Segmentation Strategy: Why You Should Leverage Behavioral Data
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Segmentation Strategy: Why You Should Leverage Behavioral Data

September 10, 2019

Becca Brown

Segmentation is an essential driver of any consumer or customer-centric strategy. Here’s how building behavioral data into your segmentation strategy can help boost customer engagement and acquisition, increase conversion and retention, and fuel targeted marketing.

Custom survey data consistently allows us to uncover the “why” behind consumer motivations, their drivers of choice. The synergy between survey data and sales data has always been a powerful one, highlighting the way brand perceptions can impact a bottom line. Now, we’ve entered a new era of unprecedented access to behavioral data — records of actual consumer action — allowing brands to tie the “what” and the “why” together in ways we couldn’t have imagined fifteen years ago. With an ever-expanding pool of behavioral data within your reach, the question is no longer will you incorporate additional data streams into your research — but which data streams will you choose?

This is especially true when it comes to your customer segmentation strategy. For many brands, segmentation is the biggest piece of research in a budget in any given year. It’s important to get it right, and building in the right data can give you a deeper understanding of consumers’ actual behavior.

Here are a few of our favorite behavioral data sets to integrate into your segmentation research, and ultimately segmentation strategy:

  1. Customer data

As a part of our foundational approach to segmentation, we always recommend incorporating a subset of your existing customers alongside all of the data you maintain for them. That means everything from frequency of email opens, to number of lifetime purchases, to loyalty tier — always start with more!

What it means for activating your segmentation strategy:  Integrating behavioral data from your existing customers allows you to round out customer profiles and leverage look-alike modeling to predict the attitudes — and therefore segment assignments — for the rest of your customer database. From there, you can refine your CRM (Customer Relationship Management) and DMP (Data Management Platform) strategies to reach these newly created audiences with personalized messaging — an effective way to boost customer engagement and acquisition.

  1. Click-stream data

Many brands collect information on which pages/sites their consumers are visiting, and the path they take to get there. This is clickstream data. While looking at each action on its own might sound daunting, analyzing these actions holistically can uncover invaluable learnings about how consumers are interacting with your platforms and which features they value most.

What it means for activating your segmentation strategy: By optimizing your brand’s platform features and overall experience based on segment usage and preferences, you can increase conversion and retention.

  1. In-store and online purchase data

Merging brick-and-mortar purchase data with online purchase data gives us a 360-degree view of  consumers’ buying habits and decisions. Partnering with a panel that carefully captures all of its consumers’ purchase data gives you a holistic understanding of the way attitudinal engagement with your brand plays out in the actual marketplace.

What it means for activating your segmentation strategy: Including consumers’ total purchase data in your segmentation allows you to do many things, including:

  • Measure product-level nuance for your brand and others in the category in order to fuel innovation and gauge opportunity for product expansion.
  • Gain a holistic view of how and where consumers are shopping your category, including the role of white label.
  • Understand how your brand and category fits into consumers’ total share of wallet, and how frequency/engagement of purchase stack up to brands outside of the category.
  • Identify opportunities for brand partnership, sponsorship, and cross-promotion.
  1. Third-party data

There are many companies you can partner with for access to data aggregated by third parties. This data provides robust profiling within your category and far beyond. Pairing it with consumer survey data gives you the opportunity to explore profiling by any available subgroup — in this case, your newly created segments.

What it means for activating your segmentation strategy:  The biggest implications to this approach are around targeting, since an in-depth understanding of consumers’ online behavior will significantly expand your accuracy in reach (and, ultimately, brand presence) among your most-valued segments.

Whether it’s media planning and targeting, product development and innovation, or messaging you wish to build around your new consumer segments, there’s a treasure trove of behavioral data available for you to incorporate in your segmentation research and segmentation strategy in order to make sure your outputs are nuanced and grounded in meaningful insights.

Already have a segmentation you love, but it doesn’t leverage behavioral data? Not a problem! While there’s opportunity to build the approaches outlined above directly into a new segmentation, many brands opt to do so on the back end, following up with their target segments once the heavy lifting of building the segment architecture is complete.

Becca Brown

Senior Director, Insights & Strategy

As Senior Director of Insights & Strategy, Becca has a passion for understanding what drives consumer behavior and choice, and turning that insight into action for her clients. With over 8 years...

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