- Circana
- Dec 9, 2025
- 4 min read
Anoj Perera, Senior Director, Client Sales and Insights, Marketing and Media
Steven Tramposch, SVP Client Consulting, Marketing and Media
Table of Contents:
Understanding your customers is Selling 101. Brands have long recognized that knowing who buys their products is fundamental to driving growth, but it’s often easier said than done and is not a one-size-fits-all proposition.
Audience segmentation based on purchase behavior can provide the information needed to refine marketing strategies, deliver on personalization, and ultimately boost sales and profitability. By grouping consumers based on their buying habits, CPGs can move beyond broad messaging and connect with key audience segments.
What Are the Key Types of Purchase Behavior Segmentation?
Marketers segment customers based on purchase behavior in several ways. The primary objective is to drive ROI against media spend by targeting the right households with the right message.
One type of customer segmentation involves grouping people into categories such as heavy, medium, and light users. Segmenting by buyer status allows brands to tailor their efforts; for example, a campaign might focus on enticing medium buyers to increase their purchase frequency.
Another segmentation approach is based on customer loyalty. Brands can direct tactics to retaining loyal buyers and also use data to target lapsed buyers. Brands can also use forms of marketing segmentation to attract new buyers. After identifying households that do not currently purchase a product, companies can create a compelling narrative to encourage trial. Variables can be as simple as whether a customer has purchased a product or as complex as analyzing purchase frequency and expenditure.
A different type of purchase behavior segmentation involves identifying and targeting consumers of competing products. Here, messaging is focused on how and why your product is better. This kind of competitive conquest tactic is especially effective in highly competitive categories like energy drinks.
How Does Purchase Behavior Data Drive Personalization and Customer Retention?
Purchase behavior data is key to providing personalization and subsequent retention via the right message at the right time. Tailored communication and targeted incentives create meaningful connections with each segment, driving effective customization.
For example, messaging to existing customers can be simple, focused on reinforcing choices and maintaining loyalty. As one might expect, retention is often easier and more cost-effective among this group.
Reaching new consumers requires compelling, tailored messaging and sustained effort. After all, these buyers are either using a competitor’s product or are not in the category at all.
To engage with these potential consumers, companies must communicate in a personal way that captures attention and then repeat that message multiple times to gain traction. Customizing messaging with different content and creative for each group breaks through the noise to spark sales.
How Different Industries Benefit from Purchase Behavior Segmentation
The application and effectiveness of purchase behavior segmentation vary across industries. In the CPG industry, segmentation depends on product type and brand maturity.
For fast-moving goods, like soft drinks, the battle is for every trip to the store. For other categories like over-the-counter medicine, the challenge is competing against private labels, where customer switching is less frequent. Other industries use behavior-based segmentation differently. The automotive industry, for instance, excels at using purchase behavior segmentation. Automakers possess a wealth of first-party data on their customers. They can track ownership history within a family and predict when a household might be in the market for a new vehicle. By combining this data with in-market signals like online search behavior and dealer visits, they can execute highly personalized campaigns to retain loyal customers and lure buyers from competitors.
Challenges and Common Mistakes in Behavioral Segmentation
Purchase behavior segmentation is powerful, but brands must be strategic to avoid common mistakes that can render their efforts ineffective.
One of the most significant errors is creating segments that are too broad. Targeting shoppers for a product nearly everyone buys, like toilet paper, is not a useful segmentation strategy. The behavior is not unique enough to provide a competitive advantage.
Microtargeting is on the other end of the spectrum. This kind of narrow segmentation can result in the creation of dozens of tiny audiences that are difficult to measure and execute against. This approach rarely yields a positive financial return because the impact is too small and managing distinct, mutually exclusive audiences is overly complex.
The “just right” approach is to find the middle ground. Defining behaviors that are unique enough to be meaningful but broad enough can have a tangible impact on outcomes.
Another common challenge is the failure to act on the segmentation. As noted, many brands invest in identifying precise audience segments but then deliver a generic message to all of them. This wastes the opportunity that segmentation provides.
How Brands Can Implement Behavioral Segmentation
Effective implementation of purchase behavior segmentation starts with a clear strategy established before launching a campaign. A defined North Star, such as improving sales or driving ROI, should be shared across the organization to align teams, from brand managers focused on reach to sales teams focusing on ROI.
After a strategy is agreed on, brands can work to define their segments, taking care to identify behavioral variables that create unique and actionable groups. In addition to avoiding overly broad or narrow targets, CPGs can succeed by zeroing in on behaviors directly linked to business objectives, such as re-engaging lapsed buyers or siphoning a competitor’s customers.
Messaging to each segment should be distinct. Again, campaigns aimed at retaining a loyal customer should be different from one intended to attract a new buyer.
Testing is part of effective customer segmentation. In today’s dynamic and rapidly-changing market, brands benefit by testing different approaches and refining segments based on performance data.
Optimize Segmentation with a Trusted Partner
As a leader in providing technology, AI, and data to fast-moving consumer packaged goods companies, durables manufacturers, and retailers seeking to optimize their businesses, Circana helps brands connect with consumers at the right time and in the right way. Our targeting solutions, for example, are built on verified, real-world purchase behavior, not assumptions. By segmenting audiences based on what consumers buy, you can focus marketing on the consumers most likely to take action. This level of precision increases efficiency and fuels results.
