provide similar selling opportunities.
- Price-based: If certain customers are budget-conscious, time-sensitive discount codes can boost lower sales periods.
- Interest-based: Marketing segmentation can track hobbies and interests to promote seasonal shifts, new products, and sales trends for the things you know your customers are already engaged in.
- Promotion response: If your eagle-eyed customers can’t resist a special offer or a discount code, give them that exact reason to spend with you.
Behavioural segmentation strategies
Armed with a fairly inclusive list of behavioral segments and grouping customers according to appropriate marketing initiatives, your email, advertising, and other marketing avenues can be more specific and efficiently target customer needs.
- Retargeting usage-based behaviours
- Marketing complementary products and services
- Fulfilling an abandoned transaction
- Value-based offers
- Location-based offers
- Quality-based offers
- Timing-based offers
Drawing parallels between user experience and customer experience (UX vs CX)
Apart from studying users and customers to give them more of what they want and improve their experience and relationship with your brand, marketers also lean into one of the golden rules of UX design: iteration. Once you’ve established who belongs in which segment, continuing to monitor them can confirm they’re perfectly placed for your personalised marketing campaigns—as there’s still a lot to learn from them and their customer journey. This information can help create better customer journeys or streamline their experience, improving sales, loyalty, retention, and more.
With UX research, we continue to test our findings and design updates until we’re satisfied we’ve got the product we want. In the same way, we can iterate segmentation strategies until we’re satisfied we’ve maximised their potential. Given that markets, users, and customer relationships are ever-evolving, whether for marketing potential or user experience, they’re processes that demand constant observation, evaluation, and updating.
Summary
There are strong parallels between user experience and customer experience despite the differences in how we gather and use the data for user personas and behavioural segmentation. However, the common ground between the different divisions is ensuring customer engagement is kept high, brand loyalty is maintained, and conversions and sales keep rolling in.
Data-driven decision-making for both operations will help your designers build the websites and experiences your customers value the most and also ensure you’re sending the right kind of marketing reminders at precisely the right time.
Our user research experts are available to help you get closer to your customers. If you would like to arrange a no obligation call, get in touch by emailing us at hello@ux247.com or share your requirement using the form below.
