Market segmentation is used in several ways by tons of different businesses. You can take a closer look at the different ways to segment a market here and the benefits of market segmentation here. Each of the four main market segments has its own advantages, but behavioral segmentation reaps huge rewards. It is a powerful tool and is particularly popular in B2B organizations. And, it is a significant step companies must take if they are looking to implement an ABM strategy or introduce personalization in the future.
Sometimes the best way to gain an understanding of what works is by looking at the brands that are doing it right! Here are 5 behavioral segmentation examples from companies that are leading the way in segmentation for personalization. Let’s explore!
Netflix — product recommendations that work
Households using Netflix have increased by 92% in the past five years, according to Entrepreneur. The streaming service takes in-app personalization to the next level, with each user receiving an entirely unique experience. Being notified of the content that matters to you and presented recommendations based on your behavior work like a charm. In fact, according to Business Insider Australia, Netflix believes its personalized recommendation engine could be worth around $1 billion. And, the vast majority of its customers are impressed by it — with 80% of Netflix views coming from recommendations! Netflix takes control of its data, gains an understanding of its customers, and feeds them exactly what they are looking for.
Amazon — leading the way in personalized ecommerce
“If you do build a great experience, customers tell each other about that. Word of mouth is very powerful.” – Jeff Bezos, Founder of Amazon.
Now a household name, Amazon leads the way in personalization through segmentation. Product recommendations, reminders of what is in a user’s basket, prompts about who else is buying or how many are remaining are not random. Neither are the suggestions of products ‘you may also like’, or ‘frequently bought together’. These are tailored perfectly to customers based on previous purchase behavior, buyer journeys and the data you give Amazon every time you use the site. According to Statista, 95 million people have Amazon Prime memberships in the US, and on average, users with a Prime membership will spend $1.4K. So, it is safe to say that Amazon is doing something right!
Coca Cola — owning Christmas and providing products for everyone
“When you’re comfortable, the temptation to quit taking risks is so great, it’s almost irresistible. And failure is most inevitable.” – Don Keough
The market for soft drinks is huge. But that doesn’t mean a one-size-fits all marketing approach works. Coca Cola proves that segmenting even the largest of audiences is important. According to Brandon Gaille, Coca Cola makes enough beverages to be able to drink a different one every day for nine years! So, there is an enormous range of products available. The Coca Cola Christmas advert is widely anticipated by thousands — and works to associate the brand with an occasion celebrated all over! The brand even took personalization marketing quite literally with its #ShareACoke campaign, encouraging customers to purchase a drink with their name on it. A great way to target impulse buyers!
Sephora — proving loyalty is everything
“When we think about our clients, we know that they don’t just go into the store and buy something. There is a journey.” – Angel Singh, Director of product analytics and optimization at Sephora.
Loyalty matters. Especially when it comes to beauty brands. In fact, according to Cora, 20% of those surveyed had not switched makeup brands for more than a year. And, almost a quarter of those surveyed never switch brands when purchasing eyebrow pencils. Beauty industry leader Sephora offers a loyalty program, Beauty Insider, which helps define customer loyalty by brand, market and channel preference. This way their customers can receive a truly personal marketing approach. Points are redeemed for every dollar spent, and rewards and gifts are available. According to Retail Dive, loyal customers make up around 20% of Sephora’s customer base, so keeping hold of them is crucial!
Nike — a multi-platform experience
“Nike is a marketing-oriented company and our product is our most important marketing tool.” – Phil Knight, Co-Founder and Chairman of Nike.
A market-leader in activewear, Nike takes behavioral segmentation to the next level using a multiplatform approach. The Nike Run Club app collects data on the runner’s achievements and recommends running shoes based on this information. The brand also boasts a ‘Reserved For You’ feature, which ‘reserves’ a product in the customer’s size and presents them with an invitation to buy. An easy option for busy customers on-the-go! Nike’s strategy focuses on promoting the benefits of the products rather than just the features, which gives customers all the information they need to make a purchase without aggressive marketing tactics.
Behavioral segmentation is at the heart of all successful personalization. Tailoring communications and products to meet specific needs is all about giving users a bespoke marketing experience and increasing their chances of returning. All the companies explored have benefited greatly from segmenting their audiences and have provided enjoyable user experiences for their customers along the way. According to Evergage, 77% of consumers have chosen, recommended or paid more for a brand that provides a personalized service or experience. And, 59% say that personalization impacts their purchase decisions. As a B2B business, it is crucial to remember to treat each business as an individual with their own personalized preferences.
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