What is Behavioral Marketing?
Tailoring promotional materials to receptive audiences has been a goal of marketing from its inception. With the amount of user data continually rising, companies have more opportunities than ever before to create ads that suit unique market segments.
Behavioral marketing is about gathering user information to better identify who is most interested in certain products and deliver more intriguing content to users. As the habits of users and the methods of gathering and processing data evolve, so do behavioral marketing tactics.
Read on to find out everything you need to know about behavioral marketing and how businesses are using it to reach target audiences with more appealing advertising.
Modern Behavioral Marketing
Industries and businesses have sought to reach customers with appealing promotional material for centuries. Ads the way we conceive them in modern times began as posters and drawings on the pages of newspapers. They became more sophisticated over the years, especially with the advent of the internet and digital media in the last few decades.
A host of different technology allows behavioral marketing to exist in its current form. Tracking customer behavior and preferences simply wouldn’t be possible with old analog technology.
Behavioral marketing relies on information from and about users to craft content that will interest prospective customers. Gathering that kind of data brings up myriad privacy concerns and companies have to be careful not to intrude too much on users’ personal lives or bombard their internet use with ads.
What Kind of Data Informs Behavioral Marketing?
Companies gather all sorts of information about their own products and the way users engage with them. The most common kinds of data are included in the list below.
User engagement encompasses a wide variety of data on its own. For websites, visit counts and page views are two of the most common metrics for measuring how engaged a site visitor was. Purchases, logins, social media visits, emails opened, and links clicked are a few other ways companies measure customer engagement.
- Preferred Benefits
Motivation to browse (and hopefully purchase) is an important concept. Real and perceived benefits combine to inspire this motivation in prospective customers, but every person has different motivational factors.
Certain aspects of a product might appeal to certain people more than others. Behavioral history is the best indication of which factors an individual prefers.
Apps and smartphones have made it incredibly easy to track users’ locations in great detail. For people with privacy concerns, geolocation is one of the largest worries. For marketing professionals, though, knowing the general location of users allows companies to accommodate local customs or regional differences like seasonal weather.
Some areas may see greater success with more traditional marketing strategies like a billboard campaign while others may be impervious to outreach beyond word of mouth and reputation. Tracking locations allows companies to link different market segments to a geographic area.
- Return Visit Data
Brand loyalty is a central goal for almost every business. Knowing when users are engaging with a brand for the first time and when they’re returning again and again will help marketing agents discover the most successful aspects of advertising campaigns and products.
Special occasions such as holidays happen on a grand scale and around the same time. The holiday season is becoming more and more of a global phenomenon. Other individual holidays happen on a smaller scale such as weddings or birthdays.
Behavioral marketing seeks to measure the occurrence of both types of special occasions. Some customers may not splurge during the holiday season the way many people do while others may respond positively to gift sales throughout the year.
People who have purchased a product or service are more likely to buy again and present an opportunity for the company to gather feedback and constructive criticism. Social media and review sites have long given consumers the ability to voice their opinions, but now companies can gather their own information via surveys and follow-up requests.
How Behavioral Marketing Uses Data
Even with all this information on their users, it’s simply not feasible for companies to build advertisements for every individual. Rather, marketing professionals create ad campaigns with variations to account for differences they see in the user data.
A key part of marketing strategy when lots of user data is involved is placing ads where people will notice them at a minimum and ideally engage with them. While there isn’t a surefire way to know without a doubt that a user will follow an ad and engage with the brand as a result, there are a few ways behavioral marketing attempts to increase the likelihood that such a response will occur.
The most common method is to curate advertising materials to suit what the data indicates. People who have transactional histories with sales are more likely to see coupons in their email inboxes while others who engage with more informative videos and blogs may be encouraged to sign up for newsletters instead.
Businesses have to be able to stand out against the crowd. That’s easier to do with streaming services and social media sites whose product naturally results from customer behavior. Most Netflix rentals stem from suggestions based on past viewing behavior, for example.
Individualized content based on past behavior makes promotional material more interesting and less intrusive for the user. People who see ads that have little to nothing to do with their interests are more annoyed with the brand overall and much less likely to engage.
Brands also use customer data to inform people of trends in the hopes that they will in turn participate. When you know what large numbers of your customer base are doing, you can create pressure for other people to follow the leader, so to speak.
Also known as simply retargeting or behavioral remarketing, behavioral retargeting is a specific implementation of behavioral marketing and user data. Web beacons are used to leave cookies that indicate all or part of a user’s browser history on a given site so that the products they looked at before can be included in ad hoc ads later on.
Usually, this method is limited to a single website. But larger companies with affiliates are sometimes able to keep behavioral retargeting going across many domains. If you’ve ever browsed Amazon and then seen banner ads for an item you clicked on or put in your cart, then you’ve already experienced behavioral retargeting.
Privacy and Behavioral Marketing
Tracking user traffic and using technology like cookies to tell websites where their visitors have been is often viewed as an invasion of privacy. There is a certain tradeoff at work here – companies need to market their products and people prefer to see targeted ads if they have to see ads at all, but users don’t like the feeling that they’re being watched or tracked.
Many countries and international bodies such as the European Union have enacted at least one regulation about gathering user data. The regulation, called the General Data Protection Regulation, is concerned with whether or not people know their data is being gathered and what purpose that data is being used for.
For the most part, gathering user data is a fair trade. However, it has also created a new duty on the part of companies to protect the information they gather and ensure that personal information is not compromised via breaches or hacker attacks.
How Does Behavioral Marketing Work?
The psychology of branding plays a large role in behavioral marketing. This psychology can be divided into five central areas:
- Sophistication – How savvy does your marketing make your brand look?
- Competence – Does your company’s experience and knowledge come across through its branding?
- Excitement – Are you excited to share that experience and knowledge with customers?
- Sincerity – Do you really want to help people, or are you just after money?
- Ruggedness – What is the brand personality, and does it stand out against the competition?
These 5 areas make up a brand, broadly speaking. Using the information gathered from past customers, companies can then proceed through the seven steps to change behavior.
First, they have to interrupt patterns. Then the user has to be made comfortable with the new pattern. New normals must be established and then personal feelings should be led toward the brand. Criticism must be responded to satisfactorily and new doubts must be readily put to rest. Finally, changing associations will make this behavioral shift permanent.
The psychology of branding isn’t a parlor trick, nor is it mind control that works every time. It’s a set of guidelines marketing professionals use to reach prospective customers and hopefully give them the products and experience they desire.
One of the newest results of targeted marketing is brand interaction that occurs immediately. For example, when you click through many websites, emails are generated with internal calls to action. Social media has also made brand representatives more accessible than ever, even for people who aren’t customers of the brand directly.
This is a huge relief for customers who were previously left to wait on crowded phone lines or browse FAQ sections on websites with no option for speaking to someone who could help them address potential problems.
Incentivizing return visits to a webstore or a brick-and-mortar location is also a great way to begin building brand recognition and, eventually, brand loyalty. Any avenue that the company can create to facilitate a great user experience and put a face to the product line will increase the likelihood of return customers.
Machine Learning & Behavioral Segmentation
Sorting users based on their behavior is simultaneously easier and more challenging with all the data that companies now regularly collect. While new categories can be developed, sorting through all the millions of data points gathered from customers would be incredibly time-consuming for a human being.
That’s where artificial intelligence and machine learning come in. AI can sort through far more data than humans and it can do so practically in the blink of an eye. Machine learning enables AI to make decisions based on past inputs and even on past mistakes.
Storing and sifting through all the attributes and data from customers and users to create effective behavioral segmentation would be impossible without artificial intelligence and increasingly sophisticated demarcations between individual behaviors.
Marketing teams and designers take this information once it has been sifted through and assessed by artificial intelligence and use it to make not only advertising but also products and services better and more appealing for users and prospective customers.
Beyond allowing advertising to reach the people who are receptive to it, behavioral segmentation also allows companies to specialize their services and product lines. For example, you can look to media websites to see how increasingly niche areas of interest are becoming more profitable all the time. Behavioral segmentation allows these media companies and other businesses like them to target the people who are already interested rather than having to build up that market from scratch.
Tips for Effective Behavioral Marketing
Some tricks based on the psychology of branding and also in research done with everyday users have revealed a few strategies for implementing behavioral marketing in the most effective way possible.
1. Stick to a Single Website
Advertising is more likely to be consistent with consumer expectations and less likely to be intrusive when it is generated by, displayed on, and linked to a single website. For one thing, it greatly reduces the impression that people are being tracked as they surf the web. These advertising campaigns are generally also more uniform since they are limited to a certain brand and designed by the same team.
Branding is even stronger and comes across as more sincere when it is done for a single website. That doesn’t mean product lines across a brand can’t be mentioned, but in this case, branding and advertising legitimize one another and therefore both should be strong and used in combination on one website rather than spread across many that are seemingly unrelated.
2. Base Ads On the Current Visit
Another way to reduce the impression that people aren’t constantly being tracked for advertising purposes is to limit ads to data gathered during the current visit. If they’ve got something in their shopping cart and haven’t made the final purchase, gentle reminders or information about what other customers also bought with those items are fine.
However, recalling behavior from ages ago may have adverse effects, especially when it’s from a purportedly unrelated website or tracked from a visit to a site where the user didn’t actually make a purchase.
3. Transparency is Key
Nothing is more important than transparency when you’re dealing with user data. Regulations like the ones passed in the European Union are a step in the right direction, but honesty regarding the collection and use of customer data is even more impactful when companies are transparent about their own practices without the intervention of a regulatory body.
People want to know what is being collected and what purposes that data is put to once it has been collected. They also need to be informed about where the data is stored and assured that the data is properly disposed of when it is no longer of any use to the company. Being transparent about all this information builds trust between the brand and the customers, the first step toward brand loyalty and an indispensable aspect of any lasting relationship.
Behavioral retargeting and marketing rely on the collection of massive amounts of data so that companies can build profiles of their customers and design custom advertising accordingly. Users and prospective customers typically don’t mind being the subjects of targeted marketing as long as the results are effective and companies are transparent about what data they gather and what happens to that data.
The psychology of branding is largely unchanged in the realm of behavioral marketing. The biggest innovation that this marketing has so far led to is the behavioral segmentation of increasingly niche consumers. This allows for tailored marketing that is more enticing for the viewer and much more effective at generating sales and brand engagement.