“What was the front page ad in today’s newspaper? Did the ad target a specific type of reader? If yes, then what about all the other readers who found the ad irrelevant?”
That just about sums up the rationale for behavioral targeting of online communication. All eCommerce businesses, except the extremely narrow niche players, cater to multiple customer types.
For instance, an apparel business targets men and women, grown-ups and children, brand conscious, and bargain seekers.
So how would an eCommerce business “talk” to all of them at the same time, and still make sense?
In print advertising, media planners often talk about “demographic targeting.” But with all the targeting possibilities that online media provides, demographic targeting is too limited.
There is a method to create relevant customized messages — it is called behavioral targeting.
As an eCommerce business, you can observe the customer’s online behavior, and customize your communication.
Types of Behavioral TargetingBehavioral Targeting: How eCommerce Businesses Use Behavioral Targeting to Communicate Effectively
There is no standard definition of what constitutes behavioral targeting. Here are some of the methods used by eCommerce businesses:
I like to call it, “online ads that follow you,” which has revolutionized online advertising. Imagine that I am an eCommerce business attempting to attract customers to my latest automobile offering.
I will be much more willing to spend money on advertising to you if you recently visited the “latest deals” page on my automobile site.
Even when you exit my website, I want to continue talking to you. So, I would purchase advertising, on other websites, that is displayed specifically to you.
I could tailor my advertising to display customized ad creatives to you based on your clickstreams.
An eCommerce business usually has a large array of offerings. So which ones does it highlight? Which ones does it feature on its homepage?
By analyzing the visitor’s clickstream, the eCommerce website can be personalized to highlight products that the specific visitor is more likely to be interested in.
Website personalization is an effective method of increasing shopping cart conversion.
Use Clickstream Analysis to Understand Customers
It sounds like a stream of clicks, and that is exactly what “clickstream” is. More formally, you could define clickstream as data about which links a user clicked, and at what point in time.
Come to think of it, of the billions of hours that all of us cumulatively spend on the Internet, we primarily perform 3 tasks: read, type, and click.
So if businesses could access information about what you click and when they could pretty much unravel the great mystery that is you — the customer.
In some ways it does sound like “big brother is watching,” doesn’t it?
How do Businesses Get Access to Your Clickstream?
Most surfers do not know this, but there are many places that your clickstream gets stored. If you access a website, the server that hosts the website keeps track of the links you click.
Besides, your web browser stores your clickstream, not to forget your ISP’s routers and servers of ad networks that have code placed on multiple websites.
While on the one hand eCommerce businesses could mine and analyze clickstream data on their websites, on the other clickstream data can be purchased.
Some of the information that clickstream data seeks to capture is:
- Where was the visitor before she reached my website?
- If a visitor came in from a search engine, what search term did she use?
- What webpage did the visitor first access on my website?
- What pages did the visitor access on my website? In what sequence?
- How much time did the visitor spend on each page?
- When and where did the visitor click the “back” button on the web browser?
- What items did the visitor add to (or remove from) her shopping cart?
What was the page at which the visitor exited my website?
Isn’t it interesting that businesses have all that information about you? Does that leave you feeling concerned? You are not alone. Privacy concerns accompany any discussion on clickstream data and analysis.
There have been many landmark court cases related to behavioral targeting based on clickstream data.
Examples of Clickstream Analysis
The application of clickstream data is only limited by your imagination. Here are some ideas:
If you find that many people are visiting your website from a certain set of websites, you could consider catalyzing the process by advertising on those sites
You could analyze the top exit-pages on your website to figure out whether there is something about those pages that are turning people away.
Maybe you are asking for some information that visitors do not want to provid
Are some of the search terms that visitors are using to get to your website converting exceptionally well? If yes, you could consider bidding on those search terms using advertising programs such as Google Adwords
If a visitor is a registered user of your eCommerce website, you can correlate their clickstream with the demographic information your registration form has already captured. This could trigger email communication with highly targeted offers.
Clickstream Data Analysis Privacy Concerns
Without meaning to sound alarmist, you should know that every time you navigate around the Internet, you are leaving behind a trail of data.
But it is tough to not be alarmist. While the data in the clickstream may not contain personally identifiable information, it is possible that further analysis could generate personal data.
An interesting case in point is the historic AOL search data leak of 2006. AOL released anonymous search data for research purposes.
But the New York Times was able to identify a specific person named Thelma Arnold, as one of the persons whose searches were in the released data. So your clickstream may not be anonymous after all.
It is not just about which product to highlight, it is also about the type of deal that would work best for you. For instance, if an eCommerce merchant sees that you have visited his Swedish massage page multiple times, he could offer you a small discount to nudge you towards making the purchase.
eCommerce players could analyze your movement around their website and trigger an instant email to you with a relevant marketing message.
This kind of personalization would make that email stand out among the hundreds of untargeted marketing messages that spam your inbox.
How Is Behavior Measured?
Measuring behavior is not as simple as making sweeping judgments about the customer based on the webpage they visited.
Here are some of the common tools that web analytics software packages track to help make targeting decisions:
- Number of pages per session
- The IP address of the visitor
- The location of the visitor
- The specific pages visited
An eCommerce business may be able to get much more information such as gender, education, marital status, and interests if they can extract it from the customer’s Facebook account.
For this, the customer will explicitly need to permit them.
Behavioral Targeting Privacy Concerns
While eCommerce vendors will cry themselves hoarse, defending the fact that they target based on anonymous data, consumers will never be at ease as they know that their behavior is being tracked and stored.
Worse, the data is probably being sold to advertisers. Privacy issues have also given rise to the likelihood of strong regulatory action on behavioral targeting.
When it Comes to Online Merchandising
So, you are ready to take your business online? It’s going to take more than a nice website design and shopping cart.
Get prepared you are going to have to learn a little bit about online merchandising.
An eCommerce marketing plan deserves an online merchandising strategy – especially if you desire to be successful.
Let’s talk about the basics first.
You have to make shopping easy! Can your customers find your product?
Have you built in that dynamic search tool that will help someone find what they are looking for, right when they are looking for it?
57% of website users are going to search when shopping, if you don’t give them that capability and provide them relevant results you will lose them.
That’s right, lose them. Customers will abandon a shopping site if they can’t find what they are looking for.
This means coming up with every variation that you think your consumers will search on. Did you know that if a consumer searches for a product and finds it, their conversion rate is 2.7% higher?
I think I have your attention now, so let’s look at the other best practices of online merchandising:
Intuitive Navigation and Product Findability
Match your buyer’s intentions with your business goals. While many people search, they also like to navigate your site. I like to call this browser shopping.
Think of it is as window shopping. They are on your site because they have an interest in what you are offering, now you have to get them to the right product.
The product that offers them the features and benefits they are looking for. Make browsing easy, but take out the guesswork.
If I have to walk to the back of the store to get the milk, I may just decide to visit a store that makes a quick stop for a gallon of milk easier.
Shopping should be easy, intuitive, and a great experience. Know your customer, so you can help them find what they need.
You can include the search process in this as well, merchandising in a way that your know your customer’s search, some call this merchandising.
Give them a product-finding experience. If they want a blue shirt in medium, help them find it. Every customer that visits your website is a sales opportunity. Are you encouraging that transaction or discouraging it?
Your website is your online storefront. Make sure that you’ve designed it in a way that converts sales. Your clicks turn into sales and the more clicks the fewer sales.
Your merchandising zones are the use of product pages and even the checkout process. Provide your visitors with gift suggestions, promotions suggested products, and even substitutions.
Your merchandising zone is where you can up-sell, cross-sell and promote other products. Don’t ignore this zone, use it to your advantage.
Online Shoppers Love a Deal
It’s a proven fact that online shoppers love a deal. They like to think when they purchase online they are getting the best deal for their money.
I’m always amazed at the online merchants that want to keep their specials a secret. “Let’s only show them if they look for it.” If you think about it offering your online shoppers a promotion or special serves as a nice surprise or bonus and can often entice them to buy more.
After all, they would have more than likely purchased from you anyway, but now you have just improved their shopping experience and now have them thinking how they could spend those extra dollars that they just saved because you offered them a special discount, just for being your customer. Stop being stingy, reward your shoppers.
Make It Easy
Make it easy for your online shoppers to buy. If you are doing a promotion or even an email campaign consider creating landing pages that making the shopping process easy.
These landing pages can focus on a specific product, a specific brand, or even a specific category. The idea is to make it simple.
Landing pages are a perfect way to customize and personalize the experience and make it a positive event.
You will also find that specific landing pages highlighting a product that is driven from an offsite campaign can do wonders when it comes to increasing the conversion rate.
You will also find that if you are using search engine marketing this is a great way to get more “bang for your buck.” There are fewer distractions and highly customized messages that can increase sales.
Know Your Customers
Last, but certainly not least, know your customers. Know how to sell to specific segments. Know their needs, know their language, know what’s important to them.
If your goal is sales, which I know it is or you wouldn’t be reading this, you have to know what will make that person pull out their credit card and purchase.
This knowledge will not only help you in converting first-time buyers but will turn those buyers into repeat customers.
Use your market segmentation knowledge and the personalized information you collect from customers to merchandise to specific consumer groups that you have identified.
Put your shoppers in categories and groups that make sense. You can segment by size, lifestyle, activities, etc…
Take some time to dig deep into who you are customers are and create personas if it helps to divide them into segments that you can identify their shopping needs, wants, and desires.
Customer Service Can Cost Your Business
The mantra that a customer “Is Always Right” is still spoken but hardly followed anymore. Some companies are used as punch lines when it comes to customer service.
If a customer is waiting for the cable guy, they know that the appointment rarely means anything and that the cable man will show up sometime before dark.
However, there are other companies that provide such good customer service that they may border on overkill.
Customers May Take Advantage of Customer Service that Is Too Good
No one can complain when a company offers good customer service. The problem is some customers may take advantage of a good company.
If a customer complains in a restaurant about their meal, the manager may compensate them to keep them as a paying customer.
Those same customers may come back to the same restaurant and try to complain each time, in hopes of getting a free meal.
Loss of Money for Customer Service for Delivery and Shipment
Really good customer service can also cut into your profit margin. For instance, if your company delivers customer products via cars and trucks, you will have to factor in gas when you crunch the numbers.
In the last decade, the price of gas has skyrocketed to the point that some companies have gone out of business. Let’s say you offer a free pickup service to your customers.
If your prices do not reflect this freebie, you may be losing money on every sale. Sure the customers are satisfied, but your business cannot stay afloat if you’re losing money.
The same is true for businesses that operate online only. If someone has an eBay or online store, they will have to engage in shipping to send customers their products.
Many online stores offer free or reduced shipping. This is fine for a large business.
For smaller online stores or home businesses, shipping can be expensive depending on the product. Offering to ship everything for free may not work out in the long-term scheme of the business.
Balance Business with Customer Needs
Bad customer service will cost a business its customers and reputation. However, businesses should also be aware that their customer service can be too good.
Take care of the customer without making them feel like they’re standing under the spotlight.
Quickly tend to customer problems and concerns but watch out for customers who are simply at your business to take advantage and gain freebies. Give customers what they want and need but don’t coddle them.
Finally, if you make appointments, always make sure that workers show up on time and call when they will be late to keep the customer up to date. Customer service should be good, not extreme.
About the author: Diane H. Wong used to be a business coach. Besides, she is a writer at DoMyWriting so she prefers to spend her spare time working out marketing strategies. In this case, she has an opportunity to share her experience with others and keep up with advancing technologies.