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The Main Considerations In Behavioral Segmentation

By Sharlene Fleming

Targeted marketing is a form of marketing where the marketer conducts campaigns aimed at reaching out to a given section of customers. It is different from mass marketing in which the messages are intended for the whole heterogeneous group of customers. For one to be able to successfully carry out targeted marketing, knowledge of customer attitudes as regards the use of the products is required. Grouping customers into various categories using this information is what is referred to as behavioral segmentation.

Most business data are in the form of aggregates. For a telecommunication company, for example, this may include total daily calls, average call duration per month, total monthly revenue and so on. This does not represent the actual picture on the ground as customers are different hence the need for segmentation. One needs to know why it is that they are interested in a particular product.

There are different customer attributes that may be used to put them into groups or segments. One of them is the occasion on which they buy a product or use a service. Different groups of customers will use a service or product on different occasions. By acknowledging the existence of these different groups and identifying the reasons behind the behavior, a business can adjust its service delivery practices or redesign a product in a manner that suits each of the different groups.

By conducting a market research, it is possible to tell what benefits are being sought by a customer when they buy a certain product. This is particularly important in cases where the product has multiple benefits. The research will give an insight into the main benefits being sought by the customers. When this has been established, the producer may be advised to redesign the product in a manner that maximizes the most sought after benefits.

Product loyalty is very variable among customers. Whether loyal or not, each segment is important to the business. The business should seek to establish the factors contributing to each of these behaviors. Even among the loyal customers, there are some differences. Each customer may be loyal for a different reason. Even these smaller segments have to be identifiable and satisfied.

Customers can be divided into three major groups depending on their usage rate. These are light, medium and heavy user groups. Within a given period of time, different customer groups will use different units of the product. There are different factors that drive each of these groups to behave in the manner in which it does. When these are well known to the business, important decisions can be made by taking all these factors into account.

Segmenting is an expensive undertaking and should only be done when there are justifiable reasons. The segments must be distinct with measurable attributes. The segments should be a large component of the customer pool and durable. If it changes too soon then the expenses incurred in the process will have gone to waste.

Segments are very dynamic. Since competitors are always coming up with new strategies to win customers over, segment composition, customer attitudes, tastes and preferences are always changing. Behavioral segmentation should therefore be a continuous process that is up-to-date. Once measures have been taken, there is need to get feedback and establish the next step.

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