A personal touch is incredibly important in today’s high-tech world.
Personalization is becoming increasingly important, as consumers are bombarded with unsolicited advertisements. Thirty-three percent of marketers consider personalization to be their #1 priority. Personalized marketing is even more powerful when paired with behavioral segmentation.
You might be wondering “What is behavioral segmentation?
How is it different from traditional marketing techniques like marketing techniques?”
Behavioral segmentation is an emerging field, as it involves marketing automation and AI. AI’s moment has arrived, as artificial intelligence algorithms are finally available. 72% of business owners find AI to be a business advantage and important for the future.
We’ve compiled a thorough guide to help you get started with behavior segmentation and AI.
The Complete Guide To Marketing AI And Behavioral Segmentation
Let’s start out by defining what behavioral segmentation is and does. It will help you better implement customer behavioral segmentation into your marketing.
What Is Behavioral Segmentation?
Behavior segmentation is a form of marketing that groups consumers based on specific behaviors.
Audiences Can Be Segmented In A Variety Of Ways, Including:
- Knowledge of a product or service.
- Attitude towards a product.
- Use of a service or product.
- The response towards a product.
Marketers can segment consumers based on numerous cues and signals.
Some Useful Behavior For Behavioral Segmentation Include:
- Shopping patterns
- Use of a product or service
- Spending patterns
- Time investment
- Lifestyle
Behavioral segmentation removes the guesswork from your marketing efforts. You can see exactly what your customers are doing. You can then make decisions on their actual behaviors.
This is a marketer’s dream come true!
Reasons To Use Behavioral Segmentation
Segmenting your audience greatly streamlines your marketing efforts.
Some Of The Benefits Of Using Behavioral Segmentation Include:
- More efficient use of time
- Saves money
- Makes the most of your resources
- Gives a greater understanding of your customers’ needs
Behavioral segmentation divides your customers into useful demographics. This allows your marketing team to greater meet those customers’ needs. It also addresses their particular pain points.
Behavior segmentation allows the ability to laser-focus your advertising.
This removes the need to create expensive ad campaigns that try to appeal to everybody.
Behavior segmentation can also yield useful data for further products and services. This will help your customers let you know their specific needs.
Examples Of Behavioral Segmentation
There are as many ways to segment an audience as there are people on this planet. The way you segment your audience depends on what metrics you’re measuring. It also depends on your particular business goals are.
Let’s look at some specific behaviors and how you might market to that audience.
Customers Seeking Benefits
Consider a hypothetical shampoo company.
Someone might find their way to their products searching for ‘dry, damaged hair.’ Or perhaps they’re looking for ‘color treatment shampoo’. Both of these search phrases are signals for a particular problem.
Now imagine that customer sees a pop-up message that refers to them by name. It might also mention their specific dilemma. “Hey, Alice! Did you notice we were having a sale on color-treatment conditioners, as well?”
Customers are more likely to make a purchase when it solves an actual problem they’re having. They’re likely to be flattered that you’d noticed and cared enough to comment, as well. Even if you happen to be a few lines of clever computer code.
Occasional Segmentation
Think of the way auto insurance has been marketed in the 21st Century.
Different generations have different relations to driving. Millennials came of age during a time of skyrocketing gasoline prices. They also grew up with a focus on environmentalism.
As such, millennials drive less than Gen X or the Baby Boomers.
Millennials purchasing their own car insurance left insurance companies in a bind. Millennials were driving less, thus buying less insurance. Insurance companies faced declining numbers of customers. They had little idea of what to do about it.
Clever insurance companies found a way around millennials’ reservations. They developed pay-by-the-mile insurance.
Insurance-by-the-mile is a similar model to car share programs like Car2Go. They took the occasion that millennials were looking for insurance into consideration. Millennials thanked them with customer loyalty.
Segmenting By Usage
Segmenting behavior by usage is similar to occasional segmentation. Usage segmentation factors in how much customers use a product or service.
One example of usage segmentation might be frequent flyer programs. Customers who fly frequently have different needs than the occasional flyer.
Frequent flyer incentives might include reward programs or special treatment during boarding
Customer Loyalty
Certain customers will only ever buy products from their preferred brand.
Others will follow the deals. Savvy marketers can offer rewards and incentives to the most loyal customers. Marketers can also offer personalized marketing messages to occasional customers. This will help convert them into a loyal audience.
These points should give you a better idea of how behavioral segmentation works. Now let’s take a look at personalized marketing and why it matters.
What Is Personalized Marketing?
Fifty-two percent of marketers report personalization to be important to their online marketing strategy.
Personalized marketing can be as simple as using a person’s name in the subject line of an email. It can also be as complex as full-blown landing pages based on that customer’s history.
Most online businesses use some form of personalized marketing. This could come in the form of landing pages or sales funnels. Personalized marketing is capable of far greater things, however.
Securing sales and customer loyalty is just the tip of the iceberg.
Why Personalized Marketing Matters
To illustrate the importance of personalized marketing, consider unsolicited advertisements.
Have you ever received an ad for a tree-trimming service, but you live in an apartment? Or a flyer for tire rotation, but you don’t own a car?
At best, these ads are a waste of time for the business owners and customers alike.
At worst, it can leave a bad taste in the customer’s mouth. When the time comes to actually need that product or service, they might turn to the competition solely out of spite.
Examples Of Personalized Marketing
There are as many ways to conduct personalized marketing as there are people on this planet.
Every customer is different, as is every company. Personalized marketing offers an opportunity to answer that particular customer’s needs.
This can be handled in a variety of creative ways:
- Devices – mobile, tablet, PC, Mac
- Location
- Search terms
- Frequency of visits
- Date and time
- Referrer
- Customer history
- Session behavior – clicks and on-page time
Regional spellings and currencies are some ways location impacts personalized marketing.
How To Incorporate Personalized Marketing Into Behavior Segmentation
Consumers regularly see an average of 250 unsolicited marketing messages daily. Personalization is mandatory to cut through that line noise and stand out from the competition.
Why Personalized Marketing Matters
Customers have come to expect personalized marketing from businesses. 73% of consumers prefer to do business with companies that use some form of personalized marketing. 86% of consumers report personalization playing a part in their purchasing decisions, as well.
Today’s largest retailers all use some sort of personalized marketing. 60% of Netflix rentals come from personalized recommendations. 35% of Amazon’s sales come from recommending products based on that customer’s shopping history.
Large retailers have access to extensive amounts of Big Data. This places independently-owned businesses at a disadvantage. Behavioral segmentation levels the playing field for personalized marketing. It’s based on each customer’s unique history and behavior.
Integrating Personalized Marketing Into Your Marketing Campaigns
Here are some methods for incorporating personalized messaging in unique and creative ways.
Multichannel Marketing
Multichannel marketing offers marketers a deep well of actionable data. Consider setting up a multichannel marketing campaign. Social media cues could trigger an email marketing message, for instance.
Browsing History
Browsing history can also offer an opportunity for personalized marketing. If a customer abandons an item in a shopping cart, marketing messages can be developed around which products they end up purchasing.
Real-time Interaction
Real-time interaction is one of the most powerful tools for personalized marketing.
Mobile technology has changed the way we market permanently. Real-time messaging can be used to entice customers to visit a brick-and-mortar location. Special events can trigger targeted email marketing.
Incorporating Trends
Of course, customers don’t want to see what they’ve already purchased.
Recommending products based on other user’s browsing history is a powerful tool. It’s the next step in personalized marketing. This makes your company appear tuned-in to tastes and trends. It also draws customers to new products and services, of which they might become loyal customers.
Incorporating AI Into Personalized Marketing And Behavior Segmentation
Many of the methods we’ve discussed are standard digital marketing best practices. Incorporating AI into personalized marketing is where things get truly futuristic and exciting!
That’s why 7 out of 10 marketers are already implementing AI-based technologies into their marketing strategies.
Here are a few ways that AI is revolutionizing audience-of-one marketing.
Personalized Recommendations For EVERYONE
eCommerce yields a treasure trove of rich, actionable data for marketing. A customer’s browsing and spending history can offer invaluable insights into machine learning. This can be used to curate custom content for that particular customer.
It can also be useful for predictive analysis, helping customers to know what they need before they know that they need it.
AI Chatbots Improve Customer Service
It might sound counterintuitive, but AI chatbots offer a human touch for your customers.
Very few companies are able to employ customer service representatives, 24/7. This lack of engagement can cause customers to unfollow brands on social media or take their business elsewhere.
Facebook’s ‘M Technology’ is a particularly excellent example. The Facebook Messenger app features an AI chatbot. It offers personalized travel and restaurant recommendations while troubleshooting technical errors.
AI chatbots help customers to feel special. They’re able to make real-time contact the moment a customer opens your website. This makes a fantastic first impression, which is invaluable towards gaining customer loyalty.
Better Targeted Ads
Even the best PPC ads can come across as generic or aimless. PPC networks still use old-fashioned keywords for their recommendation algorithms.
Sometimes they falter, showing customers irrelevant advertisements, which could leave the customer with a poor impression of your product or service.
AI can use all of a customer’s unique history to deliver ads the customer actually wants to see. AI bots can be set up to handle payments and invoicing, as well, freeing up your marketing teams for more important tasks.
Predictive Customer Service
Predictive algorithms are where AI-based marketing gets truly futuristic. Imagine the possibilities of advertising to your customer the moment they need a product. Or even the moment before they know they need it.
Intel subsidiary Saffron is already able to use AI to predict customer behavior. They can tell what a customer will buy and on which channel with an 88% accuracy rate.
Customized Frequency
Automated marketing has its shortcomings. One of them is the inability to tailor how often customers receive marketing messages. Automated marketing can do more harm than good, if not handled correctly. People don’t like being marketed to unnecessarily.
A customer’s personal history allows the ability to personalize how often each customer receives messages. Your open rates and conversions will explode with customers receiving just the right amount of messaging.
Behavior segmentation and personalized marketing help you stand out from the competition. It makes the most of digital marketing and eCommerce while avoiding the pitfalls of online business.
AI is changing eCommerce from top-to-bottom. It’s going to revolutionize the marketing game even more than social media or mobile marketing. We all remember the topsy-turvy scramble when smartphones went mainstream.
Don’t be left scrambling with the AI renaissance. Start incorporating AI and behavioral segmentation now, and stand out as an innovator. Your competition will be scrambling, while your business will be flourishing in these augmented times.
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