Marketers and marketing exist to decode customer behavior and to figure out why they act the way they do. Taking it a step further, if behavior can be observed, analyzed and understood, it’s only logical that it can also be predicted and guided.
Modern marketing studies involve extensive and in-depth research into the field of Behavioral Segmentation.
Social Psychology and Marketing
Up until the1950s, marketing study was characterized by a strong focus on economics, the case-study approach and interview methods to gain a broad understanding of consumer behavior.
Since then, the emphasis shifted to socio-cultural and behaviorist sciences that provided more insights into individual and group behaviors.
Disciplines such as sociology, anthropology and clinical psychology came to the forefront, with the customer now becoming the center of attention.
Consumer behavior was keenly studied along with concepts such as opinion leadership, brand loyalty, influence field, reference groups etc. to give a more holistic view of consumer behavior. Consumers may respond emotionally, cognitively and/or behaviorally.
This aspect deals with:
- purchasing and acquisition of products/services
- evaluating the product/service
- payment methods
- consuming and user experience
- final disposal of product
How Purchasing Decisions Are Made
Understanding how consumers decide to purchase/not purchase something is an Alladin’s Cave of information for marketers. These decisions are crucial in evaluating the effectiveness of marketing campaigns, allotment of budgets, launch of new products, and the relevance, growth and expansion of the company.
Some categories of products/services are purchased without too much thinking going into the act. Others may involve large groups, families, time, research and managing conflicting opinions.
The chain of decision making involves initiators, influencers, decision-makers, purchasers and actual users.
Modern research uncovers phenomena such as “pester power” where children are some of the biggest influencers in certain types of decision making.
What Is Behavioral Marketing?
Behavioral marketing is a tried and tested method of collecting data on the behavior of consumers to create segments and target audiences for marketing messages. The data gives information on geolocation, interests, motivation, behavior and many other metrics. Data is gathered via cookies, IP addresses, computer applications, browsing/search history, web analytics etc.
This data is then used to create distinctive user profiles based on previous behavior in order to provide future messages. It gives a deeper view and insights into what the consumer is interested in presently and what they’re likely to want/need/purchase in future.
This is in contrast to methods of evaluating consumers based on the pages they visit on a website – instead, it examines what exactly they do on the page. This helps to beam more contextual messages that actually reach the intended target and influence subsequent behavior.
Benefits of Behavioral Marketing
Better engagement: Visitors and customers on your website are provided with more and deeper opportunities to engage. Since you get detailed information on how consumers interact with particular marketing campaigns and materials, it’s easier to tailor and customize these. Your one-click ads would certainly direct consumers to your store or business, but unless this is backed up with interesting, engaging and useful information, you could lose the trust of such visitors. When you have information about specific customer behavior, you can put in the required material to keep them engaged and retain their interest.
Funnel Through: When your consumer is first exposed to an interesting message that promotes a service/product, what helps them to move along the purchasing corridor is behavioral marketing. You can provide personalized ads that sync with their needs, preferences, budget, occasion etc.
Boost conversion rates: Obviously, an engaged customer is more likely to follow through with a purchase. This helps to transform clicks into revenue, and increase your sales. Behavioral marketing also helps to generate more repeat customers.
Goals Of Behavioral Marketing
Take a look at some interesting numbers:
- More than 50% of online consumers think personalization is valuable
- 57% online shoppers don’t mind providing personal information if they feel they might benefit from it
- 45% prefer to shop with stores that provide personalized attention
- 56% are more likely to return to sites that provide personalized recommendations
- 59% of online shoppers feel that it’s easier for them to find products on sites that have been personalized
- 71% of consumers prefer personalized ads on a website
This brings us to the real goals of behavioral marketing.
1. Analyze and understand specific behaviors: The most common behaviors that analysts track with behavioral marketing are the consumer’s IP address and location, past history of purchasing, the device or devices used to access the site, tracking the origin of clicks, how many clicks it takes to reach the desired product/service, where people spend more time, and the call to action (CTA) that worked best.
2. To create personalized marketing campaigns: Once the data is compiled regarding the customer’s behavior, it’s easy to create a specific, bespoke message that addresses the person directly. Behavioral marketing also helps to understand the consumer’s journey through your website and accompany them in the right way, without seeming to nudge or push.
3. More exciting UX: What sets your website apart from others is the user experience that the consumer has. With data collected from the analytics, it’s possible to provide a highly personalized ad experience that appeals specifically to that particular consumer’s values, interests and aspirations.
4. Re-targeting: One of the main goals of behavioral marketing is to identify specific behaviors and to test whether these can be used to re-target that consumer. This will help you to judge whether the same behavior is triggered by the same stimuli.
5. Efficiency: When you’ve correctly analyzed behavior, it’s possible to ensure that the consumer quickly identifies the product/service they want, click through the store fast, add the product to their shopping cart, repeat their previously preferred payment method and check out swiftly. Most consumers appreciate this swift processing and are willing to repeat it.
6. Alerts and reminders: Another important goal of behavioral marketing is to offer regular alerts and reminders about similar products/services. This keeps the consumer feeling updated with new information about their preferred brands
7. Predictions: Perhaps the most important goal of behavioral marketing is to predict future behaviors. As consumers journey through your website, you may observe certain behaviors such as spending more time on a product, comparing it to similar ones, shopping for lower prices, adopting preferred payment methods, abandoning a full shopping cart, returning products, etc. This data helps you to make accurate estimates of what their future behaviors are likely to be.