Engagement-Based Segmentation is a method of categorizing customers based on their interaction levels with a brand. Unlike traditional demographic segmentation, this approach focuses on behavioral data, such as email opens, website visits, purchase frequency, and social media activity. Businesses can classify customers as highly engaged, moderately engaged, or inactive and adjust their marketing strategies accordingly. For example, high-engagement users may receive loyalty rewards, while inactive users may receive reactivation campaigns. CRMs like HubSpot and Salesforce provide tools for tracking engagement and segmenting audiences. This method improves personalization, increases conversions, and enhances customer retention strategies.