Have you ever done a quick search on getting away for a long weekend and suddenly started seeing digital ads for last-minute travel deals? Have you ever logged into Amazon and been greeted with suggestions that are just your cup of tea? You see these ads because of the actions you’ve taken on the Internet. These are just a couple of examples of behavioral marketing, which has completely changed how successful companies interact with their customers.
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How Is Behavioral Marketing Different?
Before the digital era, marketers spent a great deal of time and resources reaching people who had no interest in what the companies were selling. A lot of marketing was broad-brush, such as advertising on TV, radio or newspapers to large, broad audiences, or posting billboards along the highway. Now, this kind of marketing still exists and might work very well for big brands such as Coca-Cola. However, it doesn’t work as well for something like a niche gaming software.
Once marketers could market on the web, they were able to track where a customer went on their website and how many pages they visited. This was valuable information that informed marketers generally what might interest a customer but still didn’t allow for great personalization of marketing messages.
Today’s digital marketing, with its use of big data and increasingly accurate analytics, offers a brave new world of enabling marketers to reach their target market with a laser focus. Behavioral marketing, also known as behavioral targeting, allows you to reach those who’ve shown interest in your products and services or related products and services — now you can target audiences based on their behaviors. For example, you can follow customers on the Internet and show them ads for the exact products they viewed. This goes far beyond simple demographics. The win-win is that not only can you increase your sales by getting in front of the right audience, but you can also build customer loyalty by personalizing the customer experience.
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Behavioral Marketing Segmentation
To successfully employ behavioral marketing, you need to segment your audience as narrowly as is practical. Behavioral marketing depends on gathering massive amounts of data about individual customer behaviors, analyzing it for patterns, and segmenting your audience to deliver personalized messages to your audience according to their interests, needs, and likelihood to buy. You can provide personalized ads and emails, for example.
With the help of sophisticated tools, marketers gather browsing history, search history, where they came from, where they went, how long they spent on specific pages, location information, and IP addresses. Once you can track a customer, you can gather more and more data as you trace their behaviors on the web to deliver an increasingly personalized and satisfying customer experience. There are almost endless ways to do this, but the following are some of the most common.
If a customer bought something on your site, that’s the most definite proof of where their interests lie. Ask yourself:
- What did they buy?
- How many purchases have they made?
- Are the purchases related?
- What is the average price of each order?
- Do they tend to buy at a particular time?
- Do buying behaviors of multiple customers suggest bundling certain items?
Time spent on your site
How much time are customers spending on your site? Did they just land and move on, or did they spend an hour browsing your offerings?
What did your customer look at on your site? Is there any relationship between the items? What’s the percentage of time spent viewing each category?
New prospect or return customer
If your customer is new, you may want to offer them suggestions that’ll guide them through your site. If your customer a repeat one who’s purchased before, you may want to reward their loyalty with a special offer on a product related to one they’ve already purchased. Note that these are only examples — the more you understand your customer’s relationship with your company, the more you can personalize their experience.
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Did your customer come to your page through a search? Their search will give you a clue of what’s important to them, which might be a different feature or benefit from that of another customer.
Origin and exit
Did your customer jump to your site from another site? Is there a relationship? Should you be looking at specific sites as possible places to advertise? Where did your customer go after they left your site? These behaviors give you valuable insights into your customers’ interests.
If your reach goes beyond your local area, you need to keep in mind how the location of an audience segment affects their buying. What’s the local weather, and how would that affect purchases in a location? Should you be featuring snowboards or surfboards this month? Also, research what significant events may be coming up that could affect buying patterns for some products. This could be anything from opera galas to big ball games.
Your customers can engage with you far beyond your website. For example, do they comment on or like your social media posts? On your site, engaged customers might download information, give product reviews, or sign up for newsletters.
Some customers tend to buy more according to the season. For example, one customer might only shop for Christmas presents, while another makes multiple annual purchases to refresh their summer wardrobe.
On how to build an effective behavioral targeting strategy:
The Connection Isn’t Always Obvious
Some uses of behavioral marketing are apparent. If you have a home decorating website and someone looks almost exclusively at doorknobs, you know to show them ads with doorknobs not only on your site but as they travel the web. However, you may unexpectedly find that these same customers also buy a lot of cookware and cooking utensils, which at a glance might seem unrelated. Data analysis can show us correlations that aren’t always obvious or intuitive.
A commonly cited example of this is a practice that was used at one time by Orbitz. When Orbitz analyzed its customer data, it found that its customers who used Macs spent a whopping 30% more per night on hotels than its customer who used PCs. Not surprisingly, Orbitz proceeded to feature higher-priced hotels to Mac users.
What Makes Behavioral Marketing Possible? Marketing Automation
The human brain couldn’t possibly analyze the vast amounts of data that make detailed behavioral marketing possible. That’s why marketing automation that relies on artificial intelligence (AI) and machine learning has become the backbone of today’s analytics-driven behavioral marketing. Increasingly sophisticated marketing automation enables more personalized experiences for customers.
Gathering and analyzing big data must be weighed against increasing privacy concerns. There are hundreds of laws affecting Internet privacy, but two that have recently been in the news are the California Consumer Privacy Act (CCPA) and the General Data Protection Regulation (GDPR). The goal is to create a more enjoyable experience for your customers not to intrude on their privacy.
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