In today’s competitive e-commerce landscape, personalized marketing is no longer a nice-to-have – it’s what customers expect. McKinsey reports that 71% of consumers now expect companies to deliver personalized interactions, and 76% express frustration when this expectation is not met. This highlights that a personalized approach to marketing is not just outperforming traditional strategies but is becoming a crucial element customers seek when interacting with online brands.
In this article, we are going to discuss the importance of a Behavioural Marketing Plan (BMP) and the role it plays in personalized marketing. The essence of a Behavioral Marketing Plan (BMP) lies in its sharp contrast to traditional marketing plans. While traditional strategies often adopt a broad, one-size-fits-all approach, a BMP zeroes in on targeting audiences based on a rich tapestry of metrics like behavior, interests, intentions, and geolocation. This focus on personalization not only enhances customer experience but also leads to increased customer retention.
In the following sections, we will break down what a Behavioral Marketing Plan entails, its significance, and the actionable steps to create a personalized journey for your customers that fosters long-term loyalty and growth.
What is a Behavioural Marketing Plan?
A Behavioural Marketing Plan (BMP) is a strategic framework designed to target and personalize marketing efforts for specific audience segments. Fundamental to a successful BMP is a deep understanding of your target customer segment, which is based on meticulous analysis of a range of critical factors.
Demographics such as age, location, and occupation provide a foundational understanding of who the customers are. However, the real depth of BMP lies in its focus on behavioral aspects. Key behavioral metrics include the customer’s first product purchase, the channel through which they were acquired, and the time since they first became a customer. For a more detailed breakdown of these key metrics, read our article on analyzing customer segments. Having a deep understanding not just who the customers are, but also how they interact with your brand, will enable you to create a BMP that resonates with your customers on a personal level.
However, embarking on the BMP journey is not without its pitfalls. One of the most common mistakes businesses make is not having a clear definition of their goals and measurable Key Performance Indicators (KPIs). Without these, it’s challenging to gauge the success of your marketing efforts or to understand the return on investment.
Another critical aspect is the development of tactics or offers that drive desired results for the target audience segment. This process requires time, creativity, and a deep understanding of the audience’s needs and preferences. It’s not just about coming up with an attractive offer; it’s about ensuring that the offer aligns with the values and expectations of your customer base. This is why leveraging a strategic framework like a BMP is important. It ensures that you explore each of these key elements in depth and avoid common mistakes.
In the next sections, we’ll explore actionable steps to create and implement an effective Behavioural Marketing Plan, ensuring that your marketing efforts are as impactful and customer-centric as possible.
Actionable Steps – A Step-by-Step Guide
Step 1: Define Your Goal
The cornerstone of a successful Behavioural Marketing Plan is setting a clear and achievable goal. This goal is typically oriented towards enhancing customer retention – a crucial strategy for sustained business growth. In defining your goal, it’s essential to consider the specific nature of your industry and product.
In the focus of customer retention, there are generally a few key goals to explore:
- Increasing the Retention Rate: This goal involves strategies focused on getting a higher percentage of customers to make repeat purchases. It’s about turning first-time buyers into loyal customers.
- Increasing the Average Order Value (AOV): This goal involves strategies aiming to increase the amount customers spend on each purchase. Be cautious with this strategy. While upselling can increase immediate revenue, it must be balanced with the customer experience. Overemphasizing upselling might negatively impact your relationship with customers.
- Increasing Purchase Frequency: This goal involves strategies that aim to shorten the time between purchases, encouraging customers to buy more frequently.
When choosing a goal, be aware that not all goals are suitable for every industry. The effectiveness of these goals hinges on the purchasing patterns of your products. For products with sporadic or very long purchasing cycles, such as dog lice shampoo or kitchen appliances, focusing on purchase frequency may not be the most effective goal to pursue. On the other hand, if you’re dealing with products that have a predictable and repeatable purchase pattern, like cleaning products or cosmetics, aiming to increase purchase frequency can be an excellent goal.
Choosing the right goal requires a nuanced understanding of your product, your customers, and your market. It’s not just about what you want to achieve but also about what makes sense for your customers and your business.
In the next step, we will look at how to define key performance indicators for your BMP.
Step 2: Define Your KPIs
When crafting a Behavioural Marketing Plan, selecting the right Key Performance Indicators (KPIs) is an essential step. KPIs allow you to know if your marketing strategies ultimately have the impact that you desire for your business. Among the array of KPIs available, certain metrics stand out for their ability to provide insightful and actionable data. Here are the KPIs that we recommend:
- Customer Retention Rate: This measures the percentage of customers who return to make another purchase. It’s a direct indicator of how well your brand retains its customer base.
- Revenue Share from Returning Customers: This KPI highlights the proportion of your revenue that comes from repeat customers, underscoring the value of customer loyalty to your business’s financial health.
- Average Time Between Orders: Particularly recommended for businesses with shorter purchase cycles, this KPI captures both purchase frequency and recency, offering a comprehensive view of how effectively you’re retaining customers and encouraging repeat purchases.
- Average Number of Orders Per Customer: This metric gives insight into the typical engagement level of your customers with your brand over a given period.
- Average Customer Lifetime Value (CLV): CLV estimates the total revenue a business can reasonably expect from a single customer account throughout their relationship with the company.
While all these KPIs provide valuable insights, Average Time Between Orders is often a particularly powerful indicator for many businesses. It not only reflects the frequency of customer purchases but also their ongoing engagement with your brand.
By focusing on these KPIs, especially those most relevant to your business type and customer behavior, you can more accurately measure the impact of your BMP and adjust your strategies for maximum effectiveness.
Next, we’ll dive into how to identify your target customer segments.
Step 3: Define Your Target
The third step in crafting your Behavioural Marketing Plan is to clearly define your target audience. This is where RFM (Recency, Frequency, Monetary) analysis becomes an invaluable tool, helping you to identify your key customer segments.
For instance, you might find a segment of customers who make frequent but low-value purchases. Or, you might identify customers who make high-value purchases but do so infrequently. Each of these segments would be great targets for your BMP.
For those seeking a deeper understanding of how to conduct an RFM analysis, our detailed guide offers a comprehensive look at this process. While we won’t delve into specific tools or software here, the principles and methodology outlined can be applied universally, regardless of the platform you use.
By having a clear definition of your target audience, you can ensure that your BMP is not only strategic but also highly personalized and effective. This step is crucial in ensuring that your marketing efforts are concentrated on the segments that will yield the highest returns for your business.
Step 4: Determine Your Channel
The fourth step in crafting a successful Behavioural Marketing Plan involves selecting the most effective channels for reaching your target audience. There are many channels to choose from such as:
- SMS
- Social media
- Paid ads
- Onsite notifications
While all of these channels offer unique advantages, the most commonly utilized tactics tend to be email and SMS. When deciding between these channels, consider the following:
- Know Your Audience: Start by identifying where your target customers are most active and receptive. Depending on your demographics, they might be more engaged with emails, while others might respond better to SMS.
- Consider the Nature of Your Message: SMS is ideal for short, urgent communications that require immediate attention, such as alerts, reminders, or limited-time offers. Emails, on the other hand, are better suited for delivering more detailed and rich content like newsletters, detailed product information, or storytelling.
- Assess Engagement Levels: Generally, SMS tends to have higher open rates due to its direct and immediate nature. Email, while having lower open rates, allows for deeper engagement with more comprehensive content.
Besides email and SMS, don’t overlook the potential of other channels. Social media and paid ads can significantly expand your reach and engagement, particularly for brand awareness and audience growth. Onsite notifications, meanwhile, can be highly effective for real-time engagement with customers already interacting with your brand.
By strategically choosing a channel, you can ensure that your BMP is not just reaching your target audience but is also aligned with their preferences and behaviors. This step is crucial in making sure that your marketing efforts resonate and drive the desired outcomes.
Step 5: Determine the Tactic
The fifth step in your Behavioural Marketing Plan is to determine the tactic that will effectively engage your target audience. This step is crucial in translating your strategic planning into tangible actions that resonate with your customers.
When considering tactics, it’s important to think beyond traditional methods like discounts. While discounts can be effective in the short-term, they should be used carefully to avoid undermining long-term growth and value perception. Instead, focus on creating a diverse mix of value propositions that cater to your target segment’s preferences and needs.
Some ideas to consider are:
- Special Offers: Tailor offers to the specific interests and behaviors of your target audience. This can include exclusive access to new products, limited-time promotions, or personalized bundles.
- Dedicated Customer Service: Providing exceptional, personalized customer service can significantly enhance customer loyalty and satisfaction.
- Free Gifts: These can be an excellent way to add value to purchases and make customers feel appreciated.
Sneak Previews: Offering early access to new products or services can create excitement and a sense of exclusivity. - Special Access: VIP treatment, such as exclusive events or early access to sales, can be a powerful incentive.
- Large Order Discounts: While discounting should be approached carefully, offering incentives for larger purchases can increase average order values without the potential negative implications of frequent discounts.
The key is to think creatively and focus on what holds perceived value for your target segment. This might involve a deep dive into your customer data to understand their preferences, behaviors, and purchasing patterns. The goal is to develop tactics that not only attract attention but also foster a deeper connection with your brand.
Remember, the most effective tactics are those that align with your overall marketing goals and KPIs, and which resonate authentically with your audience. By carefully selecting and implementing these tactics, you can enhance customer engagement, improve retention, and drive growth.
In the next step, we will explore how to evaluate the results of these tactics and the overall effectiveness of your Behavioural Marketing Plan.
Step 6: Evaluate the Results
The final step in your Behavioural Marketing Plan is evaluating the results. This stage is essential for understanding the effectiveness of your strategies and for guiding future marketing decisions. Remember, depending on the KPIs and tactics you’ve employed, it may take several weeks or even months to see the full impact of your efforts.
Patience is key in this phase. The timeframe for evaluation varies based on the nature of your KPIs and the tactics used. For instance, strategies aimed at increasing customer lifetime value or average order value may require a longer period to accurately assess their impact compared to tactics focused on immediate engagement or conversion rates.
When evaluating your KPIs, consider the following:
- Performance Against Goals: Compare the results with the goals you set at the beginning. How close did you come to achieving them? Were there any specific areas where the plan exceeded or fell short of expectations?
- Trend Analysis: Look at the trends over time. Are the metrics improving, declining, or remaining stagnant? This can indicate whether your strategies are gaining traction or if adjustments are needed.
- Contextual Factors: Consider external and internal factors that might have influenced the results. This could include market changes, competitive actions, or internal operational factors.
- Customer Feedback: Besides quantitative data, qualitative feedback from customers can provide valuable insights into their experiences and perceptions.
The evaluation phase is not just about measuring success; it’s about learning from the data and using those insights to optimize your BMP. Whether the results meet, exceed, or fall short of your expectations, they provide a roadmap for continual improvement and adaptation in your marketing strategies.
Conclusion
From understanding the nuances of your audience through RFM analysis to selecting the right channels and tactics, each step of a BMP offers a strategic approach to enhancing customer engagement and driving business growth.
The key takeaways from this article are:
- Personalization is not just a marketing trend; it’s an expectation from customers that, when met, can significantly elevate their experience and loyalty to your brand.
- A well-defined Behavioural Marketing Plan, rooted in a thorough understanding of your target audience and aligned with clear KPIs, is essential in navigating the complex dynamics of personalized marketing.
- The success of a BMP lies not just in its initial implementation but in the continuous evaluation and adaptation of its strategies based on tangible results and customer feedback.
As we step into a future where customer expectations are ever-evolving, the importance of a Behavioural Marketing Plan is undeniable. Businesses that embrace this approach, focusing on delivering personalized experiences, will find themselves not only keeping pace but leading the pack.
Implement these strategies thoughtfully and watch as they unfold their potential in retaining customers, enhancing brand value, and driving sustainable growth for your e-commerce business.