Behavioural Marketing: What It Is and How To Use It for Higher ROI

Behavioural marketing is the practice of gathering information about customer behaviour, analysing it, and using these finding to improve the marketing ROI

 

When you ask customers about their exercise habits or vegetable intake, how reliable are their responses? Research suggests these self-reports can be skewed by social desirability bias, where individuals tend to exaggerate behaviours they believe are socially acceptable. This bias is just one example of how self-reported data can be distorted.

To mitigate such biases, researchers often combine survey data with observational and experimental insights. Similarly, marketers can enhance their strategies by focusing on behavioural marketing—a data-driven approach that examines actual customer actions, not just what they say they will do. By understanding customer behaviours, businesses can create more relevant and effective marketing campaigns.

 

What Is Behavioural Marketing?

Behavioural marketing involves collecting data on customer actions, analysing this information, and using it to deliver more personalised and targeted marketing messages. This approach helps businesses tailor their offerings to meet customer needs more effectively, leading to improved customer experiences, higher conversion rates, and better return on investment (ROI) for marketing spend.

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Types of Data Used in Behavioural Marketing

Behavioural marketing relies on different types of customer data, which are typically classified as follows:

• First-party data: This is the information collected directly from your digital marketing channels, such as your website or mobile app. It includes customer behaviour such as clicks, views, purchase history, and on-site search activity, as well as interactions like customer service calls and in-store purchases.
  
  
• Second-party data: This data comes from business partnerships where companies share customer data. For example, a running shoe brand might collaborate with a sports drink company to exchange purchase history data.
  
  
• Third-party data: Third-party data is sourced from external providers, such as data aggregators, social media platforms, or search engines. It includes browsing history, search queries, and online purchase behaviour.

 

Key Behavioural Marketing Tactics

Behavioural marketing provides real-time insights into customer motivations and actions. Here are some tactics that can drive increased sales and engagement:

1. Product Recommendations

Using behavioural data, you can offer personalised product recommendations to individual customers. Tools integrated with your ecommerce store analyse customer behaviour to suggest products they may be interested in, such as “Suggested for You” or “Personalised Recommendations.”

Additionally, you can use techniques like upselling and cross-selling, which analyse session data and cart contents to promote complementary or upgraded items. For example, a beauty brand might recommend a premium skincare package, or an apparel store could suggest matching socks with a pair of shoes.

2. Email Marketing

Behavioural data can enhance email marketing by delivering tailored content based on customer actions. For instance, abandoned cart emails target customers who’ve added items to their cart but haven’t completed the purchase, offering them incentives to finalise the transaction.

Behavioural data also allows for ongoing personalisation. For example, a pet supply company could send a welcome email with resources tailored to new puppy owners or small-animal care, automatically adjusting future communications based on which content the customer engaged with.

3. Targeted Ads

Behavioural marketing allows businesses to create highly targeted ads that are served based on customer actions. For instance, retargeting ads display products that customers have previously viewed on your site. This is achieved by placing cookies on a visitor's browser, which then allows ad platforms like Google or Facebook to display relevant ads as they browse other sites.

Search Engine Marketing (SEM) is another form of behavioural marketing, where companies bid on high-intent keywords, such as “best noise-cancelling headphones,” to target users actively searching for products.

 

Identifying Key Behavioural Signals

According to Lars Lofgren, co-founder of performance marketing agency Stone Press, identifying the right behavioural signals is crucial for effective marketing. He highlights two key actions:

1. Recent Purchases in Your Category: A customer who has recently purchased similar products is more likely to respond to additional offers in the same category. For example, someone who has bought hiking boots is more likely to be interested in related outdoor gear.
   
   
2. Search Behaviour: Customers conducting searches for specific products or reviews are demonstrating high purchase intent. These users are already in the buying funnel and are actively seeking information. Targeting them with relevant content can lead to higher conversion rates.

 

Tips for Successful Behavioural Marketing

Here are some best practices for leveraging behavioural marketing data to enhance your e-commerce campaigns:

1. Segment Your Audience Based on Behaviour

Behavioural data allows you to segment your audience into specific groups based on their actions, such as clicking on a product or signing up for an email list. This enables behavioural targeting, where you can craft marketing messages that resonate with a customer’s specific intent.

While demographic targeting relies on broad assumptions, behavioural targeting zeroes in on actions that indicate purchase readiness, such as clicking a “Learn More” button or engaging with a product demo.

2. Personalise the Customer Experience

Personalisation is a powerful tool for improving customer satisfaction and loyalty. According to research, 71% of consumers expect personalised experiences, and 78% are more likely to repurchase from a brand that offers personalised experiences.

Using behavioural data, you can create tailored product recommendations, custom promotions, and personalised post-purchase follow-ups. AI-driven tools can help automate this process, but ensure that content remains relevant and contextually appropriate.

3. Be Transparent About Data Tracking

To build trust and ensure compliance with regulations (e.g., GDPR), be transparent about how you collect and use customer data. Inform customers of your tracking methods and provide clear options for consent. Privacy notifications or preferences pop-ups are an effective way to keep users informed.

4. Utilise Specialised Software

Behavioural marketing can be enhanced with the right tools. Consider these options:

• Segmentation Tools: Use tools like Shopify’s built-in segmentation to group customers based on behaviours and demographics, enabling hyper-targeted campaigns.
• Customer Relationship Management (CRM) Systems: CRMs help store and analyse customer data, facilitating personalised marketing efforts.
• AI Tools: AI-powered platforms can automate behavioural marketing tasks, such as data collection, product recommendations, and sentiment analysis.
• Customer Feedback Tools: These tools help you collect and analyse customer feedback, providing insights to refine your marketing strategies and improve personalisation.

 

Behavioural marketing is an effective way to optimise your marketing efforts by focusing on customer actions rather than self-reported intentions. By leveraging first-party, second-party, and third-party data, businesses can gain deep insights into customer behaviour, personalise experiences, and run more efficient campaigns. Whether you’re targeting specific customer segments or personalising offers in real time, behavioural marketing strategies can significantly boost engagement, conversion rates, and ROI.