How Can Companies Segment Their Customers Based on Behavior?

It is crucial for companies to understand the market that they are operating in as well as the customers that they are serving. This analysis helps the company fit the right square into the right pack, or, in simpler terms, serve the right products to the right customers. Targeting, segmentation, and positioning are the three crucial steps before deciding on the company's marketing approach. These three basic steps help the company in both designing and implementing a successful marketing approach.

Targeting customers means deciding on the potential customers of the company and the product, segmentation of marketing means dividing the customers and the market into different segments to serve them better, and positioning means fitting the product and the company name in the minds of the customers. When we do the segmentation of markets, there are several approaches that a company can adopt, and those are −

• Geographical segmentation of markets

• Behavioral segmentation of markets

• Demographic segmentation of markets

• Psychographic segmentation of markets

In this article, we will be diving deep into the behavioral segmentation of markets and how it helps the company understand its customers better.

The Concept of Behavioral Segmentation of Markets

In behavioral segmentation, companies divide the buyers of the market on the basis of their user status, usage of the product, attitude towards the product, frequency of purchase, attitude towards the brand, response to the product, needs, and benefits, and others. This segmentation provides the company with information that is based on the actions of the customer and their approach. It is easy to determine as well as analyze. Some of the major wings under Behavioral segmentation of markets are −

Segmentation of Customers on the Basis of Needs and Benefits

The company understands that not all customers have the same need or motivation behind the purchase of the product. The need changes on the basis of other demographic and psychographic elements of the individuals, and in behavioral segmentation, we can divide customers in the following manner −

• Social status shoppers − Here the customer purchases the product because he believes the social status of the customer is enhanced.

• Savvy shoppers − These are customers who want to prove to themselves and others that they are smart enough to use a coupon for the purchase of the product.

• Traditional shoppers − These customers buy the brand because they have been buying it for years and believe in the quality of the brand and the product.

• Satisfied customers − These are the customers who are happy with their limited knowledge of the product and even with what they are consuming right now, so they will purchase the product even if there are better options available in the market.

• Overwhelmed consumers − These are consumers who are overwhelmed by information and will purchase the first decent thing that they see.

• Enthusiasts consumers − The consumer does not have enough money to purchase the product, but they are enthusiastic about the brand or the product and hence will buy the goods with some help.

Segmentation of Customers on the Basis of User Status

Here, the company divides the customers in terms of their purchase relationship with the brand or the product. The different customers that the company can find are −

• Current customers − they are purchasing the product on a regular basis and are associated with the company.

• Ex-customers − These are people who have been associated with the company and its products, but because of certain fallout in the relationship or no longer need the product, they have become past users of the product. For example, a baby grows old and no longer needs diapers, so the parents are the ex-customers.

• Potential customers − these are people who are not yet associated with the company but can be. Either brand-new users of the product or users of competitors’ brands

• First-time users − These people are experiencing the brand and its product for the first time.

Segmentation of Customers on the Basis of Usage Rate

Here the customers are divided on the basis of their total usage of the product, and those are

• Heavy users of the product.

• Medium users of the product.

• Low users of the product.

Segmentation of Customers on the Basis of Loyalty Status

Here, the company is dividing the customers on the basis of their loyalty towards the brand, and some of the categories are −

• Hard-core loyalists − these are the people who will always purchase a particular brand irrespective of the situation.

• Shifting loyal − These are the people who will be loyal to the brand at their convenience.

• Split loyal − These are people who are loyal to two or three different brands.

• Switchers − These are the people who will be jumping from brand to brand, irrespective of the benefit they will be receiving. They want to consume the product, and no brand holds any superior value for them.

Segmentation of Customers on the Basis of Decision Roles

Here, the company is dividing the customers on the basis of their role in the purchase decision-making process. This helps in deciding whom to target their ads at as well as how to develop them. The various decision-making roles in the buying process are −

• Role of initiator − This is the person who decides that there is a need for the product.

• Role of Influencer − This is the person who promotes similar products from different brands.

• The role of the buyer − this is the person who purchases the product.

• Role of the decision-making person − This is the person who decides what product and which brand should be purchased out of all the existing ones.

• Role of the user − This is the person who actually uses or consumes the product.

Segmentation of Customers on the Basis of Occasions

Here the company determines its target set of customers on the basis of occasion. So, for example, every person or couple who is getting married is actually a customer of the wedding management company as well as the wedding equipment or accessory providers.

After understanding the different customers, a brand might have based on their habits or response towards it, it is easy for the companies to decide and create different marketing strategies to target these customers. This will help the company hit the right note and sell better.