And the Survey Said

Americas favorite color is blue.

In fact, 5 out of the top 10 favorite colors are in the blue family. Demographic market research such as this is considered invaluable when planning product offerings and marketing programs. Surveys are widely used not only to determine customer satisfaction, but to drive current promotional activity, messaging, and even future production.

Take cars for example. With this color research in hand, one would think shades of blue would be the most popular car choice. So what was the top selling car color in three of the last five years? Silver. Blue actually falls further down the list, after white, black, gray and yes, even brown.

Do you know your prospects and customers well enough to know that over 90% of them wouldnt buy a blue car? Would more surveys and demographic market information even help? It appears there is a large gap between what prospects and customers say in a survey, and what they actually do when they take action. So how can you track and anticipate their behavior? Drop the crutch of demographics and step into behavioral segmentation.

Follow that Click!

You dont have to be a rocket scientist to figure out that what a customer clicks (or doesnt click) is a good indicator of their interest level.

Behavioral targeting is based upon this observation of activity and response, and adjusting your messaging to fit. Sometimes referred to as contextual advertising or behavioral marketing, the concept is the same: Quantifying online activity as an indicator of purchase intent.

As a simple example, consider an email newsletter. If reader A clicks to an article, then clicks again to read about a product on your website, they are a more likely prospect than reader B, who had no response. If you sales person only had time for one call, which person would you want it to be?

Collecting this information is now easily and inexpensively done by applying a few software tools to your website, email and other online advertising.

With this data in hand, you identify the most likely prospects, know what specific products or topics they are interested in, and even the best time to follow-up. Behavioral targeting is about building a relationship of relevance along the path following your customers purchasing behavior. Good sales people intuitively know selling is all about the relationship and the timing, and now good marketers and sales people alike can take advantage of simple behavioral tools to improve both.

Just-In-Mind" Marketing

Think of it as Just in Mind marketing. Like just-in-time manufacturing, where a manufacturer is loathe to have idle resources, paying and warehousing component parts long before the product actually goes into production, a company no longer has to spend all of its valuable advertising and marketing dollars on broad-based marketing and branding tactics that are mostly irrelevant to what the viewer is interested in at that time. Delivering appropriate sales and marketing messages along the path to purchase increases both effectiveness and efficiency, resulting in a higher, and more measurable ROI.

Where reach, frequency and awareness are useful demographic metrics, behavioral metrics are focused on response recency, frequency and conversion. How many people expressed interest? Of those, how many tried it? And of those, how many purchased?

Just as operational logistics have brought component parts to factory production floors the day they are needed, so can behavioral marketing deliver relevant communications and offers to the customer at the most relevant points of interest, consideration and purchase usually with little additional expense and significantly increased returns.

Strength In Numbers

Last month, eMarketing projected spending of over $1.2 billion on behavioral targeted online advertising in 2006, with that number breaking the $2 billion mark two years after that. The net benefit of behavioral targeting is clear:

1. Behavioral targeting improves the productivity of advertising, marketing and sales you gain more results from less exposure

2. Users find targeted ads more relevant to their needs, and thus they pay more attention a vital resource in the oversaturated marketplace

3. Relevance is a proven a factor in increasing revenue

Last year, IT and telecom firms found brand awareness and recall increased from anywhere between 40-200% by employing behavioral marketing strategies over regular campaign tactics. Top pharmaceutical companies report that one of the main three drivers for growth is professional education. This can be accomplished through the medium of email to inform both parties: what topics are hot among clinical professionals, and what new areas are the pharmaceutical companies researching? Lastly, any product line can boost sales through new applications or industry promotion via customized email solutions.

According to a 2005 Market Wire report, when Volkswagen undertook a combined behavioral and demographic marketing approach, behavioral targeting resulted in a 35% increase in conversion rates for those consumers who visited the site and configured a car and a 27% increase in conversion rates for consumers requesting information from a local dealer. Although the report didnt indicate how many consumers configured blue cars, certainly the data is there.

On a small business level, a recent case study showed that a state economic development office was able to boost business seminar sales by 30%, after implementing simple behavior targeting software for Outlook-based email marketing campaigns and conjunction with their website.

The numbers are there. The tools are there. Isnt it about time you got started?

Why not Start with Email?

Behavioral targeting doesnt have to be a big project, in fact, because of its very nature, its easy to implement on a small or even individual scale. Today there is even inexpensive behavioral tracking software available for Microsoft Outlook that enables you to track behavior, and take appropriate follow-up action.

Your company may already be doing other forms of it. Buying Google adwords campaigns is one method. The keywords you buy are within the context of the research people are doing online. Buying online banner placement today usually comes with a behavioral placement option, instead of just run-of-site buys. Once you get customers clicking thru to your site, you can employ customer recognition software or web analytics to identify behavior patterns and report activity. Email marketing software is another useful tool, and if you track click behavior, you can identity patterns and clusters or segments of opportunities. Eventually, you will want to get more sophisticated and roll all this activity up into one database and create automatically targeted campaigns.

The beauty of such behavioral targeting approaches is the objective measure. It is not longer about what people say they will do; its about that they actually do. This is real-time market research that you take immediate action upon. The costly gap between generating initial interest and signing a deal can be significantly narrowed through active, behavioral targeted communications.

My Behavioral Manifesto

Given a marketing survey, Id tell you I am an adult female. My favorite color is blue, the color I least like is brown, and Im an environmentally conscious consumer. However, if you looked in my driveway, youd see I drive a brown truck. Its also a V8, and you might understand why if you knew that every morning I click to the Moto GP results. Ive heard whisperings of a hybrid pick-up coming to the market. I will be researching it online. My lease is up in nine months. Will your marketing be here when I want it? Will I get any email about it?