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Behavioral Segmentation: From-Rookie-to-Expert Guide

Let’s face it… behavioral segmentation

…you can’t be everywhere at all times to interact with every customer.

The problem is…

You know that, if you are everywhere for each of your customers, you will get more deals, make more, money, and keep your customers happier.

Right? Right.

But even if you know what each of your customers is looking for, you can’t physically respond to every customer.

The good news is that, now, with the technology available, you not only can be everywhere and interact with every customer, but you can also provide a remarkable experience over and over again.

How? With behavioral segmentation and drip campaigns.

Behavioral segmentation and drip campaigns are here to help you automate your processes and respond to every customer’s needs in real time across channels and devices. 
To clarify, I’m not talking about a lame auto-responder. I’m talking about a fully automated, data-driven, goal-focused, highly personalized, and most relevant customer journey that evolves with each customer.

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How cool is that?!?

In this guide, I’ll share with you everything you need to know about behavioral segmentation.

Let’s get started.

Stop guessing and start listening

 

Tracking customer behavior tells you everything you need to know about the customer’s needs and interests at a given moment.

No more guesswork on what the customer wants!

Since you know the need, you can be relevant and send data-driven, laser-focused messages to each customer that fits perfectly to his needs when needed.

It’s a different approach than with regular marketing campaigns, as you are responding to a need not initiating a general campaign.

Here’s the Craziest Part…

Strangely enough, while customer’s actions are well-organized in your CRM system, customer behavior stays somewhere in the air, let alone being recorded. This makes it impossible for you to utilize customer behavior.

Simply put;

Without listening, you can’t respond (unless you are talking to yourself, in this case, all good).

Tracking customer’s behavior

 

Because you want to segment customers based on behavior, you need to track customer’s behavior through all the touchpoints between you and the customer. This will allow you to create behavioral segments you can work on.Collect

Ask yourself: Where do I meet my customer?

Is it your website? Call center? Through emails you send? Where did the interactions take place? Once you’ve answered this, track the behavior on every touch point.

Once you have this valuable information in place, you can utilize any behavior you would like to respond to.

Noteworthy Customer Behavior Segments

Website

Tracking website visits tells you the customer has entered your store and looked around. This is, without a doubt, a great opportunity to say hi. Newbies /inactive/ repeating customers have taken an action and visited your casa. Make sure they get proper attention by sending a “we’ve missed you” message.

Product

When someone is actively looking at a product, the clock is ticking. Act fast and tell him/ her how awesome your produce is. Add a nice promotion for the specific product to close the deal.

Blog

Blogs are here to share knowledge. When someone reads your blog, don’t take the aggressive approach. Instead, send “suggested’ posts to enrich his knowledge.

Conversion

Track every action the customer did: registered, downloaded eBook, abandoned cart, purchased, purchased again. Even when this information is stored nicely on your CRM, you want to turn the data into action and act fast.

 

Behavioral Segmentation and Customer Response: Have a Personal Chat Automatically.

Above all…

…tracking customer response to your messages is the most important and valuable tracking you have in your tool box.

By tracking the customer response to your emails and SMSs, you are switching from having a monolog to a healthy dialog, where the customer response is the feedback you need to continue (or not) the conversion.

Go beyond opens and clicks, so you can fully understand where your customers are going after they click your email/SMS. 
This way, you will make the most out of your marketing campaigns, as every email /SMS you send is part of a conversation between you and your customer.

 

Response-Segmentation

Non-Openers:

There are 2 main reasons people are not opening your emails:

  1. Your emails don’t hit the inbox – Therefore, the customer is simply not getting/ seeing your emails. With this segment, you need to strategize your email delivery, make sure your lists are clean, and contact the most active members you have.
  2. Your emails are not interesting enough – Make sure your subject lines are compelling and encourage people to open your email.

Either way, treat this segment based on the lead age, as described before. You can also add social ads and SMSs to increase your exposure.

Text messages have a 98% open rate (Source: Mobile Marketing Watch). So, if your main channel is SMS, no “non-openers” segment is needed.

Opened but didn’t click:

This segment tells you there is a problem with the content of your message.

Either the content is no good or your promotions weren’t enough. Contact those active users more frequently with better offers to make them click.

TIP: Personalized emails improve click-through rates by 14% and conversion rates by 10%. (Source: Aberdeen)

Clicked but didn’t act:

This segment requires an immediate action. These people have opened your email, read it, liked it, and clicked. For some reason, they have taken no action.

You should dig in and understand what went wrong and follow up fast with a better offer to close the deal.

Unsubcribers:

These are dead contacts, right? Wrong.

To explain, 

These people simply don’t want to receive emails from you. Don’t take it personally; it can be for plenty of reasons.

The top reasons for U.S. email users to unsubscribe from a business or nonprofit email subscription are too many emails (69%) and content that is no longer relevant (56%). (Source: ChadwickMartinBailey)

What you can do is show them targeted social ads and win them back.

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Here is a good example of behavioral segmentation in action:

An online retail store has segmented their leads into several categories: people who have spent 30 minutes or more on their site, leads that have regularly spent over $300 on other retail sites and comparison shoppers. With the overlap of these segments, you can quickly form a persona that is easy to market to. Someone who spends a lot of time on your site, likes to comparison shop, and is likely to spend approximately $100 will benefit from the following campaign. Send them a coupon for 5% off when they spend $150 to help this segment move up to a new pricing bracket. It would be detrimental to send such an offer to customers who regularly shop around $300/month.

Sounds like a lot of work? True.

But remember, the idea of behavioral segmentation is having everything automatically. The segments you are creating are dynamic segments, which means you only need to build it once.

Finished? BAM!

All your customers will automatically transfer between segments based on customer behavior.

Now what?
It’s time to turn the data into actions and engage with your customers!

Customer Engagement

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Behavioral Segmentation and Customer Engagement

Let’s get right into business. 

Following what we’ve talked about so far, our starting point is that we already know who the customer is and what he/she is looking for.

We have our segments in place, and they are being populated with contacts based on our rules.

Step 1: Plan before you engage

Before you jump into creating messages, you need to answer these 5 questions for every segment:

1. What is my marketing goal for the segment?

Is it to close a deal? provide more information? provide a good buying experience?

The best way to look at this is as a customer journey. Like any journey, there is a starting point and an end point. The starting point is the customer need or interest, and the destination is your business goal.

2. How much time do I have?

Different situations have different urgency levels. Plan your messages to be sent during the time of the interaction.
If someone abandons their cart, you have little time and you should act fast to close the deal.

3. What marketing treats do I have in my toolbox?

Here, you need to come up with the marketing promos that will help you achieve your goal. Coupons, discounts, and other treats you can offer to your customers to close the deal. Once you know what you have to offer, you can strategize when to use them. Say you can Offer 25% off for shopping cart abandoners. Start with 10% off, and if it’s not enough, increase to 25%.

4. Which channels should I use?

To maximize your exposure, you can add multiple channels. Emails, SMS, push notification, social ads use them all together, based on the time you have and the marketing goal.

5. What systems I can use? 

Having all your systems work together will ensure your organization is aligned to customer needs. Connect all your marketing systems, make sure they are synced, and work together to achieve your goals.

Here is an example. Let’s say one of your customers has abandoned their cart. You made your move and sent him 10% off. Your email, SMS, push notification, and Facebook ads (you need not use all of them together) should all offer 10% off. Let’s say that, as part of your strategy, you offer 25% off to increase the sales odds. The message should be changed through all the systems and channels.

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To demonstrate, here is how it should look.plan

Step 2: Behavioral segmentation and customer engagement

Tracking behavior? Check. Segments? Check. Plan? Check.

Finally, …

…you can create drip campaigns to engage with your customers based on their interests and your business goal.

Behavioral segmentation is also used with drip campaigns. Every message you send should rely on the customer’s response to the previous message you’ve sent. This way, the customer journey evolves with each customer until the business goal was achieved.

The best way to utilize customer behavior is using the IFTTT technique or, by its full name, “If-this-then-that.” This technique allows you to respond to the customer response within the customer journey and guide him to the journey’s destination.

Here is an example.

Say you have a customer who has shown interest in a specific product, but completed no purchase. You send him an email; he opens the email, but doesn’t click. With drip campaigns, you can respond to his behavior and send another email 24 hours later, offering a higher discount to close the deal. 
You’ve used behavioral segmentation twice. First, you used behavioral segmentation to understand what the customer is looking for. Then, you used behavioral segmentation again to follow up to customer’s response and send a more relevant message.

Fun fact: Follow Up Statistics
*48% of sales people never follow up with a lead
*25% of sales people make 2 contacts
*12% of sales people make 3 contacts
*10% of sales people make over 3 contacts
Source: U.S. Chamber of Commerce

With drip campaigns, your messages are part of a dialog between you and the customer. Look at it as a chess game where every behavior of the customer affects your next move. This way, you are contacting your customers based on their level of interest and no one is left behind.

Need help? Check out this article: Top 10 Hacks to Convert Sales Leads Fast

Step 3: Behavioral segmentation and optimization

You’ve set your segments, created customer journeys; you can now sit back and enjoy the fruits of your hard work. With behavioral segmentation, you can make everything automated. This means that, from now on, you can focus on optimization.

Journeys Optimization: Measure your Actions

Mapping your journeys will allow you to keep track of the response you get from your campaigns. By analyzing your journeys, you can see if you need to add more channels, if a better coupon is needed, or if another message should be sent.

Segments Optimization: Know your customers better

By looking at how your segments are being populated, you can see where to focus your actions. Analyzing each segment performance will tell you if you need to drill down and create more segments to focus your messages better.

Lead Sources Optimization: Allocate your marketing budget effectively

Planning and automating your engagement means every customer is being treated in the same optimal way. Therefore, you can measure your lead sources to understand where the good leads are coming from. Use this information to allocate your marketing budget better and keep the good leads coming.

Messages Optimization: Deliver the right message

Analyzing your open and click rate will tell you if your emails/ SMSs needs improvement. Create beautiful responsive campaigns with quality content and great calls to action.

In a study of over 93,000 calls-to-action created using HubSpot and hundreds of millions of views over a 12-month period, HubSpot found that calls-to-action targeted to the user had a 42% higher view-to-submission rate than calls-to-action that were the same for all visitors. (Source: HubSpot)

Channels Optimization: Understand what’s working 

Measuring the response you get from each customer will tell you what channel are better to reach your customers. Try not to stick to one channel, but combine multiple channels, using one main channel as your main communication channel. The other channels are supporting the main channel. If your mail channel is emails, add social ads for as long as the email is being sent to increase your exposure.

Systems Optimization: Use your resources better

Using multiple marketing systems to achieve your goal is essential for your business growth. By analyzing the marketing system’s performance, you can select those with the highest value to your business. For example, you can measure the effectiveness of several email providers to decide which one provides a better inbox placement.

A nice use case: Optimization in action.

A retailer had, what he called, a great Facebook campaign.

The goal of the campaign was to generate sales, and for every 100 clicks coming from Facebook ads, the retailer gained another customer.

Actually, this is good I must admit.

The retailer checked the impact of his emails to leads coming from the campaign. First thing he noticed that a large group of leads converted a few days later, after sending a promo email. He then checked email performance, and this was very interesting.

To be sure his campaign is fully optimized, he ran a check between men and women to see which one he should better target through the Facebook campaign.

The email open rate for both men and women were similar (about 26%). What was interesting is that men clicked half as much as women, but purchased twice as much.

This was strange as the retail shop offers more women related goods. He investigated and came up with a conclusion that men buy gifts for their wives/girlfriends/ relative. What he did was pretty cool.

He created two segments coming from this campaign: men and women. Same goal, different landing pages, and different messages. 
With men, his goal was to encourage clicks, so he targeted his content to buying gifts. With women, he focused his actions to encourage sales, so he offered coupons and discounts.

He added Facebook ads to those who clicked his emails but didn’t take action and unsubcribers.

This works perfectly, as after the modification, the overall campaign generated 3 customers per 100 clicks.

Let’s wrap it up.

Behavioral segmentation lets you engage with your customers like never before.

Once you’ve grouped your customers, segmentation continues to the more advanced stage. Just because 500 of your customers are female doesn’t mean they all have the same needs, desires, and triggers, which means you shouldn’t use the same marketing approach for all of them.

To get the most out of behavioral segmentation, you’ll want to group your customers into smaller and smaller segments until you’ve come up with a solid niche with a single core similarity. Whether it’s single moms under 25, middle aged men with arthritis, or cat lovers in Washington DC, clearly define your common thread because it is this central factor you will market to.

In conclusion, 

The more detailed you get, the more personalized your marketing campaign will be, and as any marketer worth his salt will tell you, personalization is the gateway to profit in today’s ME society.
To help you get started, download our checklist (100% free).

Customer behavioral segmentation is not a simple matter, but it is integral to any business looking to expand. Read More about Behavioral Marketing Technology and how it can help you grow your business. If you don’t track your customer’s behavior, here are other database marketing techniques you can use. 

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