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Behavioral segmentation, or behavioral targeting, is a segmentation strategy that identifies consumers based on what they do. A behavioral segment is not focused on what they do for a living, but rather the behavioral pattern of actions they take in their daily lives. The key consumer behavior that is especially important to look at is how they directly interact with your brand or in the proximity of your brand (e.g., you offer insurance and the consumer is educating themselves on how auto insurance works using Google).
Behavioral segmentation in marketing requires a marketer to pay attention to customer behavior, such as the purchasing behavior of an existing customer (think: RFM analysis) or the behavior patterns of a target audience, to alter a brand’s marketing message, increase brand loyalty and solidify customer retention.
For instance, marketers may observe the customer experience and interactions with the brand, product or service, including:
How customers use the product or service
The customer’s knowledge of the brand or offering
The customer’s attitude toward the brand
In digital marketing, marketers would observe the customer’s behavior patterns on the website, such as:
The amount of time spent on given pages
Time spent before leaving the site
Identifying previous purchases and behavior by existing customers
Behavioral market segmentation differs from demographic segmentation and geographic segmentation because it’s less concerned with someone’s age, how much they earn or in which zip code they reside. It differs from psychographic segmentation because it’s not concerned with their personality, values, opinions, attitudes or lifestyles.
Rather, behavioral segmentation in marketing looks at an individual’s actions. A marketer must look at the customer behavior or customer journey of their brand’s target audience. What consumer behavior has been exhibited historically? What are they doing on my website or app recently, or even at this very moment? And what does it say about how we can best serve their needs to make them a potential customer?
It’s crucial to learn the buyer persona of your target market to find the optimal consumer base or market segment to sell your brand. People’s demographics don’t change very often. For example, people move homes on average about every five years. Also, people’s personalities, values and opinions don’t change often either. But what people want and what they need changes all the time—and behavioral marketing can help explain different customers and their purchasing behavior.
Why, as a marketer, does it make sense to rely solely on static segmentation techniques like demographic segmentation and psychographic segmentation in a world where consumers’ preferences and desires are constantly in flux? Answer: It doesn’t. It only made sense when those techniques were the only ones available to us.
But nowadays, with all the customer data our enterprises have been collecting for years—about buying behavior, customer loyalty, customer engagement, audience segmentation and all the different touchpoints across which customers interact with us in real time—generating rich historical and in-the-moment first-party data, powerful behavioral segmentation is not only possible, it’s necessary.
Especially with the power of AI and machine learning, brands can now analyze, predict and act on behavioral data in real time, making segmentation more intelligent and actionable than ever before. Behavioral segmentation is at the core of this shift, enabling hyper-personalized customer experiences that drive long-term loyalty and growth.
When marketers build customer segments, they typically use attributes about the customer to create those segments. For instance, with traditional demographic segmentation, you might generate an email marketing list including all customers aged 29–35 who live in high-income neighborhoods in Georgia. The attributes in this case are age, income and location.
For behavioral segmentation, a whole different set of very powerful attributes is available for creating customer segments:
As we’ve discussed, a behavioral segmentation strategy is very powerful to you as a marketer and can give your brand a distinct competitive advantage in its marketing campaigns. But turning those techniques into reality can be challenging because it requires a level of mastery over your customer data that many organizations have not yet achieved.
To overcome that hurdle, many marketers are turning to customer data platforms (CDPs)—like the CDP provided by Uniphore—to:
Tap directly into cloud data platforms like Snowflake, Databricks, Redshift, BigQuery, and VantageCloud without moving or copying data
Analyze customer behavior and generate actionable behavioral segments using AI and machine learning
Activate those segments through personalized, timely experiences across all marketing, sales and service channels
With AI-powered orchestration layered on top, CDPs help marketers understand not just what customers have done—but what they’re likely to do next. That means more relevant engagement, more efficient spend, and stronger customer relationships over time.
There are a variety of ways to build out a behavioral segmentation strategy. Many companies, such as social media platforms like TikTok and Facebook, have developed strong behavioral strategies using advanced data and algorithms to increase consumer engagement and satisfaction.
By using behavioral data to personalize customer experiences, identify evolving needs, and adapt to real-time behavior, brands can gain powerful competitive advantages.
Reach out to Uniphore’s CDP experts to learn how behavioral segmentation—enhanced by AI—can help you drive deeper loyalty, deliver smarter customer experiences, and grow long-term customer value.
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