# How to Build Customer Segmentation Using Behavioural Data
In the world of modern marketing, knowing who your customers are is only half the battle; knowing what they do is where the real magic happens. Behavioural segmentation allows you to group customers based on their interactions with your brand, enabling you to send the right message at the exact moment it's most relevant.
By moving beyond basic demographics like age or location, you can create marketing campaigns that feel like a personal conversation rather than a generic broadcast, significantly increasing your conversion rates and customer loyalty.
Prerequisites: What You’ll Need
Before we dive into the steps, ensure you have the following ready:- A Website with Tracking: Google Analytics 4 (GA4) installed and running.
- Customer Data Platform (CDP) or CRM: Software like HubSpot, Salesforce, or even a well-maintained Mailchimp account.
- Historical Data: At least 3–6 months of interaction data for meaningful patterns.
- Specific Goals: A clear idea of what you want to achieve (e.g., reducing churn or increasing average order value).
---
Step 1: Define Your Business Objectives
Before touching any data, you must decide what you are trying to solve. Are you trying to re-engage people who haven't purchased in six months? Or are you looking to reward your 'VIP' customers who visit your site weekly? Screenshot Description: You should see a blank document or project management tool where you list 2-3 primary goals for this segmentation project.Step 2: Identify Key Behavioural Touchpoints
Map out the actions a customer takes. In an Australian context, this might include clicking a link in an email, visiting a specific service page (like 'Commercial Plumbing Brisbane'), or adding an item to a cart without checking out. Focus on high-intent actions.Step 3: Audit Your Data Quality
Data is only useful if it’s accurate. Check your CRM for duplicate entries or missing fields. Ensure your GA4 'Events' are firing correctly. If your tracking is broken, your segments will be too.Pro Tip: Check if your website forms are capturing the correct source data. Knowing if a lead came from a local Google Search or a Facebook Ad is vital for behavioural context.
Step 4: Choose Your Segmentation Variables
Common behavioural variables include:- Purchase Occasion: Frequent buyers vs. seasonal shoppers (e.g., Christmas or End of Financial Year).
- User Status: First-time visitors, returning customers, or lapsed users.
- Engagement Level: High (opens every email) vs. Low (hasn't clicked in 90 days).
- Benefits Sought: Customers looking for 'value/price' vs. those looking for 'premium/quality'.
Step 5: Implement RFM Analysis
RFM stands for Recency, Frequency, and Monetary value. This is the gold standard for behavioural segmentation:- Recency: How recently did they purchase?
- Frequency: How often do they purchase?
- Monetary: How much have they spent in total?
Assign a score of 1–5 for each category. Your '555' customers are your champions.
Step 6: Create 'Events' in Google Analytics 4
Navigate to your GA4 dashboard. Go to Admin > Events > Create Event. Set up triggers for specific behaviours, such as 'Viewed Pricing Page' or 'Downloaded Case Study'. These events will form the basis of your segments. Screenshot Description: You should see the GA4 interface with a list of existing events and a blue 'Create event' button in the top right corner.Step 7: Build Your Segments in Your CRM
Go to your CRM (e.g., HubSpot) and navigate to 'Lists' or 'Segments'. Create a 'New Dynamic List'. Set the criteria based on the behaviours identified in Step 4. For example: "Contact has visited /contact-us in the last 7 days AND has not filled out a form."Step 8: Develop Unique Value Propositions for Each Segment
Now that you have your groups, you need to talk to them differently.- The 'Window Shopper': Needs a discount code or a testimonial to build trust.
- The 'Loyalist': Needs early access to new products or a loyalty reward.
- The 'Lapsed Customer': Needs a "We miss you" message with a strong incentive to return.
Step 9: Design Personalised Email Workflows
Use an automation tool to trigger emails based on these segments. If a customer enters the 'Cart Abandonment' segment, an automated email should trigger within 2 hours. If they enter the 'High Spender' segment, a personal thank-you note from the business owner can work wonders.Step 10: Test and Refine
No segmentation strategy is perfect on day one. Run A/B tests on your messaging. Compare how a 'Price Conscious' segment responds to a 10% discount versus 'Free Shipping'. Monitor your open rates and conversion data closely.Step 11: Monitor Segment Decay
Customers move between segments. A 'Frequent Buyer' can quickly become a 'Lapsed Customer'. Ensure your segments are "dynamic," meaning users are automatically added or removed based on their most recent actions.---
Common Mistakes to Avoid
- Over-segmenting: Don't create 50 segments for a database of 500 people. You won't have enough data to make statistically significant decisions. Start with 3–5 core segments.
- Ignoring Privacy: Ensure you are compliant with the Australian Privacy Act. Always include an easy 'Unsubscribe' option and be transparent about how you use data.
- Static Lists: Using a manual CSV export from six months ago is a recipe for disaster. Behaviours change weekly; your data must keep up.
Troubleshooting Common Issues
Issue: My segments are too small. Solution:* Broaden your criteria. Instead of "visited page X five times," try "visited page X at least once." Issue: The data in my CRM doesn't match Google Analytics. Solution:* This is common due to cookie consent and ad-blockers. Use your CRM data as the 'source of truth' for known customers, and GA4 for anonymous website behaviour trends. Issue: Low engagement despite segmentation. Solution:* Your 'Offer' might be the problem, not the 'Segment'. Re-evaluate if your message actually provides value to that specific group.---
Next Steps
Now that you've built your behavioural segments, it’s time to put them to work. Start by setting up one automated email sequence for your most profitable segment.If you find the technical setup of GA4 or CRM automation a bit overwhelming, the team at Local Marketing Group is here to help. We specialise in helping Australian businesses turn their data into revenue.
Ready to scale your local business? Contact us today for a strategy session.