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A Quick Primer on Behavioral Segmentation

Today we welcome Catherine Brock, Director of Digital Solutions for Maritz Motivation Solutions, as a guest blogger. Catherine has a long history of running engagement campaigns across media and channels. She is passionate about her beliefs that the keys to engagement are treating people like real human beings and always striving to add value.

Remember the old days of marketing, when you thought that a person’s gender, age, occupation or zip code could tell you something about needs and motivations? We made that assumption out of necessity – because we just didn’t have the technology to track, organize and analyze interactions with our customers.

Thankfully, those days are over. We know when customers open emails, click on links, buy things from us, log in to our websites, call customer service, etc. If you can wrangle those data points into a readable format, you can use them to understand who your customers are and, more importantly, when and how you should communicate with them. That’s the idea behind behavioral segmentation – to identify patterns in audience interactions and use those patterns to communicate more effectively.

Patterns that Matter

Important customer behavior patterns typically include frequency of interactions, context of interactions and responsiveness to different types of messages.

  • Frequency of interactions: You should be tracking purchase frequency, but don’t overlook non-transactional interactions. These include things like opening an email, asking a product question or completing a survey. You want customers to interact with you, even when they don’t need to buy something, right? And, if they’re not interacting, you want to know why.
  • Context of interactions: When do customers buy your product? Where do customers use your product? What situations prompt non-transactional interactions?
  • Responsiveness to messaging: Some of your customers respond well to points earning opportunities and others respond well to discounting. Likewise, you probably have a segment of customers who don’t respond to marketing messages, but do respond to transactional ones.

The Benefits of Behavioral Segmentation

There’s one assumption we can safely make about your customers. They’re not hoping for more marketing messages in their inbox. Your customers are inundated with offers, messages and promotions. A good many of those messages will be ignored because they’re not interesting to the recipient. And, each ignored message means wasted costs for some hopeful marketer.

Grouping customers by interaction patterns empowers you to be more precise, relevant and interesting in your communications. You can also more easily detect changes in certain customers’ engagement levels. Keep in mind that this does not mean you can send out more emails and get more responses to your offers. In many cases, it means the opposite: you can send fewer outbound messages and see higher response rates for a much lower cost.

Listening, Acting with Technology and Design

Behavioral segmentation as a practice requires some help from technology, plus a good bit of design expertise. You need technology to capture behavioral data points and automate your communication rules.

Here’s a simple example. You decide to group customers by monthly transaction volume. Your highest-volume group regularly transacts with you 10 or more times monthly. You’ve determined that a 30 percent dip in volume for just one month is generally a bad sign. You may want to set a communication rule that automatically deploys a relevant offer when a customer’s volume dips below that threshold.

In this scenario, you need listening technology to capture the data and automation technology to power the rules.

Program design expertise is equally important. If you’re new to behavioral segmentation, you may be unsure of what data you want to collect and how you should react to that data. An experienced communication designer can provide a decent starting point. From there, your designer will watch the data and make adjustments to the strategy as needed.

 

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