Target practice: Understanding behavioral segmentation and how to use it

By now every marketer knows that audiences expect campaigns to be targeted and personalized, and that audience segmentation is essential to making this happen. 

Traditional audience segmentation relies on demographic, psychographic and geographic data to target groups of like-minded individuals. Geographic and demographic segmentation is quite simplistic and customers tend to expect more. Psychographic data can be difficult to collect and often requires self-reporting which can be unreliable and dates quickly. 

Behavioral segmentation is different. Instead of grouping customers based on who they are, it creates segments based on actions they take and behaviors they demonstrate. 

In this article, we’ll explore

1. What is behavioral segmentation? 

2. Types of behavioral data

3. How to track behavioral data

4. Benefits of behavioral segmentation 

5. Use cases for behavioral segmentation

What is behavioral segmentation? 

There are four main types of audience segmentation: demographic, psychographic, geographic, and behavioral. Behavioral segmentation focuses on the actions audience members take and the behaviors they exhibit. 

Segmenting your audience based on their actions and behaviors can help you generate insights, personalize marketing campaigns, and target across the buyer or customer journey. 

Types of behavioral data

Countless behavioral data points can be collected and used to segment your audience. To combat overwhelm, it can be useful to think about these falling into five categories: 

• Website visitor data

Website visitor tracking can show you things like pages visited, scroll depth or time spent on page, interactions with widgets or your live chat feature, videos watched, and form completions. All of these data points can all reveal a lot about where a website visitor is in their journey, and what they might be looking for. 

• Purchase data

Completed transactions, abandoned carts or sign-ups, cancellation page views, and pricing inquiries are all examples of purchase data. Many of these things are actions, but you can also look at the bigger picture to identify behavioral patterns. 

• Product usage data 

If you are a SaaS company or you have an app, you can track how your customer uses your product. For example, feature usage, adding seats, response to in-app chat or widgets, interactions with tooltips, and responses to surveys. 

• Customer feedback data

Customer feedback data can be generated from NPS or CSAT surveys, via support agents on live chat and email, reactions to emails, or in pop-up surveys. 

• Campaign data

Every email, SMS, push notification, or advertisement you put into the world brings data back. Opens, click-throughs, downloads, replies, and other actions taken can be used to build behavioral segments. 

How to track behavioral data

There are some straightforward mechanisms that can help you generate behavioral data, and many of them are fairly set-and-forget. For example:

1. Website session tracking: Generally requires a tracking code or pixel to be installed on your website. In Ortto, this code is configured in your data sources settings or will be automatically configured for users with a third-party ecommerce integration like Shopify.

2. Purchase data: Your payment processing tool, like Stripe, and/or CRM/CDP like Salesforce will collect purchase data. This data can be easily utilized for campaigns and reports with a marketing automation and analytics tool like Ortto. 

3. Product usage data: Works similarly to website session tracking. Software Development Kits (SDKs) allow you to embed code snippets powered by JavaScript directly on your app, and then you can set up custom events based on actions you want to track. This can take a bit of up-front development time, but it’s well worth the investment.

4. Customer feedback data: Typically collected from surveys appearing in widgets, pop-ups, or shared via a link. 

5. Campaign data: Your email platform will track metrics like campaigns received and opened, and clicks can be tracked via UTMs. Campaigns via ad platforms will track activity like views and clicks. 

Benefits of behavioral segmentation

Setting your ecosystem up for behavioral tracking can take some time. But once you’re ingesting that data and using it to create behavioral segments, your whole business will benefit.

• Target the right customers 

Using behavioral segmentation in campaigns or journeys adds a level of personalization that helps you stand out from competitors. For example, you can use a mix of customer feedback and product usage data to identify your most loyal customers and target them specifically to participate in VIP experiences or take part in beta testing.

• Score leads to prioritize sales efforts

Not all leads are created equal. When you can create behavioral segments for different levels of intent, your sales team can prioritize the hot leads who have viewed the pricing page and watched a demo video, while your cooler leads can be sent through an automated lead nurture journey until they show clearer signs of intent. 

• Personalize campaigns 

Purchase and usage data can be used to create segments of people who regularly purchase a specific product or product type, or engage with a feature in your app. This can then be used to help inform product or next-best-action recommendations in emails, SMS, or pop-ups. 

• Proactive churn prediction and prevention 

Usage and customer feedback data can be used to create segments according to a customer’s churn risk or loyalty status. With these segments, you can make more accurate expected churn predictions, create automated journeys to prevent churn or automate alerts to encourage your success team to try and save them. 

Three examples of using behavioral segmentation across the customer lifecycle

As you can see from the benefits listed above, behavioral segmentation can help you improve campaigns, learn more about your customers, and drive business outcomes. Here are some examples of audience segments based on behavioral data:

1. Nudge to conversion 

Actions like starting a quote, viewing a feature or pricing page as a known contact, or abandoning a cart indicate that a lead is getting hotter. This data can be used to create segments across the buyer’s journey — hot leads, warm leads, and cool leads, for example. 

This can help your sales team prioritize outreach, enable marketing to create more personalized and relevant nurture journeys, and give your leadership team a better understanding of lead volume and probability.

It could also help you convert a high volume of leads around specific cultural moments or events in the news. For example, during a COVID-related lockdown, TAXIBOX used Ortto to quickly find an audience of hot leads in Melbourne who might be looking to move interstate in a campaign that drove significant revenue during an uncertain time.

“When Melbourne went back into lockdown we thought there’s a lot of uncertainty around, let’s find everyone who has either created a quote for an interstate move, viewed the interstate moving page as a known contact, or started and not completed a booking that was on an interstate move in the past 30 days.” shared Jan Uwland, Head of Marketing. 

“We found 1700 people that had active quotes, and we attributed 10 sales in a single email. It was a 10-15 minute job that generated thousands in revenue of high-value sales. It’s that highly-targeted campaign without the chaos of SQL that we simply couldn’t do with any other tool.”

2. Recovering missed appointments or meetings

It usually takes some work to get a lead to book an appointment or meeting. When they become a no-show, it can feel like you’re either wasting all that work by letting them fall by the wayside or you have another mountain to climb to get a rebook. 

Behavioral segmentation can be used to automate the process of rebooking no-shows. Once the journey is set up, it will automatically trigger when a meeting is missed, encouraging them to rebook. Taking the manual work out of this process results in more meetings being rebooked, but it also saves your sales team from wasting their time on people who have no intention of rebooking.

The team at Mosaic, a resource management SaaS solution, built a journey like this in Ortto that has resulted in 40% of no-shows being rebooked. 

“We have a no-show discovery call cadence. So if someone books a demo on our website and then doesn’t show up for the demo, they’re put into this eight-part cadence. And then we write a task to the assigned rep to also hand dial. So we can collaborate with sales and orchestrate these campaigns to not just be marketing campaigns, but they’re also SDR campaigns — picking up the phone and dialing the right person at the right time, with the right message.” Growth Marketing Manager Ari Goldstein shared.

3. Onboarding 

For SaaS, onboarding is critical to turning free trialists into paying customers, and can play a role in turning customers into loyalists or advocates. Successful onboarding journeys nudge a customer through a set of specific actions, helping them get more familiar with the product step by step.

Behavioral segmentation can help you send reminder messages to customers who have not yet completed a critical action, or nudge them to complete the next best action in a sequence. You can also couple behavioral data with information like organization size or MRR to create a list of free trialists or customers who could benefit from additional support from your success team. 

TrulySmall Invoices, an accounting platform from Kashoo, noticed that customers who create multiple invoices quickly see value realization. They used behavioral segmentation in Ortto to target customers who have created one invoice, but not a second within 45 days, nudging them to create an invoice. This email campaign sees an open rate of 40% and has helped them increase their conversions overall. 

Final word 

Much of marketing is about nudging a lead or customer to take the next best action. Behavioral segmentation allows marketers to create segments based on these actions or behaviors, and target them with the right message, at the right time. It can also help you get a clearer picture of your buyers, customers, and their journey, and to more accurately make predictions about conversions or retention.