Understanding Behavioral Marketing: How It Benefits Your Customers

Behavioral marketing is one of the most effective ways to increase the number of customers buying what you’re selling.

We’re not just talking about any old customers; we’re talking about quality customers—those high-value prospects who will spend more, buy more often, and boost your business. 

The good news is that behavioral marketing isn’t a “black box” solution you must spend big bucks on before it works.

Instead, it can be a relatively simple process that helps you better target your customers and reach them on whatever devices they are using.

Behavioral marketing is an excellent way for companies to improve their return on investment and increase sales.

Let’s examine how behavioral marketing works, how it benefits customers, and some examples of common behavior.

What is Behavioral Marketing?

Behavioral marketing is a marketing strategy that leverages customer behavior data, such as browsing patterns, purchase history, and interaction with content, to deliver personalized and relevant marketing messages.

This approach goes beyond traditional demographics by focusing on what customers do. It allows businesses to anticipate needs, tailor offers, and engage customers more effectively.

How Does Behavioral Marketing Work?

Companies use cookies, pixels, and other technologies to track your online activity when you visit their websites, apps, or other digital services.

This information can then be used to target you with relevant advertising that might be more effective than untargeted ads.

Here’s how it typically works:

1. Data Collection: The process begins by gathering data from various touchpoints, such as websites, apps, emails, and social media. This data includes everything from the pages customers visit to the products they view or add to their carts.

2. Segmentation: Once data is collected, it groups customers based on shared behaviors or patterns. For example, you might create segments of frequent buyers, first-time visitors, or customers who abandoned their carts.

3. Targeted Messaging: With these segments in place, you can create personalized marketing messages tailored to each group. For example, you could send a reminder email to those who abandoned their carts or a special offer to loyal customers.

4. Execution Across Channels: These targeted messages are then delivered through various marketing channels, such as email, social media, or paid ads, ensuring that the right message reaches the right customer at the right time.

5. Continuous Improvement: Behavioral marketing is an ongoing process. As more data is collected, the system becomes smarter, allowing you to refine your segments, improve targeting, and optimize your campaigns for better results.

Types of Behavioral Marketing

1. Personalized Ads.

Behavioral marketing involves using data from your website to target potential customers with personalized ads on other websites.

For example, if someone visits your site and signs up for an email newsletter, you can use that information to target them with ads for similar products elsewhere online.

This type of targeted advertising is very effective because it doesn’t just appear on random websites; instead, it reaches out only to people who have expressed interest in your products or services.

2. Targeted emails.

Suppose the person visiting your site doesn’t sign up for an email newsletter but does purchase something from you.

In that case, you can send them a follow-up email asking if they’d like to receive more information about related items or services that might interest them (again, using data gathered from previous purchases).

This can be effective because those who’ve already purchased something from you will likely buy from you again.

3. Dynamic Website Content

Behavioral marketing allows you to customize the content a visitor sees based on their previous interactions with your website.

For instance, if a customer frequently browses a particular category, like running shoes, your homepage can dynamically feature those products when they return.

This tailored experience makes the site more relevant to their interests, increasing the chances of conversion by showing them exactly what they are looking for.

4. Product Recommendations

Using behavioral data, you can recommend products to customers based on their past purchases or browsing history.

For example, if someone buys a camera, you can suggest related accessories like lenses or tripods in their next visit or follow-up email.

This approach improves the customer experience by providing valuable suggestions and increases the average order value by encouraging additional purchases.

5. Retargeting Abandoned Carts

Behavioral marketing can be highly effective in recovering abandoned shopping carts.

If a customer adds items to their cart but doesn’t complete the purchase, you can send a reminder email or display retargeted ads with a gentle nudge, like a limited-time discount.

This reminds the customer of their pending purchase and can motivate them to return and complete the transaction, reducing cart abandonment rates.

Benefits of Behavioral Marketing With Examples?

Behavioral marketing aims to understand what your customers like and don’t like so they can be targeted with ads and offers more likely to resonate with them.

Although this type of marketing has existed for decades, it only recently became possible due to the growth in the amount and type of data available.

The benefits of behavioral marketing include the following:

1. Behavioral marketing offers a personal touch.

Behavioral marketing enables brands to deliver highly personalized experiences by tailoring offers and content based on individual customer actions.

For instance, if customers browse products without making a purchase, sending a personalized email with a discount can nudge them to complete the transaction.

This approach is powerful, as 80% of customers are more likely to buy from brands that offer a personalized experience.

Additionally, by crafting content that aligns with customer behavior, brands can drive immediate sales while fostering long-term loyalty.

For example, Brooks uses behavioral marketing to send personalized emails based on users’ location information, offering targeted promotions that resonate with different climate zones.

(Source)

The two versions are created on a single template but have different offers that target users from different climate zones.

2. Behavioral marketing keeps your brand in front of your customers

Maintaining visibility is key to building lasting customer relationships, and behavioral marketing excels at this by keeping your brand top-of-mind through relevant, timely engagements.

Behavioral marketing targets those ready to buy instead of relying on generic advertising, making marketing efforts more efficient and effective.

Leveraging consumer data can significantly impact your business—according to McKinsey, it can boost sales growth by 85% and gross margins by over 25%.

For example, suppose a customer regularly visits your website every Tuesday at 8:00 AM. In that case, you can anticipate their behavior and send a reminder email on Monday night about a promotion scheduled for the next day, encouraging their return.

Take a real-life example: Zuji, an international travel site, uses customers’ past searches and behavior to offer personalized offers.

The brand displays these ads based on users’ past page behavior and considers how often the user has visited the page to push personalized offers. It increases the likelihood of conversions.

3. Behavioral marketing strengthens customer relationships.

Behavioral marketing is a powerful tool for building deeper connections with customers by focusing on their actual behaviors rather than just demographics or general interests.

By understanding and responding to customers’ routines and preferences, brands can engage in more meaningful interactions.

This approach strengthens relationships and ensures that marketing efforts are truly relevant.

For instance, an ad promoting the Toyota Prius might target environmentally conscious customers who prioritize fuel efficiency, showing that the brand understands their values and needs.

(Source)

This ad promotes the Toyota Prius’s fuel efficiency and targets environmentally friendly customers looking to lessen their environmental impact.

4. Opportunities for cross-sells and upsells

Behavioral marketing also creates opportunities for cross-selling and upselling, helping to increase sales while providing customers with more tailored options.

For example, if a customer orders flowers online and selects same-day delivery, offering them an add-on like cupcakes or balloons can enhance their purchase.

Similarly, if someone is buying a mid-range TV, suggesting an upgrade to a high-end 4K model could lead to a higher-value sale.

These strategies benefit customers by offering them relevant choices and enhancing their shopping experience.

Amazon’s “Frequently Bought Together” feature is a prime example, suggesting complementary products that customers will likely find useful.

5. Behavioral marketing provides tailored content to customers

One of the most significant advantages of behavioral marketing is its ability to deliver content that speaks directly to the needs and interests of each customer.

By analyzing customer activities and preferences, brands can create messages that resonate on a personal level.

For example, a retailer might send a targeted email promoting a new line of winter coats to a customer who recently purchased gloves, increasing the relevance of the offer.

Behavioral marketing also allows companies to tailor their campaigns based on specific customer characteristics, such as targeting younger consumers with accident coverage options in an insurance campaign.

A practical example is Mariah Coz’s blog, where she uses behavioral marketing to connect deeply with her audience by addressing their pain points and offering personalized advice and solutions.

(Source)

She empathizes with the readers’ pain points, discusses the benefits of buying her course, and uses distinctive sales techniques, such as debunking myths.

Behavioral marketing helps her make the reader feel like she’s talking directly to them.

Types of Behavioral Segmentation in Marketing

Behavioral segmentation is based on the understanding that each consumer has unique needs and preferences.

It’s a way to understand how different groups respond to various products and services.

It uses research to identify groups with similar buying behaviors and tailor marketing messages and offers to those groups.

There are several types of behavioral segmentation:

1. Based on Purchase Behavior

Purchase behavior is a behavioral segmentation used to identify and analyze customers who have already purchased a product or service.

This information can help marketers predict the likelihood that other customers will buy from them and how much they will spend.

Purchase behavior is helpful because it allows companies to determine which products are most popular among current customers, what characteristics those products share, and what factors influence people’s decision-making when buying those products or services.

2. Based on Occasion and Timing

Occasion-based behavioral segmentation categorizes customers based on when they make purchases, such as holiday shoppers or vacationers buying souvenirs.

This approach helps identify groups who purchase similar products for different occasions, like gifts for birthdays, holidays, or other special events.

Timing-based segmentation focuses on when customers make their purchases, such as back-to-school shopping or seasonal trends.

This method is valuable for understanding consumer behavior patterns over time and identifying key periods that influence purchasing decisions.

3. Based on Benefits Sought

The most common approach is to segment consumers based on the benefit they seek from your product or service.

For example, some consumers may seek high quality while others may be more concerned with price.

You can also use this method to divide customers into groups with similar needs.

4. Based on Customer Loyalty

Customer loyalty is an important factor in deciding how to segment a market.

Loyal customers are likely to buy more of the same product, which makes them less price-sensitive.

They may also be more willing to try new products from the same company so that they can be used as a test market for new products.

Over to You!

Online marketing is an ever-changing and innovative space. Ensuring a lasting customer experience requires brands to take advantage of the latest resources and technology, including behavioral marketing tools, to provide tailored content to each customer. 

We are already seeing a surge of campaigns that utilize individual consumers’ information, including their profiles and interests, to offer great deals and promotions when necessary. 

Behavioral marketing technology will help brands connect with consumers by personalizing their experience. This trend will continue rising as more companies learn how to leverage more personalized marketing techniques.

Ultimately, it’s a matter of semantics. The important thing to remember is that behavioral marketing takes a more direct approach to using data to target customers with tailored content. This strategy opens up many new opportunities for marketers and may even dent the aggressive growth rate we discussed above.

Behavioral Marketing FAQs

What is an example of behavioral marketing?

Behavioral marketing involves tailoring marketing efforts based on the observed actions and behaviors of consumers. For example, an e-commerce website might recommend products based on a customer’s past purchases or browsing history. If someone frequently views running shoes, the site could display ads or email offers featuring the latest models or related accessories, like running socks or water bottles.

What is behavior marketing?

Behavioral marketing is a strategy that uses data about consumers’ online and offline behaviors to deliver personalized marketing messages. This can include tracking website visits, app usage, purchase history, and engagement with ads to understand a consumer’s preferences better and target them with relevant content, offers, or promotions.

What is behavioral advertising?

Behavioral advertising is a subset of behavioral marketing where ads are personalized based on a user’s behavior. This could involve showing targeted ads to someone who has recently visited a specific website, abandoned a shopping cart, or searched for specific keywords. For instance, if someone searches for “budget hotels in Paris,” they might see ads for Paris hotel deals or travel packages on their social media feeds or other websites they visit.

What are the 4 types of behavioral segmentation?

The four main types of behavioral segmentation are:

1. Purchase Behavior: Categorizing consumers based on their buying habits, such as first-time buyers, loyal customers, or deal-seekers.
2. Usage Behavior: Segmenting users based on how they use a product or service, such as frequency of use (e.g., heavy, medium, or light users).
3. Benefit-Sought Behavior: Grouping customers by the specific benefits they seek from a product or service, such as convenience, quality, or affordability.
4. Occasion-Based Behavior: Understanding consumer behavior based on specific occasions, like holidays, birthdays, or seasonal trends influencing purchasing decisions.