# Elevate Your eCommerce Strategy with Behavioural Segmentation ### CONTENT ## **What is behavioural segmentation?** Behavioural segmentation involves grouping consumers based on actions and behaviours. You may have heard about some of the most common forms of segmentation and be asking yourself, _“What is demographic segmentation”_ or _“What is psychographic segmentation?”_ These are very broad types of segmentation that can be broken into much narrower analysis tools. To summarise, demographic segmentation is where you group customers based on a list of certain demographic features. Psychographic segmentation is where you group customers based on psychological characteristics. There’s also geographic segmentation where you group based on where customers are from. Some other examples of segmentation factors include: ● How customers use your products/service ● How customers buy your product/service ● Overall knowledge of your product/service ● The percentage of new vs. returning customers ● Time spent on your website ● Where your customers come from ● What language they speak ● What do customers add to their baskets and how often do they abandon their cart? All of this information can be found using analytical tools and [audience engine platforms](https://www.quinengine.com/post/you-need-an-audience-engine) which collect accurate and up-to-date customer information. Some platforms can even help you create relevant segments based on this data. ## **The importance of behavioural segmentation in eCommerce** Behavioural segmentation is important no matter what business you’re running, but it’s especially important for those in the eCommerce space. Not only does segmenting customers mean you can understand the people buying your products better, but you can also ensure your marketing and outreach efforts have a better chance of success. According to a [report](https://www.salesforce.com/resources/research-reports/state-of-the-connected-customer/) from Salesforce, 52% of consumers would switch brands if they felt like they weren’t being offered a personalised service. Similarly, in another [report](https://www.accenture.com/_acnmedia/pdf-83/accenture-making-personal.pdf) by Accenture, 91% of consumers prefer to shop with brands that offer relevant offers and recommendations. It’s clear that when you segment your customers into targeted groups and create tailored experiences, your eCommerce business will be more successful. Some of the benefits of using behavioural segmentation in eCommerce include: ● The ability to create personalised experiences that are relevant and engaging. ● Increase customer engagement by targeting products to relevant needs. ● Improve the accuracy of your outreach and marketing campaigns by only targeting customers who have a genuine interest in your product/service. ● Improved customer awareness that can fuel future campaigns, product launches, and digital marketing efforts. ● Track customers at every point of their journey and find opportunities for improvement. ● Get more from your budget by no longer wasting resources on leads that won’t turn into customers. If it wasn’t obvious already that behavioural segmentation is important for eCommerce businesses, we’ll draw your attention to a [study](https://www.mckinsey.com/capabilities/growth-marketing-and-sales/our-insights/the-value-of-getting-personalization-right-or-wrong-is-multiplying) by McKinsey. It found that when companies implement behavioural segmentation strategies, they typically see revenue uplifted by 5% -10% and reduce acquisition costs by 15% - 30%. ## Types **of behavioural segmentation** As we’ve discussed, there are many different ways you can segment the customers of your eCommerce business, but here are some of the most popular methods that eCommerce businesses use: ### **Customer purchasing behaviour** This strategy looks at how different customers act during the decision-making process. It analyses how buyers approach their decision, any barriers they face during the process, their role in the purchase, and what behaviours lead to making a purchase. There are four main categories of purchasing behaviour that eCommerce businesses should be aware of: ### **Specific benefits** Before customers make a purchase, they want to feel knowledgeable about the benefits, features and use cases of your product or service. Depending on the customer, different benefits will be a priority and will determine their purchasing decision. For example, a shopper is on the hunt for a new face wash. Some people may be looking for something to clear up acne, whereas others want to hydrate dry skin – these are two very different benefits that usually won’t be found in the same product. ### **Stages of the customer journey** When you segment customers based on where they are in the customer journey, you can create tailored experiences that focus on converting website viewers to paying customers. ### **How customers use your product** It doesn’t matter how much market research you do; most business owners are left surprised when they learn how different customers use their products. ### **Occasion-based purchasing patterns** Using this strategy, you’ll usually group purchases into one of three categories: 1. Universal occasions: patterns that apply to all your customers. This covers things like seasonal demand and national holidays. 2. Recurring-personal occasions. These are patterns that individual customers repeat consistently, like buying birthday cards, buying a ticket for the train, etc. 3. Rare-personal occasions. These are patterns that are irregular and normally can’t be predicted, like going on holiday, starting a new job, or buying a new house. ### **How loyal your customers are** When you have amassed a group of loyal customers, you can rely on them to make consistent purchases from your eCommerce company. ## **Is segmentation the same as classification?** Although segmentation and classification seem like related concepts, you shouldn’t get them confused. Segmentation is all about grouping people or data into specific segments to improve your understanding of them and provide a tailored service. When you’re looking at customer segmentation based on demographics vs behaviours, you’re considering how different factors can influence someone’s decision to buy, as well as how actions vs individual qualities determine a customer’s habits. On the other hand, classification relates to assigning categories to people or data based on attributes and features to help identify patterns and trends. ## **How AI and machine learning can enhance behavioural segmentation** AI and machine learning is becoming a crucial aspect of behavioural segmentation as it helps to create more accurate and effective strategies. AI-enabled audience engines (like QUIN!) that help eCommerce businesses with segmentation can process vast amounts of data very quickly and effectively to provide advanced analytics. With this data, you could identify specific segments, uncover patterns in customer trends, and understand your customers’ preferences – data you can use to create tailored products and campaigns. ## **Give your customers what they want** If you run an eCommerce business and want to take the next step toward providing unique, tailored experiences for your customers, [get in touch](https://www.quinengine.com/#get-free-trial) with a member of our team today to discuss how you can effectively use behavioural segmentation.