Behavioral marketing, definition, strategy and tools

Behavioral marketing, definition, strategy and tools

Behavioral marketing is based on the observation of the characteristic patterns of the individual consumer segment. It is a model of consumer behavior based on the psychology of human economic decision making.

 

It was believed that the buyer always proceeds with rational arguments and seeks to maximize his benefits from it. For years, economists have searched for evidence of how people actually act in the real economy, make their choices, make their decisions, and react to their consequences.

 

As a result, scientists have discovered that human beings are not only irrational, but also predictable in their emotional actions.

 

What can be achieved with the use of behavioral marketing?Real example of the application of behavioral marketing in a company

         1 Introduced differentiated communication based on the stage of the customer life cycle

         2 Increase in revenue per customer

         3 Expansion of the customer base with high lifetime value

 Why is behavioral marketing so effective?

 

What is behavioral marketing?

 

In their experiments, the scientists looked at interactions with stock investors to discover patterns in how people make economic decisions, how they assess the utility of an acquisition, and the risks associated with the counterparty. The perspective theory that emerged from the research gave rise to the notion of behavioral economics.

 

Since every purchase is the result of the consumer's subjective perception of the benefits received versus the expenditure required for it, marketers, following economists, have found a way to identify the different evaluations of people.

 

Behavioral marketing is based on the observation of the characteristic patterns of the individual consumer segment. The differences detected make it possible to divide people into groups to which offers are made that best meet their expectations.

 

Behavioral marketing tools and objectives allow companies to recognize and identify customer intentions. From there, companies can tailor the consumer experience to the expectations of the individual. In fact, the consumer is essential in the behavioral marketing system, since their individual characteristics serve as a reason to personalize the offer and the relationship with them.

This approach defines the basic principle of behavioral marketing, which is that a company must constantly study the behavior of its consumers. This is possible to a large extent thanks to modern technology, which makes it possible to collect and analyze the information "fingerprints" of consumers.

For this reason, the topic of behavioral marketing is usually linked to data-driven marketing, that is, data-driven marketing.

Tools and challenges

 

To apply a behavioral marketing strategy, a manufacturer of goods and services must integrate the following activities:

Data Collect

 

Today, the "footprints" of consumers can come from various channels. Of course, the online environment simplifies this process, since user actions can be tracked through websites, mobile applications, emails, searches, social networks, etc. However, there are also opportunities to obtain information in offline settings.

 

Audience analysis and segmentation

 

You have to analyze the data obtained to discover consumer behavior patterns, divide the audience into segments and determine the scenarios of each behavior pattern.

data application

 

After analysis, insights about consumers and their different segments should be used to create personalized marketing campaigns and offers.

What can be achieved with the use of behavioral marketing?

 

The use of behavioral marketing allows companies to achieve the following objectives:

 

     Sell more and make more sales.
     Offer segmented content that responds to the needs of the audience.
     Execute specific and targeted impacts on consumers.
     Create custom campaigns.
     Redirect the promotional budget to a part of the audience that is more willing to buy.
     Find new customers based on behavior patterns.
     Carry out promotions more effectively.
     Retain "outgoing" customers.

 

 Establish contextual communications using the consumer's situation (for example, geolocation).

Real example of the application of behavioral marketing in a company

 

karmaloop.com

One of the largest online clothing retailers in the world, Karmaloop, quickly began to lose momentum after a successful launch. His income dropped from $100 million to $10 million. In an attempt to support the rapid growth and aggressive expansion of its customer base, the company made the big mistake of offering deep discounts to everyone, to the point of financing the cost of a purchase at the expense of its profits.