Customer Behavior Segmentation

Aashish Kasma|3/17/2021, UTC|3 MIN READ|
//Customer Behavior Segmentation


Table of content:

1. Benefits sought

2. Occasion or timing-based

3. Usage rate

4. Brand loyalty status

5. User status

6. Customer journey stage

RFM model


The first step of conducting Customer Behavior analysis is to segment your customers as you'll want to identify the characteristics of customers who are the most valuable to your business. Typically there are six types of behavioral segmentation:-

  1. Benefits sought

    When a customer is looking to buy a product or service their behavior can reveal what benefits, features, or values are most important when making a purchasing decision. For example, a customer buying a jacket may be buying one based on the price, material, color, etc... Any of these benefits sought can be motivating factors to a customer and influence their purchasing decision.

  2. Occasion or timing-based

    Occasions can be universal or personal. Universal occasions such as holiday sales and discounts apply to all the customers equally and signify a time when customers make more purchases. Personal occasions can be recurring such as buying groceries every week or rare such as buying a wedding gift.

  3. Usage rate

    The frequency with which customers use a product is another way to apply segmentation. Usage rate signifies customer loyalty or churn and overall customer lifetime value.

  4. Brand loyalty status

    Loyal customers are extremely valuable to a business because they are less costly to retain and have the highest lifetime value. By analyzing customer behavior data customers can be segmented by their level of loyalty. And loyal customers can be given special privileges such as special discounts or loyalty rewards.

  5. User status

    Different customers have different user status such as:

    • Non-users
    • Prospects
    • First-time buyers
    • Regular users
    • Defectors
  6. Customer journey stage

    Segmenting customers based on where they are along their customer journey map can help you understand potential roadblocks they’re facing and why they are not progressing forward to purchase.


Besides the typical way of customer segmentation, there is another way to segment customers called the RFM model.

RFM stands for Recency, Frequency and Monetary Value. 

  • Recency = how recently a customer placed the last order on your website
  • Frequency = how many times a customer purchased something from your website in a specific period of time
  • Monetary Value = how much each customer spent on your website since their first order


You cam use RFM model to segment your customers in the following ways:

  1. Manually: By manually reporting customer data in a spreadsheet and then segmenting the customer based on RFM rules.
  2. Automatically: By using tools like Tableau that can create RFM dashboards.


This may be one of the most important and critical business activities you ever do so do not skip the process of segmenting your customers! 


Read our other articles in our Series on Customer Behavior Analysis & Segmentation:


Lucent Innovation is a full-service Shopify web design and development company. We build ecommerce websites that are ready to sell, scale, and grow.

Contact us for your next project:



Aashish Kasma

Looking for



Lets Discuss

Why Lucent...



Learning comes not only with training but it comes as we facilitate the learning of the organization as well as individuals and the clients continuously refurbishing ourselves.



We believe in Innovation and have started our company based on that concept. When you don't transform you become stagnant.
Innovation arrow Transformation
arrow Growth.


Team Work

We work efficiently as a team. We self-monitor. We deliver results efficiently with the help of multiple perspectives and skill sets. We form strong working relationships as we communicate well with each other.

Lucent innovation
We are a family filled with talented experts that help global brands, enterprises, mid-size businesses or even startups with innovative solutions.
Accelerate your tech projects with us. Get in touch with us.
Follow us
lucent innnovation: cltuch

Lucent Innovation, © 2023. All rights reserved.Privacy policyDMCA compliant image