What factors did you consider about your customers while crafting marketing strategies? If your strategies do not align with your customer's preferences and interests, they are more likely not to bring you the desired results.
Leading e-commerce businesses consider their customers' shopping habits, price sensitivity, and interactions in their marketing campaigns. But how do they understand this data of their customers? The answer is behavioural market segmentation.
Let us explore what behavioural segmentation is and the types of segmentation in e-commerce with real-life examples.
Types of Behavioural Market Segmentation With Examples
The different types of behaviour market segmentation are:
- Usage and Purchase Behaviour-Based Segmentation
- Benefits Sought Segmentation
- Customer Journey Stage Based Segmentation
- Occasion or Timing Based Segmentation
- Customer Loyalty Based Segmentation
1. Usage and Purchase Behaviour-Based Segmentation
Have you ever considered the decision-making process that your customers go through before making purchases? E-commerce customers compare different products and different versions of the same product before they purchase. So, different customers end up buying different products based on their actions during the purchase. There are also some customers who decide not to buy anything.
But why should you segment your customers based on this purchase behaviour? This segmentation helps you understand how your customers make purchasing decisions, the issues they face during the purchase process, and why they abandon the purchase stage.
Knowing these aspects will contribute to improving your marketing strategies and fix common issues during the purchase journey. This segmentation will help you identify the price-sensitive customers, the customers who read reviews before buying, and the customers who purchase during certain times of the year.
Since your customers have different interests, approaching them with the same strategy will not work. Here are some examples.
Hush Puppies: Discounts For Price-Sensitive Customers
Let us examine the mail Hush Puppies sends customers, offering them a 20% discount on their next order. Hush Puppies is a brand that produces ultra-comfortable and colourful shoes.
Their mail mainly focuses on price-sensitive customers who would be happy to receive a 20% discount on their next purchase. Also, they clearly mention that the offer expires in 14 days to create a sense of urgency.
Saltair: Reviews in Emails
Saltair is a cosmetics company that focuses on body care, hair care, and deodorant. It sends emails with customer reviews for its bestsellers. Their email mainly focuses on the customer segment that reads reviews before purchasing. By placing the best reviews in the email, Saltair creates a positive impression of the products and encourages customers to purchase them.
TechMonk: The Best Behavioural Segmentation Marketing Tool For E-Commerce
2. Benefits Sought Segmentation
When e-commerce customers look for products, they are looking for different solutions from the same product. For instance, let us consider toothpaste. Some customers are looking for toothpaste that whitens their teeth, while others are looking for a special one for sensitive teeth. Even though they might purchase toothpaste, they are looking for different benefits from the product.
Therefore, you need to understand the benefits that a customer is looking for so that you can give them personalised recommendations and offers for the product. This will improve the likelihood of the customer buying the products from you and not from other brands.
Minimalist: Shop By Concern
Minimalist is a skin care brand that sells skin, body, and hair care products. Customers who buy from this website can purchase products by their concern. For instance, the skin care section includes concerns like acne, pigmentation, dehydration, ageing, etc. Similarly, the hair care section includes concerns like hair fall, dandruff, damaged hair, and more.
This helps customers buy products based on their concerns and also gives the commerce business an idea of the benefits customers earn from their products. This helps them send their customers recommendations and discounts for specific products that meet their concerns.
3. Customer Journey Stage Based Segmentation
Your e-commerce business's customers might be at various stages. You can also send them marketing messages based on their journey stage. Identifying the customers' journey stage might not be as easy as you think.
This is because customers at one part of the journey may engage with content for different stages. Therefore, it is important to bring all customer data from different touchpoints together to analyse and understand the customer journey.
Plum: Gifts For First Purchase
Plum is one of the premium beauty brands in India that welcomes first-time customers by offering them a gift with their first purchase. Here, the free gift entices the customers to make their first purchase.
4. Occasion or Timing Based Segmentation
You can alsoclassify your customers based on their purchasing style during certain occasions. Let us explore the different occasions when customers purchase from e-commerce businesses.
- • Universal occasions : Customers often make purchases that apply to their demographic during certain occasions. There are also universal occasions like Christmas when e-commerce businesses witness high sales.
- • Recurring personal occasions : Some customers make repeat purchases over a certain period during a year. This could be their birthday, anniversary, or just regular monthly purchases.
- • Rare-Personal occasions : These are customers' purchasing patterns when buying from your commerce business during certain rare personal locations like weddings, road trips, etc.
Birchbox: Birthday Discounts
Birchbox sends special Happy Birthday emails to customers who make recurring personal occasion-based purchases. The brand gives the customers $10 off their purchase with a code they can use during check-out. The offer is available throughout the birthday month.
5. Customer Loyalty Based Segmentation
It is also essential for an e-commerce business to understand customer loyalty and segment them based on their loyalty level. Loyal customers are your customer base who make repeat purchases from your online store and contribute to your revenue stream.
To enhance your customers' experience, you can personalise your marketing strategies and messages based on their loyalty level.
Sephora: Beauty Insider Program
Sephora’s beauty insider program has different tiers, with customers receiving different benefits for their purchases. They send separate emails and promotions to customers based on their loyalty level.
Importance of Market Segmentation
Behaviour market segmentation has various benefits for e-commerce. Let us explore the importance of behavioural segmentation in e-commerce.
Targeted Messaging in Campaigns
We have seen how eCommerce businesses can use behavioural segmentation to tailor marketing messages. It helps them recommend the most suitable products for customers' concerns and to send them the right messages according to their journey stage. Therefore, behaviour segmentation is an important aspect of personalised messages in campaigns.
Improve User Engagement
When you approach your customers with strategies and messages that align with their behaviour, they are more likely to engage. For instance, by recommending products that are more suitable to a customer's concern, they are more likely to buy that product from you. Similarly, sending discounts to price-sensitive customers is an ideal strategy to improve their user engagement.
Higher Conversion Rates
Behavioural segmentation can also help your e-commerce business by improving the conversion rate. How does it do this? By giving your customers the right messages and offers, you can easily convert them.
Enhance Customer Retention
It is important to understand your customers in-depth to develop strategies to retain them. Behavioural segmentation is an important part of the customer retention strategy, as it helps you to understand your customers' preferences and behaviour.
TechMonk: The Best Tool For Behavioural Segmentation In E-commerce
The marketing efforts and messages of the above e-commerce businesses bring exceptional results as they align perfectly with their customers' interests. If you wish to achieve the same success, you need a tool that illuminates your customers' behaviour and preferences. That is why you need to try TechMonk.
Here is how TechMonk helps e-commerce businesses understand their customer behaviour.
- • Customer Data Platform : TechMonk integrates with various tools and unifies the customer data in its customer data platform. With this data, businesses get 360-degree customer visibility.
- • Customer Segmentation : With increased customer visibility, you can perform effective behavioural segmentation on your customers.
- • RFM Analysis : Using TechMonk, e-commerce companies can understand customer behaviour through a simple RFM (Recency, Frequency, Monetary) segmentation. It segments your customers based on their recent, frequent and valuable actions to your business.
- TechMonk allows you to choose the Recency and Frequency events and also the periods to make the analysis precise.
Here’s how you can perform an RFM segmentation on TechMonk.
- Initially, open the RFM tab from the sidebar on TechMonk.
- Click the Create RFM button on your screen.
- Enter your segment's name and choose the event for which you want to create the RFM segmentation under Select Recency & Frequency Event field.
- In the respective fields, select the Start Date and End Date and complete the remaining fields on your screen.
- Select the Next button. This will show the user segments based on the RFM event as follows.
- About to sleep
- Price-sensitive
- Loyal customers
- Promising customers
- Recent customers
- Customers who need attention
- Finally, click the Save section button.
Our platform automatically groups customers into 9 RFM segments. Moreover, you can add event attributes like loyalty points, total orders, or recent time spent on specific products for deeper insights.
TechMonk also supports Dynamic/Static/Drip segmentation to understand your customers' behaviour. With additional support for creating micro-segments by adding more than one event, it lets you analyse customer behaviour precisely.
- From TechMonk’s interface, select the Segment option.
- Select the Create Segment option from the top of the screen.
- You can now see a pop-up on your screen. Enter the name for the segment and then choose between Static, Dynamic, or Drip.
- Propvide a Sdescription for the segment in the respective field.
- Choose to sync with Google and Facebook, and click Save.
- You can choose multiple events in the Customer and Event fields to micro-segment customers and create precise customer segments.
- Once done, choose the Save Segment option.
TechMonk is not just a tool for customer segmentation. Its incredible features bring outstanding results to your e-commerce business.
- • Gen AI Bot : TechMonk’s Gen AI Bot ensures that your customers' queries are always answered and that they receive personalised recommendations on their favourite communication channel.
- • Journey Orchestration : Knowing consumer Orchestrate your customer journey by automating a series of actions triggered by your customer’s behaviour.
- • Omnichannel Communication : Reach your customers with personalised offers and messages through the web, WhatsApp, Email, and social media.
Do you wish to achieve these amazing results in your campaigns? Get on a call with us to know how!
Use Behavioral Data To Personalise Customer Experiences Across All Touchpoints With TechMonk
Conclusion
With leading e-commerce businesses throwing light on the importance of behavioural segmentation, it is a top consideration for other businesses. Investing in a tool that can segment your customers based on their behaviour always comes with an impressive ROI. However, make sure that you have complete visibility of your customer data from different sources to make your segmentation process right.
With that, you can send your customers personalised recommendations and offers that they cannot resist. This improves the conversion rate and user engagement in your platform. Moreover, it contributes to revenue growth as more customers are likely to purchase from you since your messages and offers align with their interests.
FAQs
What are the four types of market segmentation?
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