Not all 45- to 55-year-olds with a household income between $50,000 and $75,000 have the same purchase interests and spending habits. For this reason, static demographic data should not be used as the building blocks of a well-defined customer segmentation system. Demographic data may be used to describe customer segments (profiling), but it is much less effective in distinguishing interests and spending habits than customer behavioral data.

Behavioral data goes beyond knowing that a customer has purchased a certain product. It involves capturing customer events and actions over time and using these stored interactions to determine typical behavior and deviations from that behavior.

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