I receive an average of 56 promotional emails in one day through my personal Gmail account. I expected the number to be higher, but if you consider the emails marked as spam, it’s pretty outrageous! That’s just one marketing channel; if I open Instagram or Facebook, I’m swimming (drowning?) in a sea of promotions.
The over-saturation of advertisements is frustrating for both the consumer and the marketer. If you want to offer consumers a meaningful experience with your brand and stand out from the crowd, you have to understand your consumer. That’s where behavioral marketing comes in.
What is Behavioral Marketing?
It's a way for businesses to connect with their target audience on a deeper level by understanding how they think and act. So, instead of just sending out generic messages, they can deliver relevant and exciting content to each individual. It's a pretty smart way to stand out and make a lasting impression.
Behavioral marketing is a technique that uses consumer behavior data to tailor marketing efforts toward specific individuals. It involves analyzing consumer activities, such as browsing and purchasing history, to understand their preferences, motivations, and habits. This information can be used to create personalized marketing campaigns that resonate more effectively with each target audience.
What Are The Benefits of Behavioral Marketing?
Enhance Customer Experience
The most obvious and significant benefit of behavioral marketing is its positive impact on customer experience. It can result in more engaging marketing communications, leading to higher customer satisfaction, loyalty, and trust in a brand. Customers don’t want to feel like they’re being sold something. They want a need fulfilled in the most human (personalized) way possible. A retailer that uses behavioral marketing may recommend products based on a customer's browsing history or offer special promotions based on their purchasing habits. This personalized experience is much more likely to keep customers returning for more.
Improve Conversion Rates
Personalized marketing campaigns are more likely to result in conversions because they are tailored to each individual's specific needs and interests. An online clothing retailer may use behavioral marketing to recommend items to customers based on their past purchases and browsing history. This type of targeted marketing is much more likely to result in a purchase than generic promotions.
Save Time and Resources
Focusing marketing efforts on individuals most likely to engage with a product or service results in a more optimized marketing budget and increases the return on investment (ROI). You are no longer wasting resources on marketing campaigns that are not likely to resonate with your target audience.
Enhance Customer Loyalty
If you improve the customer experience, you create a memorable encounter and, in turn, evangelists. Bingo! By providing a personalized experience, businesses can foster customer loyalty and increase the likelihood of repeat purchases.
Types of Behavioral Marketing
Brands use customer data to send targeted email campaigns based on customers' past purchases, interests, and behaviors. Behavioral list segmentation is underutilized, but it’s a great way to increase your CTR. When it comes to email marketing, the more personalized, the higher the conversions.
Abandoned Cart Emails: This is a great example and one of the most common uses of list segmentation in B2C marketing. When website users add a product to their cart and leave the site, an automated email is triggered that reminds the consumer to checkout and attempts to prove further the value of those abandoned items to nudge a sale.
Create targeted advertising campaigns based on consumer behavior data. Advertisers target individuals based on their search query by placing ads relevant to their search terms.
Retargeting Ads: This involves showing ads to individuals who have previously visited a website or interacted with a brand online. You probably get these a lot - you visit a website and receive an ad as soon as you hop on Instagram for the same product.
Behavioral marketing can be used to optimize a website based on consumer behavior, such as which pages they visit the most and which products they show the most interest in. With stricter privacy rules, marketers find tracking this information more difficult.
E-commerce websites use data about a customer's past purchases and browsing behavior to recommend similar products.
Product Suggestions: If you’ve ever purchased a product online and received a pop-up of “other products you’ll love!”, you’ve experienced behavioral marketing. It’s an incredibly successful tactic. According to Mckinsey & Company, cross-selling tactics like product suggestions can increase sales by 20% and profits by 30%.
This type of marketing targets individuals based on their location, using GPS data from their mobile devices. This is used in advertising and other forms of marketing to dial in the audience with a higher likelihood of converting based on location.
Behavioral Marketing Segmentation
There are several ways to segment an audience for behavioral marketing, and the methods will differ depending on your company and industry. Here are some standard segmentation methods:
- Demographic: Characteristics such as age, gender, income, education, and location.
- Psychographic: Personality, values, attitudes, interests, and lifestyle.
- Behavioral: Actions and behaviors, such as purchase history, website behavior, and response to past marketing campaigns.
- Geographic: Location, such as region, city, climate, or population density.
- Firmographic: Company-related characteristics, such as industry, company size, and revenue.
- Technographic: Technology usages, such as software and hardware.
- Occasion: Specific events or occasions, such as holidays, seasons, and special events.
- Benefit: Benefits customers seek from a product or service, such as cost savings, convenience, or status.
Behavioral marketing is a powerful tool for businesses looking to improve their marketing efforts. Companies can use consumer behavior data to tailor marketing campaigns to enhance customer experience, improve conversion rates, save time and resources, and foster customer loyalty. With the rise of big data and advanced analytical tools, the possibilities of behavioral marketing are virtually limitless. By leveraging the power of consumer behavior data, businesses can gain a deeper understanding of their target audience and create more effective marketing campaigns that deliver results.