How to segment customers based on their shopping behaviors

Customer segmentation allows you to make the most of your customer base and optimize communication so that it’s more relevant and personalized. This is especially important when it comes to segmenting customers based on their shopping behaviors. Let’s have a look at how you can use advanced customer segmentation to improve your sales and marketing efforts.

Your customer base can consist of many different segments based on such elements as:

• Shopping behaviors/habits
• Location
• Previous spend
• Demographic characteristics

And more.

The first type of segmentation – the one based on shopping behaviors – is especially important, though. Why? By analyzing past actions, such as 

• Purchasing history
• Product browsing patterns
• Engagement levels on the website, etc.

You can identify distinct customer groups and create more personalized and relevant messaging that resonates specifically with what those customers are interested in or are willing to do. This increases not just the likelihood of conversion but also overall customer loyalty and satisfaction. Additionally, segmentation helps you optimize your marketing spend by focusing most efforts on high-value customers who are more likely to engage with new offers/deals. This way, you can make the most of every marketing dollar you spend in your business.

How does segmentation based on behavior work?

Here, it’s crucial to collect adequate data about each customer. In order to utilize this type of segmentation, you need some sort of a system that will track the activity of various customers on your website (and probably with your customer service department as well) and automatically collect information that can be used in future marketing/sales campaigns.

You can do so on auto-pilot with iPresso. Our system can be easily integrated with your online store or website and track all the interactions that take place there. Here’s an example: Suppose you want to create a special offer for your customers living in London. Let’s assume you have a product that’s available in your store located in this particular city.

Our system will help you identify customers who:

1. Live in London and
2. Are loyal customers who should be rewarded for sticking to your brand

iPresso’s algorithms will analyze your database to find people matching both conditions. As a result, you end up with a ready-made list of regular customers living in London:

Now, you can use this list to create tailor-made messaging and offers that will resonate with this specific customer group. And because everything is tailored to the interests and characteristics of this group, it is very likely that the conversion rate from this campaign will be very high.

Of course, it’s just an example; you can create many different segmentation scenarios based on your business profile and the information you collect about your customers/users.

What are the benefits of customer segmentation based on behavior?

We’ve already mentioned the most important benefit – the potential to create more successful marketing campaigns. But there’s more. With effective customer segmentation, you can:

• Build loyalty and increase client retention: Customers value brands that approach them with tailor-made communication and offers. This way, you can not only increase sales but also user experience (UX) and win even more loyal customers.
• Streamlined testing: You can use different customer segments for testing purposes to identify what works well and what doesn’t. This way, you can also save a lot of time and money in the long run, because you can focus your efforts on the best-performing customer segments.
• Get to know your audience better: iPresso can tell you a lot about your customers’ characteristics and behaviors. This knowledge allows you to understand your customers even better and tailor your offer, website, and messaging to their needs and interests.
• Identify the best communication channels: One of the elements you can analyze are the traffic sources in your business. This also enables you to focus your efforts on marketing channels that perform best.

What industries should use segmentation based on behavior?

The simplest answer is all those where customer behavior matters, but there are at least four industries where such form of segmentation is especially important:

• E-commerce: Here, behavioral segmentation focuses on customer actions such as purchasing history, product browsing patterns, and cart abandonment. With this input, you can create personalized offers and product recommendations as well as target customers with retargeting ads based on their shopping behavior.
• Finance: Financial companies use segmentation to analyze transaction history, credit behavior, and account activity. Banks and other financial organizations use this data to offer tailored products, such as loans or investment options, to customers with specific financial behaviors or characteristics.
• Education: Schools and universities segment students based on their learning behaviors, course completion rates, and engagement with educational materials. This enables you to provide students with personalized learning paths or specific course recommendations.
• Travel: Companies operating in this sector use behavior indicators such as booking patterns, travel frequency, and preferred destinations to offer tailored deals, loyalty rewards, or personalized trips, thus enhancing customer experiences and increasing sales.

Use iPresso to segment customers with ease

iPresso is a marketing automation platform that provides you with everything you need to stay in touch with your customer base and segment customers effectively. One of our features is the Segmentation Wizard. With this tool, you can create diverse customer segments, even with a very specific description, based on their attributes, previous actions and activities that are automatically assigned to your contacts.

Take a look at this example:

A company operating in the food industry can use customer segmentation based on behavior to communicate differently with vegetarians and people who are ok with eating meat products. These two groups have vastly different needs and interests; sending them the same recipes/food recommendations would most likely result in both groups being dissatisfied with your communication.

Interestingly, in this example, the segmentation based on behavior is the only one that makes sense. Other characteristics can relate to both vegetarians and non-vegetarians.

Once those segments are created, you can use them to run marketing/sales campaigns and perform other marketing-related activities (e.g., website content automation). For example, you can use those new customer segments to design new customer journeys in your company, thus achieving an even higher level of experience personalization.

Wrapping up

If you’re not yet utilizing customer segmentation in your business, we encourage you to start doing so right away! Thanks to this simple yet effective strategy, you can increase sales and win more loyal customers who are happy with what you offer them.
iPresso is your one-stop shop for all the segmentation and personalization needs. We invite you to give our platform a try to see how our features can help you run a more successful business. And we have a free 30-day trial access for you (no credit card needed!) so that you can see our platform in action. All you need to do is send this short form, and we’ll handle the rest!