A recent McKinsey article noted that companies that leverage customer behavioral insights outperform peers by an astounding 85% in sales growth and more than 25 percent in growth margins.
Personalization based on behavioral insights in marketing has proven to be a revenue catalyst for many large businesses. Amazon ingeniously recommends a sea of customized product recommendations to users based on their previous purchases, search history, cart value, average order value, and several other metrics.
While data has become a potent currency in an increasingly digital economy today, few companies are leveraging the power of personalization to deliver optimal user experience and drive higher revenues.
Behavioral marketing, also known as behavioral targeting, is the method by which organizations serve audiences’ targeted advertisements and marketing communications on the basis of their digital footprint. This includes customers’ search behavior, geolocation, interests and likes, intent, demographics, cookies, IDs, web analytics, and other insights.
Spotlight your content through Behavioral Marketing
91% of consumers say they are more likely to shop with brands that provide offers and recommendations that are relevant to them. It is no surprise then that technology-driven companies are fast adopting behavioral marketing as a central part of their marketing strategy.
In fact, 86% of companies with high ROI reported that personalization made up 21% or more of their marketing budget.
Many marketers agree that personalization indeed leads to better relevancy, brand building, customer retention and acquisition, and upselling among other benefits.
Behavioral marketing is tailored marketing at its best – behavior-based segmentation of your audiences allows companies to offer relevant, timely, and actionable content that has a high conversion potential. The actions that prospective, or existing, customers take on a website are tracked, and the data is then utilized to target specific users through behavioral segmentation.
Behavior-based segmentation helps companies to approach customers at the right time with the right content on the right channel, nurturing their individual buyer journeys. The strategy works because instead of using batch-and-blast tactics and flooding your customers with generic content, behavioral marketing allows marketers to interact and edit communications in real-time, offering on-point personalization.
So how does it work?
Simply put, behavioral marketing works with massive data collected from a user’s online behavior on the company’s website or analytics platforms like Google and Facebook. The data includes a broad array of web metrics such as web analytics, applications and cookies, search history, IP addresses, webpage viewing times, clicked links and ads, webpage element interactions and more to build user profiles of individual consumers.
The user profiles are a result of all the data points including their geolocation, economic and social context to help marketers fine-tune the content and offers that they are served. The audience ‘segments’ are utilized to provide in-depth personalization of all marketing initiatives including ad banners, product recommendations, special discounts and packs, emails, and more.
As time passes, the data and user profiles keep getting updated in real-time to better understand and meet customer needs.
Who benefits from Behavioral Marketing?
The reason why most successful businesses are paying increasing attention to behavioral marketing is that it not only allows them to target, attract, and retain customers but also enhances their quality of life.
By exposing them to customized content, marketers can engage customers in a way that encourages them to move further down the funnel. The relevancy and personalization of content reap admirable business outcomes, with 93% of businesses experiencing revenue growth using an advanced personalization strategy.
For customers, the buyer journeys become seamless with accurate personalization and spot-on recommendations at exactly the right moment. The fact remains, with so much data at their disposal, it becomes essential for businesses to streamline their data analytics and marketing efforts, and leverage user insights to offer the best brand experience.
Here are some of the benefits realized by employing behavioral marketing-
- Engage customers with targeted and relevant advertisements
- Create personalized messaging at every step of the buyer journey
- Contextualize your marketing communications and content with evolving customer needs
- Upsell and cross-sell other products that may be relevant to your customers, resulting in increased cart values
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Strategies to unleash behavioral marketing potential // Put the power of behavioral marketing to work
We now know that behavioral marketing is one of the most effective marketing tools to improve ROI, disseminate impactful communications, and provide enhanced personalization to customers. Its impact, however, can be fueled by combining other marketing strategies such as remarketing to take customer experience to the next level.
- Targeted email campaigns
Behavioral targeting can be used to create engaging or triggering email responses based on customers’ behavior on your website or app. Some examples of targeted emails are cart abandonment alerts, personalized discount offers, or recommendations for a product or a whitepaper download.
- Retargeting
Remarketing is a commonly used tactic that helps companies identify users who visit their website and retarget them on other platforms such as Google, Facebook, or Instagram through personalized advertisements. Behavioral marketing enables companies to improve brand recall and encourage customers to revisit their website or make a purchase.
- Geolocation-based marketing
A common segmentation metric is the customer’s location. Behavioral marketing allows marketers to create relevant offers based on the users’ location.
The Caveat
With the increasing global concern for data security and the digital identity of users, it is important for companies to ensure that their consumers are aware of and comply with their data collection and usage policies. Not all customers feel comfortable with companies tracking their digital footprint.
While an Accenture survey revealed that 83% of shoppers would exchange data for a more personalized experience. Here, of the one-quarter of consumers who’ve received a personal or invasive brand experience, 64 percent believed it was because the brand had data about them that they didn’t share knowingly or with consent.
Data privacy and ethical usage of consumer data should therefore be a priority for businesses to ensure consumer trust and build brand loyalty in the long run.
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Behavioral Marketing – The best time is now
With the explosive potential that behavior-based marketing promises, over 76% of businesses fail to use it in a way that helps them build a robust marketing strategy. A major cause for this is the missing alignment between marketing and technology.
92% of marketers say customers and prospects expect a personalized experience today, which is why leveraging data to mine nuanced insights about customers needs to be a tech-first initiative. With powerful tools such as marketing automation and predictive analytics combined with behavioral marketing, companies can offer unmatched brand experiences to consumers that are value-driven, timely, and actionable.
