What drives consumer behaviour?
It’s the ultimate question for marketers the world over. It’s no secret that getting inside the mind of your customers is key to capturing their attention, driving sales and building customer loyalty.
But the answer to that question is immensely difficult. There are so many factors that influence our purchasing behaviours.
What was the last thing you bought and why?
On the surface, the answer to that question could be very simple. “I bought a sandwich and a granola because I was hungry”.
But delve deeper and you realise that the answer to that question is far more myriad, complex and linked to our very identities:
Behind this one purchasing decision, there are many factors: location, employment, personality, likes and preferences, lifestyle. And the next person that buys a sandwich from that very same bistro will probably have different motivations for why she chose that particular sandwich and that particular bistro.
What is Individualised Segmentation
Segmentation is nothing new. For decades, marketers have sent targeted ads to their customers based on factors such as their age, gender and purchasing behaviours. Individualised segmentation takes it a step further. It combines multiple segmentation methods to build a much rounder profile of each of their customers.
Thanks to the ease of availability of rich data sets, coupled with advancements in AI, it is now possible to paint a more vivid picture of your customers to allow you to send relevant, targeted messaging and connect with them personally.
Different Types of Segmentation
Demographics are the most basic and generally easiest-to-obtain information. They include age, gender, income level, and education. Location is sometimes included although “geographic segmentation” is a term that is often used separately to describe segmentation by area.
Use in marketing
By itself, demographic segmentation is quite thin, and if brands aren’t careful, they can fall into the trap of appearing to be prejudiced by making assumptions solely based on age and gender. Demographics are the bare bones of individualised segmentation.
However, that’s not to say that demographic segmentation isn’t useful. Far from it. It makes sense that fashion brands target their audiences by gender and life insurance companies segment by age.
Use in customer service
Customer service agents need to be very careful not to offend customers by making sweeping assumptions based on demographics. However, there are times when it can be helpful. For example, agents can be guided to be more patient and offer more assistance to older customers who may struggle to navigate new technologies. Geographic information can help customer service agents direct customers to their nearest store.
Data for Behavioural segmentation derives from the business’s own platforms (their website, social media channels, CRM platform, etc) It includes information such as previous purchases, time spent on each page, what stage they are in the buyer journey, whether they’ve clicked a call-to-action (CTA) button etc.
Use In Marketing
Use behavioural information to build customer loyalty. For example, you can send discounts to customers that have made large purchases, or multiple purchases.
Behavioural segmentation is popularly used for upselling (think automated recommendations i.e. “people who bought this item also bought”) and abandoned cart emails.
Use In Customer Service
Use website behaviour to determine whether the customer is encountering problems on your website, and, if so, direct them to a customer service agent to help them resolve the issue.
Psychographic segmentation goes right into the core of someone’s identity. Psychographics comprises the factors that really explain someone’s motivations: their personality, attitudes, interests, values and lifestyle. That’s why psychographics plays a key part in individualised segmentation.
Historically, this data has been the hardest to quantify, but thanks to AI advancements, that’s changing.
Symanto Psychographics combines our Personality Traits and Communication Style Preferences APIs to build a profile of your customers.
Based on the popular Myers-Briggs theoretical model of personality, Symanto Psychographics can tell you whether a person is driven more by their emotions, or by logic. It can also reveal how customers prefer to give and receive information. For example, whether they prefer to give recommendations, or share experiences.
The best part is that thanks to our advanced natural language processing capabilities, you need surprisingly little raw data in order to understand the psychology of your customers.
A tweet, a social media comment, an email, a chat transcript: any written data that is above 5-10 words is enough to give you accurate and actionable insights into customer psychographics.
Use in Marketing
Psychographic targeting helps you to send on-point messaging that really lands with your audience, increasing click-through rates and conversions.
In a 2017 study on the effectiveness of psychological targeting, Matz et al created ten Facebook ads for a UK beauty retailer. Half used messaging targeted at extraverts, while the other half were targeted at introverts.
After running the ad for seven days, the research found that users were 1.54 times more likely to purchase if they were sent targeted ads that matched their personality type than if they were sent incongruent messaging.
Use in Customer Service
Of all segmentation methods, psychographic segmentation is the best at helping your agents to understand who they are talking to. With psychographic information, customer service agents can adapt their tone of voice (e.g. conversational, or direct) to match the preferred communication style of the customer they’re communicating with.
Individualised segmentation combines all of these methods to give you a deep and thorough insight into your customers’ thought processes and motivations so that you can serve them better.