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What is Behavioral Marketing
Behavioral marketing is an approach based on consumer data and insights that delivers more personalized marketing messages. It analyzes customer behaviors and preferences to create a more effective marketing strategy.
How Behavioral Marketing Works
The main principle of behavioral marketing is to detect and respond to customer actions, and the aim of this principle is to deliver a more relevant experience for each user. This approach generally includes the following stages:
- collecting data from various touchpoints (websites, apps, emails)
- analyzing customer behavior patterns
- segmenting audiences based on these patterns
- creating a content tailored to each segment
Businesses typically follow these steps to engage their target audience more effectively, and eventually to improve results and customer satisfaction.
Importance of Behavioral Marketing for Businesses
As we have learned what is behavioral marketing, now let’s see why is it important for modern businesses:
- it delivers a better experience for customers
- improves conversion rates
- increase customer retention
- optimize marketing budgets due to focusing on high-potential leads.
Statistics show that those personalized experiences, that behavioral marketing creates, can lead to:
Behavioral Marketing vs. Traditional Marketing
Key Differences and Similarities
Both marketing strategies influence consumer behavior in order to increase profit, however, they have these key differences:
| Aspect | Behavioral Marketing | Traditional Marketing |
| Targeting | Based on individual behavior | Based on broader demographics |
| Personalization | Highly personalized | Generally one-size-fits-all |
| Data Usage | Relies heavily on customer data | Limited use of customer data |
| Timing | Real-time or near real-time | Often planned far in advance |
| Flexibility | Highly adaptable | Less flexible |
Alt: behavioral marketing vs traditional marketing
Why Behavioral Marketing is More Effective
Behavioral marketing outperforms traditional marketing because it:
- delivers more relevant content to consumers
- adapts quickly to changing customer preferences
- has a better return on investment (ROI)
- is more engaging for customers
Another proof, of its advantage over traditional marketing is the statistic found by Invesp, that behavioral email campaigns have 30% more open rates and 50% more click-through rates than those emails that are not targeted.
Types of Behavioral Marketing
Retargeting and Remarketing
Retargeting/remarketing is a behavioral marketing approach, when ads are shown to users who have already interacted with a brand in some way (visited a website, app, etc.). This is the method to keep the brand in users’ minds and encourage them to take action.
Example: A user of an ecommerce website might look at a product and then decide not to buy it and later, they will see an ad for that product on social media.
Geolocation-Based Behavioral Targeting
Geolocation-based behavioral marketing uses a customer’s physical location to deliver relevant marketing messages.
Key benefits:
- Increases relevance of local offers
- Improves foot traffic for brick-and-mortar stores
- Enhances overall customer experience
Example: A coffee shop app sends a discount coupon when a user is near the store.
Predictive Behavioral Targeting
Predictive behavioral targeting leverages machine learning to use historical data and forecast future consumer behavior.
How it works:
- Analyze past purchase patterns
- Identify common characteristics of high-value customers
- Predict which products or services the customer may next need.
Example: An e-retailer suggests related complementary products on the basis of customer browsing and purchase history.
Behavioral Marketing Examples
Every user encounters behavioral marketing examples in their everyday lives, some of the most famous examples are:
- Netflix’s recommendation system
- Analyzes viewing history to suggest new shows and movies
- Result: 80% of viewer activity comes from personalized recommendations
- Amazon’s product recommendations
- Uses purchase history and browsing behavior to suggest products
- Result: Almost 35% of Amazon’s revenue is generated through its recommendation engine
- Spotify’s personalized playlists
- It creates playlists based on the user’s listening habits (Discover Weekly, etc.)
- Outcome: Increased user engagement and subscription retention
- Starbucks’ mobile app
- Offers personalized deals based on purchase history and location
- Effect: Contributed to a 26% increase in mobile app revenue
These examples perfectly show that behavioral marketing can boost user engagement and business results in many different industries.
Benefits of Behavioral Marketing
Behavioral marketing offers a number of great benefits, really making a difference in the bottom line and customer relationships of the business. A look at some key benefits:
- Improved Customer Experience
- Tailored content and offers
- Reduced irrelevant messaging
- Higher Conversion Rates
- More targeted campaigns
- Increased relevance leads to better response rates
- Enhanced Customer Loyalty
- Personalized experiences foster stronger connections
- Better understanding of customer needs
- Optimized Marketing Spend
- More efficient use of marketing budgets
- Higher ROI
- Data-Driven Decisions
- Insights from behavioral data inform strategy
- Real-time improvement based on feedback
A study by McKinsey shows the power of behavioral marketing: companies that apply customer behavioral insight perform 85% better than their peers in terms of sales growth.
Tools Used for Behavioral Marketing
- Google Analytics
- Tracks website behavior
- Provides insights on user interactions
- Mixpanel
- Offers advanced user behavior analytics
- Enables detailed event tracking
- Hubspot
- Combines CRM with marketing automation
- Facilitates personalized email campaigns
- Optimizely
- Enables A/B testing and personalization
- Helps optimize user experiences
- Segment
- Centralizes customer data from various sources
- Simplifies data integration for behavioral analysis
Tip: Choose tools that integrate well with your existing technology stack and align with your specific behavioral marketing goals.
How to Get Started with Behavioral Marketing
While it may sound like a very daunting task to implement a behavioral marketing strategy, the fact is that with a structured approach, businesses of any size can start tinkering with it. The following steps should get you properly started:
- Collect and Analyze Data
- Implement tracking tools on your digital properties
- Gather data from various customer touchpoints
- Segment Your Audience
- Create detailed customer personas
- Group customers based on behaviors and preferences
- Develop Personalized Campaigns
- Create targeted content for each segment
- Design customized user journeys
- Implement and Test
- Launch your behavioral marketing campaigns
- Continuously A/B test and optimize
- Monitor and Adjust
- Track key performance indicators (KPIs)
- Refine your approach based on the results
Remember: Start small and scale up as you gain more insights and experience with behavioral marketing techniques.
Challenges of Behavioral Marketing
Behavioral marketing offers huge opportunities for businesses and while challenges like data privacy and quality concerns exist, the benefits still outweigh the difficulties. By leveraging customer data responsibly, companies can create more personalized experiences that will result in growth and loyalty.
If you want to take your company’s marketing next level with behavioral targeting, contact Purplegator and we will help you implement behavioral marketing strategies tailored to your needs.
FAQs.
What is behavioral marketing and how does it work?
Behavioral marketing is a strategy based on consumer data and insights that delivers more personalized marketing messages. It analyzes customer behaviors and preferences to create a more effective marketing strategy.
How does behavioral marketing help businesses grow?
Behavioral marketing helps companies improve customer engagement and conversion rates, drives customer loyalty.
What are some examples of behavioral marketing in eCommerce?
Examples of behavioral marketing are recommendations based on past interactions, for instance, Amazon’s “Customers who bought this also bought” section.
What is the meaning of Behaviour in marketing?
Customers’ actions, decisions and patterns while interacting with a product or service are behaviors in the context of marketing.
What is an example of behavior in marketing?
Behaviors in marketing may include a customer continually browsing running shoes on some sports site and never purchasing them. Behavioral marketing responses might then send them a targeted promotional email offering them a discount for running shoes, or retarget them in ads, showing them the exact shoes they were looking at.
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