Behavioral Marketing 101

Article first published in November 2017, updated June 2019

Imagine a world where you could sell a product to a consumer
who’s looking to buy exactly what you sell.

If such a world existed, it’d represent the holy grail of
marketing. Instead of spending money on expensive advertising
campaigns, marketers would simply find who needs what they have to
sell, and they would sell it to them.

Unfortunately, such a world doesn’t exist. However, there’s
a marketing technique that has allowed marketers to create
better-targeted, more effective messages that are very likely to
resonate with prospects and customers.

The technique is called behavioral marketing and, in this
article, we’ll show you what it is and why you should consider
using it in your marketing campaigns.

What is behavioral marketing?

Behavioral
marketing
 is marketing that’s based on the actual behavior
of your audience. You can use website activity, purchase activity,
and activities from third-party applications to tap into how your
customers are engaging with your brand.

Online marketers are lucky—you can track and measure what
consumers do from the first moment they visit your website up to
the point of purchase. With the help of tools such as web
analytics, heat
maps
, and user recordings, you can uncover vast amounts of
insights from the actual behavior of your consumers, which you can
then use in your marketing campaigns.

In other words, you take all the information you have from your
users and use it to build a more realistic profile of them, which
you can use to tailor your marketing messages better.

Behavioral segmentation

Behavioral segmentation is considered a more focused form of

marketing segmentation
. This form of segmentation groups of
consumers into smaller groups based on specific behavioral patterns
displayed during their online searching and purchasing choices. 
Segmentations can be based on varying factors, including:

  • User interests
  • Engagement-level
  • Customer satisfaction
  • Customer journey stage
  • Purchasing behavior
  • Frequently searched items

Behavioral marketing works because users receive messages
tailored to them. In a world where 50%
of people feel they receive too many emails
, these personalized
campaigns make a difference.

According to Invesp, 53%
of online shoppers
 think personalization is
valuable, 45% prefer shopping with stores that give personalized
recommendations, and 57% wouldn’t mind giving their personal info
if they benefited from it.

Behaviors to track

If you want to use behavioral marketing, you have to track what
prospects, subscribers, and customers are doing. Here are some of
the most common behaviors that marketers look at:

  • Past purchases: You can use the past purchases of your
    customers to create better product recommendations, send them
    discounts, and other marketing messages to increase their
    loyalty.
  • Device: You can adapt your marketing based on the device on
    which the user visits your website. If they come via tablet, you
    might send them tablet-friendly content, for example.
  • Clicks: Where are your customers clicking? Which CTAs work for
    them? You can use this information to create more relevant
    messages.
  • IP and location: Based on the location of the user, you can
    then create ads that “follow” them around the city they’re
    in, as well as ads that include the location in the creative.

The more specific the behavior and the more information you have
at your disposal, the better. If you take the time on page—a
broad and ambiguous site-wide metric—as your main behavior,
it’ll be hard for you to make your marketing more effective. On
the other hand, if you segment the people who opened your last five
email campaigns as people who are engaged with your brand to send a
special campaign with a discount, you can probably expect a
positive response from your engaged subscribers.

How you can use behavioral marketing

Behavioral marketing is a strategy that encompasses many
different tactics. Here are three tactics that show how behavioral
marketing works. You can use them in your next marketing
campaign.

1. Increase your e-commerce sales with email retargeting.

If you work for an e-commerce company, you know it’s common
for people to leave products in their carts. In fact, the typical shopping
cart abandonment rate
for online retailers varies between 60%
and 80%, with an average of 67.91%.

There are many reasons why that happens, but, with email
retargeting, you can encourage those people to go back to your site
to make the purchase. Whenever someone leaves a product in their
shopping cart, you send them an email reminding them about it. You
can even offer a discount to encourage them to act immediately.

According to AdRoll, retargeting
emails
 have an average open rate of 60% and a click-through
rate of 15%. That’s 3.5x
better
 than the average open rate for the e-commerce industry
in the US, and 6x times better than the average click-through
rate.

Want to see retargeting in action? Kate Spade New York, the fashion
design house, sends the following email to subscribers who add a
product to their cart and then abandon it:

Kate Spade Email Marketing & Retargeting

The way they structure the email is great; they start by
catching the subscriber’s attention with the yellow header box.
Then they reduce friction by adding a phone number to call for any
questions. Plus, they show the product the subscriber left in the
cart, reminding them of exactly what they like.

To get started with email retargeting, you can integrate your
preferred email marketing tool, like Campaign Monitor, with a
tool such as AdRoll.

2. Improve your marketing with personalized content.

Your audience will get irritated if you send them irrelevant
content. How do you send campaigns your subscribers actually want
to see?

One way to improve the relevancy of your content is
through personalization.
With personalization, you can send the right content to the right
audience at exactly the right time.

According to a Forrester Total Economic Impact™
Study, when retailers add content
personalization to their event-triggered campaigns
, they see a
667% ROI.

Marketers can personalize campaigns using data about a
subscriber’s:

  • Gender
  • Location
  • Income level
  • Past purchases

Average order value from previous purchases

For example, On, a Swiss
running shoe company used behavioral marketing to target
subscribers based on their location, content preferences, shoe
usage, and past purchases.

On Content Personalization Email Campaign

After a customer makes a purchase, On asks customers what kind
of runner they are and how many miles they usually run. With this
data, On can then send the customer reminders about when they
should shop for their next running shoe, as well as targeted offers
about relevant products.

On also sends different campaigns based on the language of the
user. Instead of asking for their location, they segment their
customers based on the billing country (for customers) and on their
IP Address (for non-customers).

3. Lift your revenue with suggested products.

According to the identity management software provider
Janrain, 74%
of customers
 are becoming increasingly frustrated when they
receive marketing content that falls outside their interests.
Focusing on individual shoppers rather than mass segmentation can
let companies send product recommendations that drive
purchases.

The use of technologies like machine learning and artificial
intelligence allows marketers to use behavioral marketing as a way
to trigger email marketing campaigns based on a shopper’s past
and present brand interactions. That is, a retailer can use the
insights taken from past campaigns to show shoppers unique product
combinations that take into consideration purchasing trends from
other people.

For example, JD
Sports
, the owner of the sites Millets.co.uk and Blacks.co.uk, tested out
personalized product recommendations to see if they’d generate
more revenue.

They recommended products based on the intent and preferences of
each visitor. JD Sports gained this info from the page types they
visited and the specific product categories they interacted with.
They used three types of personalization:

  1. “What customers ultimately buy” recommendation
  2. Rule-based cross-sell personalized recommendation
  3. Auto-generated product recommendations

JD Sports Behavioral Marketing Product Recommendations

The results showed a 10%
increase in conversion rates
 when the recommendations were
shown against the default options that were previously used. Also,
conversion rates increased by 332% on Millets.co.uk and 277% on
Blacks.co.uk when a visitor selected a personalized product
recommendation.

What’s more, a large part of the sites’ revenue came from
product recommendations: 19% at Millets and 16.9% at Blacks.
Finally, the use of personalization technology brought an ROI of
£291.70.

Contextual and behavioral targeting

While the information we’ve covered so far pertains to email
marketing, contextual and behavioral targeting are both worth
testing in your digital marketing strategy, and here’s why.

What is contextual targeting?

In digital marketing, contextual targeting is the practice of
displaying ads on a website that are relevant to its content. Think
about a website that you’ve recently visited—perhaps it was a
fitness website. Do you remember seeing ads placed around the
website? Chances are these ads were fitness related, such as
fitness equipment or a weight loss supplement.


The results showed a 10% increase in conversion rates when the recommendations were shown against the default options that were previously used. Also, conversion rates increased by 332% on Millets.co.uk and 277% on Blacks.co.uk when a visitor selected a personalized product recommendation. What’s more, a large part of the sites’ revenue came from product recommendations: 19% at Millets and 16.9% at Blacks. Finally, the use of personalization technology brought an ROI of £291.70. Contextual and behavioral targeting While the information we’ve covered so far pertains to email marketing, contextual and behavioral targeting are both worth testing in your digital marketing strategy, and here’s why. What is contextual targeting? In digital marketing, contextual targeting is the practice of displaying ads on a website that are relevant to its content. Think about a website that you’ve recently visited—perhaps it was a fitness website. Do you remember seeing ads placed around the website? Chances are these ads were fitness related, such as fitness equipment or a weight loss supplement.

Source:
Fitness Magazine

In this example, the ads to the right of the blog include links
to other relevant articles from around the web, including recipes
and health solutions.

These ads are placed in this piece because the topic of the blog
is “Green Drink,” which are popular health drinks that many
fitness guru’s believe help in weight loss and gut health. So it
would make sense to see an article on “10 healthiest foods for
breakfast,” and an article on age-related macular
degeneration.

What is behavioral targeting?

Behavioral targeting, much like behavioral marketing, targets
website users based on their past behaviors, such as purchase
history, search history, and so on. This is done with the use of
user segmentation, which can then help create highly personalized
ads for your brand’s audience.


Behavioral targeting, much like behavioral marketing, targets website users based on their past behaviors, such as purchase history, search history, and so on.

Source:
Walmart

This example from Walmart is excellent because it shows the use
of both contextual targeting and behavioral targeting. The
“customers also viewed” section is a classic section of
behavioral targeting, while the “sponsored products” is heavily
influenced by the page content, which was a search on Father’s
Day gifts under “sports/outdoors.”

Behavioral marketing trends in 2019

Marketing trends are ever-changing, and, while the behavioral
marketing trends mentioned above are still relevant, 2019 has
continued to highlight popular and effective methods that seem to
have fallen out of favor with some marketers, while also giving
special attention to a few new trends.

1. Demographic targeting

Demographic targeting is the process of targeting users based on
specific demographics, such as age, gender, household income, and
more.

Targeting helps marketing teams to create material that’s more
relevant to viewers and subscribers. While a specific user’s
demographic isn’t necessarily a “behavior,” marketing teams
can use this information to see who frequents what material. The
“who is visiting” is the behavior being tracked here. This will
help marketers better prepare content for those who are frequenting
their site the most.


Targeting helps marketing teams to create material that’s more relevant to viewers and subscribers.

Source: CPC
Strategy

2. Leveraging cross-selling and upselling

This is a classic behavioral marketing method that’s becoming
popular once again, as more people are turning to the internet for
researching a purchasing product. Sites like Spotify, Amazon, and
Walmart all track what users listen to or purchase and offer up
suggestions of similar items that may be of interest to them. This
can most often be found under the label “customers also bought”
and helps curate options for future users.


This is a classic behavioral marketing method that’s becoming popular once again, as more people are turning to the internet for researching a purchasing product.

Source: Amazon

3. Social media retargeting ads

Retargeting ads aren’t exactly new. However, with the
popularity of social media, more and more brands are creating
retargeting ads that appear on these popular social pages to help
bring previous readers or viewers back to their site. When done
right, the ad will pertain to something the viewer was specifically
looking at, and offer them something of value to get them to
return.


Retargeting ads aren’t exactly new. However, with the popularity of social media, more and more brands are creating retargeting ads that appear on these popular social pages to help bring previous readers or viewers back to their site.

Source: Facebook

Wrap up

Behavioral marketing represents a new way to carry out your
marketing strategy. By taking the behaviors of your visitors and
customers, you can offer more relevant content that encourages them
to make purchases.

You’ve seen how powerful behavioral marketing works, how to
use it, and how powerful it can be. Now it’s time you get
started. Picking one of the tactics shown in this article can help
you start making your marketing more relevant. Another way to do so
is fine-tuning your list segmentation skills.

Check out how using
list segmentation
can not only make your content more relevant
to your readers, but how it can also help boost overall
engagement.

The post
Behavioral Marketing 101
appeared first on Campaign Monitor.

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Behavioral Marketing 101