Behavioral Segmentation: Definition and 4 Real-Life Examples

The better you understand your customers, the more effective your marketing campaigns will be. Behavioral segmentation separates your customers based on actions such as the products they purchase, the content they consume and other ways they interact with your brand.¹

This insight can help you develop targeted marketing strategies based on customers’ demonstrated history and preferences. Instead of guessing what your customers may like, you can make informed decisions based on data.¹

This article will explore how you can better understand behavioral segmentation and how to incorporate it into your marketing strategies.

Behavioral segmentation is one of the four primary categories of customer segmentation: demographic, geographic, psychographic and behavioral. Unlike the other three segments, which focus on inherent or static qualities, behavioral segmentation is based on your audience’s overt choices.²

By analyzing these choices, you can gain insight into how customers make purchasing decisions, when they’re most likely to buy your product or service and how they feel about your brand. This information will help you better understand the customer journey—the process they take from their first exposure to your brand all the way to becoming enthusiastic brand ambassadors.²

Marketing campaigns that target broad swaths of people are expensive and inefficient. Targeted campaigns let you allocate your resources to where they can be used most effectively. Behavioral marketing segmentation can significantly increase your return on investment. You can use it to customize brand interactions based on what each person wants and needs at a specific time.³

By personalizing your offers, you don’t risk alienating people with pushy commercials they aren’t ready for. Instead, you can offer people who have never heard of your brand information that will pique their interest, while offering loyal customers incentives to spread the word.³

You can choose from many different types of behavioral segmentation categories. Stacking categories can help you further refine and personalize your strategies.

These categories may include the following:⁴

• Purchase behavior: Present offers based on previous purchases or offer a discount on an item if a customer abandoned their cart before purchasing 
• Usage rate: Track when customers use your product or service and offer incentives to increase usage during downtime
• Loyalty and engagement: Figure out which customers are most engaged with your brand and which are ready to churn, so you can draw them back in 
• Occasion-based behavior: Understand when customers are most likely to buy your product or service, so you can time your campaign perfectly

The following real-life examples show how major corporations use behavioral analytics to segment their customer base and launch targeted marketing campaigns.

Online retail giant Amazon uses behavioral market segmentation to make personalized product recommendations. Its advanced analytics models leverage its massive databases to group users with similar preferences. This data allows Amazon to recommend products that others with the same profile have enjoyed.⁵

Amazon uses various machine learning methods to achieve this fine-tuned segmentation, training its algorithms on historical data. These models can make predictions and generate personalized recommendations. Amazon also conducts extensive A/B testing and experimentation for continuous improvement in its recommendation engine.⁵

Starbucks has built a large and devoted customer base with customer segmentation. It divides customers into the following segments:⁶

• Coffee lovers who purchase frequently
• Convenience seekers who are primarily interested in fast, professional service
• Socializers who use the coffee shop as a social outlet
• Occasional customers who stop by every once in a while 

Starbucks further refines this segmentation based on factors such as the types of drinks customers prefer, where they live and other lifestyle factors. Based on this data, Starbucks delivers personalized ad campaigns, experiences and products. For example, Starbucks offers a range of flavored lattes for customers who prefer sweet drinks and a rewards program for frequent visitors.⁶

Netflix started as a DVD rental company in 1997, but unlike other movie rental companies at the time, it was able to pivot to a streaming service and grow its market share. To power its content suggestions and engage viewers, Netflix maintains an extensive amount of data on its customers, such as what they watch, their ratings, their search queries and their browsing habits.⁷

Using filtering algorithms, machine learning models and other complex algorithms, Netflix generates a personalized homepage for each user. The recommendations contain a mix of popular and less well-known titles that might interest a particular user.⁷

Nike is one of the most iconic and recognizable brands in the US. The company has remained relevant since its launch in 1964 by consistently deploying innovative and bold marketing strategies. It outsells its competitors by serving a wide audience, but behavioral segmentation allows it to develop targeted campaigns for each segment.⁸

Nike’s behavioral analysis includes factors such as purchase occasions, how often customers buy products based on their fitness level and the sports they participate in and what benefits customers are seeking, such as social status or cutting-edge active-wear technology.⁸

If you’re ready to learn to use data-driven marketing strategies to meet the changing needs of the modern business world, earning an Online Master of Science in Marketing from William & Mary can prepare you to become a leader in the field. Our expert faculty will equip you with a deep understanding of the latest digital marketing tools, technologies and strategies.

With an advanced degree from a top-ranked program, you’ll have a competitive edge, whether you’re looking to break into marketing or take your career into the C-suite. You can learn at your own pace with our flexible online program, which covers analytics and insights, marketing innovation and integrated communications.

Contact one of our admissions outreach advisors today to start your application.