Behavioral Marketing and Customer Segmentation for the Savvy Marketer

Jul 25, 2018

Here’s a golden rule of marketing: personalization is everything.

You can see how this intuitively makes sense. Your customers, motivated by different needs, hope that your product can address their different pain points. If you market a single message to all customers, the bulk of them will find that message irrelevant.

This is where behavioral marketing comes into the picture. Simply put, behavioral marketing refers to the act of serving targeted ads and content to an individual based on their past behavior. You’re personalizing the content that the individual sees, increasing the chances of them becoming a paying user.

Say you’re a digital marketing agency offering content marketing and SEO services. If Customer A has demonstrated interest in SEO services, then you’ll want to provide more information about your SEO services. If Customer B shows interest in content marketing services, highlighting content marketing would be better. That’s behavioral marketing at its most basic level.

Types of behavioral marketing

Now that we’ve defined behavioral marketing, let’s discuss what it entails.

Behavioral marketing is a broad term that encompasses a wide range of marketing strategies. This includes, but isn’t limited to:

  • Retargeting
  • Email Marketing
  • Product Recommendations

Companies may choose to use these strategies independently or in conjunction with each other.

Retargeting: best practices

How many times does someone need to interact with your brand before they make a purchase? Some will say 6 to 8 touch points is sufficient. Others argue that it might take up to 20 instances of exposure. Either way, retargeting is essential in getting your company in front of the same people multiple times.

How does it work? Retargeting is a form of marketing that targets users that specifically visited and bounced from your site. These users are served ads relevant to what they viewed on your site, across networks such as Facebook, Instagram, Twitter, etc.

This way, you remain at the forefront of their consciousness. And that increases the chances of them revisiting and finishing their uncompleted purchase.

Retargeting ads can be exceptionally powerful. Consider this: the average retargeted ad enjoys a click-through rate (CTR) that’s 10 times higher than that of a non-targeted display ad. On top of that, retargeted website visitors are 70% more likely to convert. To maximize the effectiveness of your retargeting campaigns, keep these following best practices in mind.

1. Exclude converted customers

If you’re new to retargeting, you might make the mistake of retargeting all visitors, regardless of whether they’ve already purchased or not.

This is wasteful. If you’re serving an ad of the very product a customer has already bought, you’re essentially throwing money down the drain.

2. Set a limit on how often a consumer is retargeted

Some consumers might need time to mull over a purchase decision. Assuming you retarget them with ads, they will come back to your website and complete their purchase. But with other consumers who aren’t interested in your product, it doesn’t matter how many ads you serve them. They still won’t convert.

How do you make sure you’re not wasting money showing your ads to customers who aren’t interested? Simple. Use frequency capping to set a limit on how often your consumers see your ads.

Unfortunately, there’s no hard and fast rule when it comes to how high your cap should be. Some companies find that showing consumers the same ad seven times is still effective. While others see issues with showing an ad twice. You’ll have to experiment and see what works for you.

3. A/B test the offer

If your retargeting campaigns aren’t performing, it could be that your consumers like the product, but not the offer. Create multiple ads with varying offers and see which is most well-received.

For example, say you’re a SaaS company promoting a social media scheduling tool. If your retargeting ad that offers a free trial doesn’t convert, try giving a demo, an ebook, or a whitepaper instead.

Behavioral marketing using email campaigns

You’ve probably heard that email marketing is crazy powerful.

How powerful is powerful? Well, on average, email marketing results in 122% ROI as compared to social media’s 28% ROI.

But that’s only part of the picture. Not all email campaigns are made equal; segmented campaigns are way more effective than non-segmented ones. We’re talking a 14.32% higher open rate, and a 100.95% higher CTR with segmented campaigns.

What are some segments that companies commonly target with their email campaigns? These include:

  • Those who are likely to churn
  • Those who are likely to convert
  • Those who have just signed up for your product/service

You might be wondering: why would anyone want to reach out to consumers who have just signed up? Isn’t that a done deal?

Well, not quite. Just because a customer has signed up for your service doesn’t mean they will convert.

If this customer is on a free trial, you’ll need to convince them to become a paying customer. If they are already a paying customer, then you want to get them using your product as soon as possible.

Product recommendation strategies

Product recommendations are a great way to cross and up-sell on your website or email newsletter.

Here are a few ways to take your product recommendations to the next level:

1. Utilize social proof

Most folks serve product recommendations based on what customers are most likely to purchase. Take it one step further, and recommend customers the best-selling or most popular products as well.

If you can display the total number of orders, your recommendations will be that much more compelling! (“591 purchases within the last month, and 10,233 purchases in total!”)

2. Take Average Order Value (AOV) into account

Say you know your customer typically spends $100 per single order. Bearing this in mind, don’t recommend just any product. Recommend them products which are priced at $100 and above, so you can maximize you order value.

Getting started with behavioral marketing using ByteGain

Before you implement the above behavioral marketing strategies, you first have to segment your customers. The more in-depth you can get with segmenting, the more relevant and compelling your campaigns will be.

That said, traditional segmentation technologies can only bucket consumers into broad groups, not individuals.

That’s where ByteGain comes in. With ByteGain, marketing teams can easily segment their customers down to each user, without any data science know-how.

How does it work? ByteGain uses AI to comb through real-time data streams, and learn what each customer likes, wants, and needs. The software then buckets consumers into thousands of specific personas, helping companies automatically customize each consumer’s website and retargeting experience.

Customizing website experiences with ByteGain

Say a customer has been to your website three times, and has always viewed a certain product. When this consumer visits your site next, ByteGain can automatically pull this specific product (plus other relevant ones) to highlight at the top of the search results. At the same time, it can also collapse other sections in your website that might distract that customer from completing the purchase.

On top of that, ByteGain also allows you to show pop-ups to those who need an extra incentive. Based on your consumer’s behavior, ByteGain will identify the exact value a customer needs (10%, 20%, etc), and serve them that exact coupon.

Intelligent Retargeting with ByteGain

Want to finetune your retargeting efforts, and make sure you’re reaching out to only those with the intent to buy? ByteGain’s intelligent ad retargeting integrates with both Facebook and Google AdWords to retarget only high-potential customers. This translates into more conversions, less ad spend, and a lower CAC.

Want to get started with ByteGain? Sign up for a two month free trial below.

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