What it is? Behavioral marketing is a set of methods that are aimed at studying consumers. Research can be psychological or metrics-based. In the first case, the reasons for the purchase are studied, in the second – what exactly pushes the buyer to it.
How does it work? Having such data, businesses adjust their methods of interaction with customers. A unique selling proposition is created, the appropriate type of advertising is selected, and a loyalty program is formed. Different behavioral marketing tools are suitable for small and medium-sized companies.
Behavioral Marketing Concept
Every business strives to increase sales by attracting new customers and retaining existing ones. To achieve this goal, a lot of methods are used, including behavioral marketing – studying the actions of potential consumers. Knowing how users view the site, what banners they click on, and what emails and messages they open, entrepreneurs can predict their behavior and motivate them to make the next purchase.
In everyday life, we encounter the use of behavioral techniques every day. With experience, each of us comes to understand how our friends, children, and colleagues react to certain actions. This knowledge helps to build communication with others for your own benefit. The main principle of behavior marketing is not just to extract immediate benefits by selling a product or service to a person, but to completely solve the buyer’s problem, turning him into a loyal customer.
There are two ways to influence consumer actions: based on psychological techniques or guided by the results of analysis of collected data.
The psychological approach involves the use of behavioral patterns that motivate people to make purchases. One of the most common is the method of limiting the quantity or duration of the offer. The desire not to miss out on benefits pushes consumers to urgently purchase a product or service.
The data-driven approach is based on studying an array of data. By analyzing the behavior of a large number of users, you can identify patterns in making purchase decisions or refusals.
Behavioral marketing strategy is customer-centric. This means that sales companies must not only understand what motivates their customers on the path to purchasing a product but also teach their employees to apply behavioral techniques every day when working with customers.
Stages of shaping buyer behavior
Awareness of need
A person often makes a decision to purchase a particular product based on his condition at that moment. People who go to the grocery store after work buy more food, including fast food. If the sales floor smells of fresh baked goods, the average check increases noticeably. Aesthetic pleasure from the sight of fruits, vegetables, cheeses, and sausages increases the desire to add these products to the basket.
Finding a suitable offer
After the need for a product or service is formed, the stage of collecting information begins. To find a suitable product, the buyer pays attention to advertising, asks for the opinions of friends, reads reviews, and enters relevant queries into search engines. At this point, the winner is the seller who provided the potential client with the maximum information and used more channels.
If a person sees the name of the same brand on TV, on the Internet, on street banners and public transport, he is more likely to choose products from that particular manufacturer.
The opinions of friends and acquaintances play a decisive role. When the merits of a product are confirmed by the positive experience of people whom the buyer trusts, he has virtually no doubts.
Rating of the selected product
At the next stage, the consumer analyzes the totality of product characteristics. To make a final purchasing decision, it is important that several important criteria for a person correspond to his individual ideas about a product or service. For some, the price-quality ratio is important, for others, functionality comes first, while others value the appearance and design of the packaging.
The manufacturer and seller must take into account this multifactorial nature and develop a product sales strategy taking into account the typical behavior patterns of their potential customers.
Making a purchasing decision
Next, a rating of goods that have passed the preliminary selection is built. The comparison of different proposals ends with the formation of a hierarchy, where the top position is occupied by the product that best suits the needs and capabilities of a person. At this stage, the decision may still change under the influence of external circumstances, for example, the purchase budget has unexpectedly changed or the negative opinion of another consumer has become known.
Reaction to acquisition
The behavior of the consumer after the transaction is completed is expressed in his impressions of the purchase. The positive experience that he shares with others contributes to further sales and is therefore extremely beneficial to the seller.
Types of Buyers in Behavioral Marketing
Research of consumer audiences from a psychological point of view is carried out by many companies. A clear relationship has been established between a person’s psychotype and his shopping style, and groups of consumers for whom certain goods and services are, in principle, of no interest have been identified.
For example, some people categorically do not want to use bank credit products: they do not issue cards and do not take out loans. Consequently, efforts to attract them will be unsuccessful. It is better to spend your budget on those potential clients who are psychologically inclined to use loans.
A large number of psychological studies in the field of marketing conducted by different brands has led to the absence of a unified classification of buyers. However, several types of consumers can be distinguished in terms of their behavior in the process of choosing and purchasing goods (services).
- Purposeful buyer. Does not doubt his choice, clearly formulates his requirements for the product, demands evidence, and enters into a discussion with the seller, defending his opinion. Such clients need to be listened to carefully and their objections answered with reason.
- Know-it-all client. He is sincerely confident in his competence, considers himself an expert and strives to prove his superiority over the manager. You should not succumb to provocations; you can note the buyer’s awareness and give comprehensive answers to specific questions.
- Lover of communication. Starts a casual conversation with the seller in a friendly manner, jokes, and can easily deviate from discussing the product. With such a buyer, you should stick to the main topic, without allowing him to lead the conversation aside.
- Doubting. A difficult group of customers who find it difficult to make a purchase decision. He doesn’t know what exactly he is looking for, or what characteristics of the product are more important to him. The manager’s task is to focus on the positive qualities of the product and convince them of the correct choice.
- Silent. Doesn’t ask questions, refuses offers to help, and is self-absorbed. It is difficult to get such a buyer to talk, but with the help of open and closed questions, the manager must understand his needs and offer options for solving the problem.
- Wrangler. He refutes all the seller’s arguments and finds a lot of shortcomings in each proposed option. It is necessary to communicate with such a client using links to experts, statistical data, and specific facts.
- Impulsive. Reacts violently to the manager’s suggestions, displays negative emotions, is easily irritated, and is not ready to conduct a constructive dialogue. The seller’s tactics are to listen calmly, ask general questions, and look for a topic that does not cause a negative reaction.
- Optimist. He is determined to buy, communicates in a positive way, and clarifies the specific characteristics of the product. The most pleasant type of client for a seller, who is easy to communicate with.
Factors influencing customer behavior
Consumers use the same repetitive actions to evaluate sellers’ offerings, compare products, and make purchasing decisions. These steps shape customer behavior patterns. Companies can forecast sales based on the results of an analysis of the behavioral factors of their target audience. Consumer actions depend on many variables. Here are the main factors influencing buyer behavior.
Individual characteristics
This group of factors consists of gender, age, income level, education, and interests. Elderly consumers are guided by certain criteria when choosing goods, while young consumers are guided by others. Wealthier customers place higher demands on quality, people with low incomes are willing to put up with the shortcomings of a product that costs less, and so on.
Social environment
Consumer behavior is influenced by the opinions of friends, colleagues, and family members. Within one social group, specific groups of goods and services are popular. People listen to the recommendations of their friends and strive to buy what the people around them have already bought. Cultural values and beliefs are another factor that explains consumer choice.
Psychological reasons
These factors include motivation, perception, learning, and attitudes. Consumers may make purchases to achieve a goal, such as purchasing weight loss products to achieve an optimal weight.
The value of some products for specific audience segments is determined by the perception of such items as useful, prestigious, or necessary for achieving some goal. Consumers can get an incentive to purchase a particular product from advertising or reviews from friends.
Behavioral Marketing Stages
To grow sales, you need to understand the algorithm for making purchasing decisions. For this purpose, the audience is divided into groups in order to then analyze the behavior patterns inherent in each of them.
Segmenting the audience
The target audience can be divided into groups according to one or more criteria:
- demographic (age, gender),
- psychographic (personality, values),
- geographical (region, type of settlement),
- behavioral (frequency of purchases, media channels, propensity for online shopping)
Rather than a formal approach to audience segmentation, he considers it more effective to create several typical characters. For example, a middle-aged married woman with children living in a rural area.
We determine the key advantage for each segment
Each group of consumers has its own priority motive. Once you know it, you will be able to sell more and more often. To do this, you should put yourself in the shoes of a typical client and imagine what guides him when making a purchasing decision.
For example, try to understand how the buyer found your product – independently or on the advice of friends. Are there any problems when ordering? Was he satisfied with the delivery time? Do your competitors have better offers?
A great way to identify the key benefits of audience segments is to brainstorm and then test your hypotheses.
Collecting evidence
To confirm the information collected during the previous stages, quantitative research results are needed. The material for them is data from Yandex. Metrics, Google Analytics, or other available sources. Interview clients, analyze their reviews, and look at general statistics on your niche.
Comparing the data
Next, we compare quantitative and qualitative indicators. This will allow you to identify repetitive actions and identify consumer behavioral patterns.
One of the goals of the stage is to search for barriers that arise at different stages of the buyer life cycle and highlight the unique steps characteristic of a group of customers.
Particular attention should be paid to the behavior of loyal consumers, who bring you the majority of your profits. Identify the key points in their journey and develop an algorithm for their purchasing decisions.
You’ll get a customer journey map that will help motivate the rest of your audience. Strive to remove barriers that prevent users from making purchases. For example, a common obstacle is a complex order form. Simplify it and the number of clients will increase.
We make adjustments
Research results must translate into real changes so that users do not encounter barriers to completing a transaction.
Let’s say you know that some potential customers are eliminated at the stage of adding a product to the cart. Make the button larger or brighter, or move it to a prominent place.
If the support service is unsatisfactory, launch a chatbot that will answer simple questions and reduce the flow of requests received by operators.
Testing the changes
No matter how right the innovation may seem to you, it is better to test its effect on a small group of the target audience, preferably among those who are loyal consumers. This way there is a greater chance of receiving feedback and objectively assessing the prospects for change.
For maximum accuracy, use quantitative metrics: conversion rate, cost per lead, customer lifetime value, and so on. To attract as many customers as possible, you will have to track their behavior all the way from the first acquaintance with the product to purchase.
Behavior Marketing Tools
In recent years, most companies have firmly established themselves on the Internet. Both large brands and small companies have their own website, landing pages, and pages on social networks. All of them must understand what users are guided by when making purchasing decisions. To solve this problem, the following tools are used:
- Personalization: Providing a personalized experience for each consumer based on their preferences and history of interactions with the brand.
- Segmentation: dividing audiences into groups with common characteristics in order to reach them more effectively and provide personalized solutions.
- Automation: Using automated systems and tools to automatically send personalized messages and offers.
- Analytics: Collecting and analyzing consumer behavior data to identify trends, predict outcomes, and optimize marketing strategies.
On social networks, the number of views, likes, reposts, and comments is estimated using special services. They also allow you to determine the user population, and measure their activity, behavior, needs, and motives.
Tools such as:
- Retargeting. The pages and products viewed by the user are taken into account, which will then be shown to him on other resources. To launch such an advertising campaign, it is necessary to correctly determine the part of the audience and the type of messages. Retargeting is set up in Yandex. Direct.
- Behavioral email marketing. Based on user behavior. In this case, the main information used is data about the current status of the buyer (put an item in the cart, made an order, just went to the site, subscribed to an account, etc.).
- Demographic targeting. Based on information about age, gender, level of education, and location of potential consumers. Based on assessments of user behavior, companies make changes to the product itself, as well as to the design and type of packaging, brand attributes, and so on.
- Product recommendations. When a customer selects a product, similar or related items are shown to him based on his previous orders and browsing history. This type of behavioral marketing is implemented through up-sell and cross-sell.
Up-selling is an offer of goods, together with which the main product forms a complete set. This approach encourages the client to make additional purchases and increases the check amount.
Cross-selling is a marketing technology that encourages the purchase of auxiliary goods or services (shoe polish for boots, extended warranty service for a dishwasher, etc.).
Behavioral Marketing Techniques
Psychology of color
Color psychology plays an important role in marketing and branding strategies.
Color certainly influences our behavior in general and purchasing decisions in particular. According to one study on this topic, people only need 90 seconds to form an idea about a product, and more than half of the evaluation criteria are related to color.
There are well-established associations of qualities, emotions, and actions with different colors. Thus, white evokes the idea of purity, green – is about connection with nature, and red – is about passion.
Depending on cultures and religions, associations can differ significantly, and these points are taken into account by marketers when entering new markets.
For example, the color blue is hardly used to promote food products, since it reduces appetite and does not cause an association with tasty food.
Reciprocity
Having received something from others, we feel the need to give something in return.
In marketing, the principle of reciprocity helps build strong connections with the target audience. By accepting a gift, consumers subconsciously want to thank the brand by making a purchase.
A free service, cash bonus, or small gift does not oblige your customers to anything, but at the same time helps strengthen relationships and increase brand loyalty.
Key phrases and messaging
Many large companies are aware of the importance of developing their own style of communication with clients (Tone of Voice). Specialists are working to create a set of unique phrases and communication styles. ToV, together with color and reciprocity, forms a positive, recognizable image of the brand in the consumer and pushes them to take targeted actions.
We must not forget about the role of emotions in making decisions about purchasing a product, as well as the positive impact of purchases on mood. The concept of retail therapy is scientifically based, and its effectiveness is confirmed by research. Shopping promotes the release of dopamine, and this psychological feature is actively used by marketers.
According to experts, it is emotions that push people to buy in 95% of cases. Don’t miss the opportunity to sell your product by simply sending motivational messages to your customers.
Various emotions serve as incentives for purchasing a product or service: fear, curiosity, greed, and joy. Use keywords that work best for your audience.
Focus effect
The essence of this technique lies in the brain’s ability to rely on a limited number of factors when making a decision. Having a complete set of information about something, we highlight only the most important for ourselves.
In marketing, the focusing effect is used to direct the audience’s attention in the right direction. There is no point in listing all the characteristics of a product in an advertising message. The emphasis is only on how exactly the product or service will solve the consumer’s problem and improve the quality of his life.
For example, a video advertising a car does not contain detailed information about technical nuances. The main task is to attract the attention of the audience by highlighting a key advantage, for example, high maneuverability, maneuverability or comfortable control. The buyer will learn about all other advantages upon further acquaintance with this model on the website or in the showroom.
Social proof
Our decisions are largely determined by the behavior of others. The principle of social proof is used by marketers to convince consumers to make purchases.
Involving media persons in advertising is one example of using this technique. Most of us trust the opinions of celebrities and purchase products they recommend.
Reviews from real customers posted on the company’s website and reviews from independent bloggers increase conversion by 34%. Don’t miss the chance to increase sales by attracting influencers and motivating people to leave reviews of purchased products.
Behavioral Marketing Examples
Karmaloop.com
Sometime after its successful launch, online clothing retailer Karmaloop noted a sharp decline in revenue from $100 million to $10 million. To correct the situation, it was decided to introduce the principles of behavior marketing. The company’s focus was on basket volumes, users returning for repeat purchases, and periods between purchases.
After analyzing the collected information, the store took the following steps:
- Communication with customers was differentiated depending on the stage of the life cycle. Based on activity data, three groups were identified: newcomers, existing buyers, and frozen ones. New users who filled their cart but did not pay for the item were sent messages encouraging them to complete their purchase.
Active buyers received offers to purchase exclusive assortment items. Customers who had not visited the site for a long time were persuaded to return by offering special purchasing conditions. As a result, the effectiveness of marketing investments increased by 500%.
- An individual approach was applied to each client. Loyal customers who were ready to purchase without discounts were sent messages about the limited validity of the offer, which encouraged users to make purchases. By connecting up-selling and cross-selling strategies for this category of clients, the company achieved an increase in the average bill and doubled the income from existing users.
- The customer base with high lifetime value has been expanded. An increase in traffic does not always lead to an increase in purchases, so Karmaloop created an ideal customer persona based on specific numbers – the number and frequency of purchases, the number of items purchased without a discount, and so on.
Efforts have been concentrated on those promotion channels that generate customers with high lifetime value. This allowed Karmaloop to avoid collapse and move towards sustainable growth.
Finnair
Finnair was faced with the need to improve its marketing communications in 2018. Using analytics and online promotion tools, the company learned more about the target audience. New groups of potential customers were found that matched the characteristics of the customers who generate Finnair’s main income. For this segment, forms of communication have been developed to stimulate air ticket sales.
Behavioral marketing techniques resulted in a 54% increase in response to promotional offers, a 31% increase in bookings, and a 44% improvement in conversion rates. At the same time, investments in advertising remained almost at the same level.
Costa Coffee
Coffee chain Costa Coffee set out to implement a behavioral marketing strategy to better understand its customers and more accurately predict the company’s revenue. The objects of attention were such variables as the location of the outlet, on-site or take-out service, the composition of the purchase, the use of a bonus card, and so on.
The analysis found that customers who come for coffee before 9 am have the highest lifetime value, while loyalty program members spend more than customers who don’t have a Costa Coffee card. These and many other insights sparked changes that drove revenue growth by focusing efforts on the most profitable customers.
As a result, regular visitors began to leave 40% more in their favorite coffee shops, and measures to retain “leaving” customers resulted in a 35% increase in this audience segment.
Behavioral Marketing FAQs
What is the advantage of behavior marketing?
Unlike other promotion methods, behavioral marketing operates with real facts and figures. Each hypothesis is confirmed or refuted by research results, which allows the company to better understand its customers and use the data obtained to increase profits.
How does online behavior differ from behavior in offline stores?
Features of network trading are as follows:
- You can buy from anywhere.
- A huge assortment, incomparable to the capabilities of regular stores.
- The need to make purchasing decisions based only on the image and description of the product.
How do we improve behavioral marketing?
Establish feedback with customers, collect their opinions about the product and level of service, and encourage them to write reviews about purchased goods and services.