Behavioral marketing is a method businesses use to tailor messaging based on the actions people take. It focuses on how individuals interact with a brand, its products, and marketing efforts, assuming past actions indicate future intent. By understanding what customers do, companies can create more relevant and personalized experiences. This shifts marketing from a one-size-fits-all approach to one that speaks to a user’s demonstrated interests.
Defining Behavioral Marketing
Behavioral marketing operates by gathering and analyzing customer actions to inform marketing messages. It differs from other targeting methods, such as those based on demographics (like age or location) or psychographics (like values or lifestyles). While knowing a customer is a 30-year-old urban professional provides some context, knowing they have visited a specific product page three times in the last week offers a much clearer signal of their current interests and intent.
Think of it like being a good host at a party. A host using demographic targeting might assume all guests of a certain age enjoy the same type of music. In contrast, a host using behavioral marketing observes which guests are tapping their feet to a particular genre and adjusts the playlist accordingly. This approach focuses on what people actually do, not on broad assumptions of what they might like.
This strategy relies on collecting behavioral data, which encompasses a wide range of user interactions. This can include browsing patterns on a website, purchase history, email open rates, and how long a user spends on certain pages. By analyzing this information, marketers can segment users based on shared behaviors. This segmentation is the foundation for delivering more relevant marketing content to each group.
Key Types of Behavioral Segmentation
Purchase Behavior
Behavioral segmentation involves analyzing a customer’s purchasing habits. This goes beyond a single transaction to look at patterns like the frequency of purchases, the average amount spent per order, and the types of products bought. Businesses use this data to identify their most valuable customers and understand the buying cycle. For instance, a customer who regularly buys a product at full price displays different behavior than one who only purchases during a sale.
This understanding allows for specific targeting. An online bookstore might notice a customer has purchased several historical fiction novels. Using this purchase behavior data, the store can then send targeted emails announcing the latest release from a popular author in that genre. This promotes a relevant product and shows the customer that the brand understands their specific tastes.
Online Engagement
Online engagement segmentation focuses on how users interact with a company’s digital assets, such as its website or emails. Marketers track metrics like which pages a user visits, how long they stay, their click-through rates on emails, and what content they download. These actions serve as digital body language, providing clues about a user’s interests and level of intent. A high level of engagement often signals a user is actively researching or considering a purchase.
For example, a software-as-a-service (SaaS) company can track which users have repeatedly visited their pricing page or watched a detailed product demo video. This behavior indicates a strong interest in their offering. The company can then place these engaged users into a specific segment and target them with a follow-up email offering a free trial or a consultation.
Usage Rate
Segmentation by usage rate categorizes customers based on how frequently they use a product or service. This typically breaks customers into three groups: heavy, medium, and light users. Identifying these different levels of usage helps companies tailor their communication to either encourage more frequent use or reward loyalty.
A mobile gaming app, for instance, can use this method to re-engage players. A user who hasn’t opened the app in 30 days would be segmented as a lapsed or light user. To bring them back, the app could send a push notification with an offer for free in-game currency. Conversely, a heavy user who plays daily could be rewarded with exclusive content to maintain their high level of engagement.
Benefits Sought
Customers often look for different specific advantages or solutions when purchasing the same product. Segmentation based on benefits sought groups audiences according to the particular value they hope to gain. By identifying these different drivers, a company can tailor its messaging to highlight the most relevant benefit for each segment.
The oral care industry provides a good example. A toothpaste brand might identify one customer segment that is primarily concerned with teeth whitening and another that is focused on preventing cavities. The company would then create two distinct advertising campaigns. One campaign would feature ads showcasing a bright, white smile, while the other would emphasize dental health and protection.
Customer Loyalty
Segmenting by customer loyalty involves understanding where a customer is in their relationship with the brand. This can range from a brand-new visitor to a long-term, repeat customer, or even a customer who is at risk of leaving. Each stage of this lifecycle requires a different approach to nurture the relationship effectively. New customers may need more guidance and information, while loyal customers respond well to recognition and exclusive perks.
Airlines are adept at this type of segmentation. They often have tiered loyalty programs that reward their most frequent flyers with benefits like priority boarding, free checked bags, and access to exclusive airport lounges. This strategy not only retains their most valuable customers but also provides an incentive for less frequent travelers to increase their loyalty to the brand in order to achieve a higher status.
Behavioral Marketing in Action
The execution of behavioral marketing follows a process of data collection, analysis, and action. It begins when a user interacts with a brand’s website, app, or email, where technologies like cookies and tracking pixels gather information. These tools record activities such as pages viewed, products clicked on, and items added to a cart. This data is then analyzed to identify patterns and segment the audience into groups with similar behaviors. The final step is to take targeted action, delivering personalized content or ads designed to resonate with each segment.
Examples of this process are woven into the daily online experience. Amazon’s “Frequently bought together” feature is a direct result of analyzing the purchase behavior of millions of customers. When Netflix suggests a new series based on your viewing history, it is using behavioral data to personalize your experience. Another common application is the automated abandoned cart email, reminding users of items they left behind.
The Advantages of a Behavioral Approach
Adopting a behavioral marketing strategy offers advantages for businesses. By focusing on actions, companies can deliver personalized messages that are more relevant to each user’s immediate needs. This relevance leads to a better customer experience, as individuals feel understood by the brand rather than being targeted with generic advertising.
This enhanced personalization directly impacts business performance. When marketing messages align with a customer’s demonstrated interests, conversion rates tend to increase. This efficiency also leads to a better return on investment (ROI) for marketing campaigns, as resources are focused on audiences that have already signaled their interest, reducing wasted ad spend.
By consistently providing value and relevance, behavioral marketing helps build stronger customer relationships. This approach fosters long-term loyalty and improves customer retention rates. When customers feel that a brand understands their journey and anticipates their needs, they are more likely to remain engaged and continue making purchases over time.