How Behavioral Analytics Fuels More Personalized Marketing


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If you are like most marketers, you are facing an enormous headwind: you need to increase marketing returns at a time when conventional marketing techniques are increasingly ineffective and real-time dialogue is becoming a norm.

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How Behavioral Analytics Fuels More Personalized Marketing

  1. 1. IBM Software Enterprise Marketing ManagementThought Leadership White PaperOh behave! How behavioral analyticsfuels more personalized marketing
  2. 2. 2 Oh behave! How behavioral analytics fuels more personalized marketingIf you are like most marketers, you are facing an enormous Behavioral web analytics: A gold mine for increasingheadwind: you need to increase marketing returns at a time marketing valuewhen conventional marketing techniques are increasingly Behavioral web analytics isn’t mere theory: many companies areineffective and real-time dialogue is becoming a norm. already applying it to improve their web marketing performance and profitability. Amazon, who has long leveraged webTo improve returns, many marketers are focusing on optimizing behavioral data to make product recommendations, is one of thetheir websites and social media properties to make them more best-known examples, but many other firms are also effectivelydynamic and relevant to their audience. Doing that requires leveraging behavioral web data to personalize interactions.creating dynamic content that supports the interests andpreferences of their various visitor segments. For maximum • A leading online marketplace provides personalized suggestionsimpact and return, marketers must go beyond segment marketing of available items that appeal to traders’ interests based on theirand click reporting and create a personal dialogue with each recent searches, bids, and purchases. This feature has led tovisitor. Behavioral web analytics can fuel this personalization substantial increases in click-through rates.process by providing specific insights about each segment and • A leading online bank uses advanced behavioral web analytics toindividual. Uncover the gold mine that lies within behavioral data, identify customers that abandon an application process andidentify the specific nuggets to mine, and learn how to leverage then deliver a multi wave campaign that recaptures andbehavior data to increase marketing returns at every stage of the converts a significant number of leads. The strategy leveragescustomer life cycle, both online and offline. event triggers that start a communication stream when the online application is abandoned. It draws upon email, directTwo uses of web analytics: Aggregate mail, and even calls from relationship managers. The program has not only boosted conversion rates, but by eliminatingand individual-level insights communication overlap and reducing contact fatigue, it has alsoConventionally, web marketers use analytics at an aggregate enhanced customer loyalty.level, reporting on the performance of their websites and • A leading auto manufacturer has improved the way it prioritizesonline advertising, so they can adjust their efforts to improve leads that originate on its websites. To prioritize leads morethe results. Analytics are a worthwhile application that can effectively, the auto manufacturer profiles each prospect’sdeliver excellent return on investment (ROI). interests based on site behavior and scores the prospect’sHowever, if marketers do not also leverage web analytics as propensity for making a purchase. Leads marked as “hot” arearch source of behavioral insights on visitor segments and twice as likely to close as “average” leads, and six times likelierindividual prospects and customers, they are squandering a to close than “colder” leads. Using this data, dealers can nowhuge opportunity to improve marketing ROI. Web analytics can focus on their best opportunities to drive sales needed a far more direct role in engaging customers, improvingcustomer experiences, and increasing sales, by enabling companiesto deeply personalize their communications and interactions.
  3. 3. IBM Software 3 These insights can be transformed into targeted marketing initiatives at every stage of the customer life cycle (see Figure 2).Figure 1: A web analytics funnel report helps identify individuals you cantarget with relevant marketing offers.Identifying what nuggets to mineBehavioral analysis can reveal actionable insights intosegments, individual prospects, and customers. For example:• Individual personal preferences and current product or content interests Figure 2: Mapping life cycle stages and business goals to initiatives that can• Where individuals stand within the buying cycle or be driven by behavioral analysis customer life cycle• When they are most susceptible to being persuaded, The Typical customer and visitor-level behavioral web converted, or up-sold analytics triggers table on page 4 lists typical website session• When timely action must be taken to retain them events to watch for in various industries.• Which offers are most relevant and persuasive• How much each individual is willing to spend
  4. 4. 4 Oh behave! How behavioral analytics fuels more personalized marketingFor example, a fashion retailer can use behavioral web analytics outbound communications or across inbound channels. Forto profile customers based on the price categories and clothing example, when a customer phones the call center to inquirestyles they are browsing. Marketers can then use these insights about a shipment, the company’s IVR or CRM systems couldto personalize emails with items that match these price levels suggest promotions that fit the same profile.and styles. Similarly, you can leverage these insights in other Typical customer and visitor-level behavioral web analytics triggers (by industry) Retail Finance Telco Publishing B2B Onsite behavioral targeting Product categories Products and Service details Content categories Products and or features studied, educational content studied, example: preferred, example: educational content example: clothes studied, example: regional coverage type of sports studied, example: colors, styles, and IRA calculators maps web pages covering price levels selected technical details on a fashion retailer’s versus business site benefits Remarketing Contents of Abandoned online Cross-sell offers Subscription options When online lead abandoned shopping forms for quotes or received by email or studied but not form is abandoned, carts opening accounts on the site, yet not purchased capture company clicked name through IP address, and target by mail, phone sales, or both On-boarding Bad review rating Missing or failed Same as Finance. After registration, Unsuccessful given after completed events, example: Also, missing visitors don’t return searches in the self- product purchase; or no or unsuccessful click-throughs from to site, or read few help knowledge base failed site searches online registration, or marketing emails content categories or keywords used that for accessories failed site searches indicate issues with performed using the purchased product Cross- and up-sell Products viewed Account options Available service Articles read in a Products studied that frequently together studied but not yet features studied on category that the customer does not owned the site, example: reader doesn’t yet own email access normally use Retention marketing Fewer product Repeated reviews of Review of contract Fewer content Reduced frequency categories viewed, loan payoff amounts duration period, or categories read, and/ of self-service logins less frequent visits, click-throughs from or less frequent visits to the customer or both sites that compare support area, or competitors searches performed in knowledge base with no results found
  5. 5. IBM Software 5Figure 3: Registered customers and their product and spending preferences Figure 4: Five steps to behavioral analyticsas exhibited on the website Stage 1: Site analysis (Reporting)Five steps to Personalized Marketing At most organizations, web analytics begins as a site analysissuccess with behavioral analytics solution, intended to monitor site health, report on-site activity,Many organizations, however, struggle to capture, organize, and prove ROI for the online channel. In this step, web analyticsand effectively leverage behavioral web data to drive marketing answers basic questions such as:programs. IBM has outlined a five-step path to help marketersprogressively mature their capabilities and expand the use of web • How many visitors are coming to my site?analytics from aggregate-level reporting to leveraging behavioral • How are visitors using it?insights to fuel Personalized Marketing. • How are visitors finding it?
  6. 6. 6 Oh behave! How behavioral analytics fuels more personalized marketingStage 2: Site and advertising optimization • What content or promotional offers are best suited forTo begin generating substantial business value, web analytics must targeting each segment on the site?evolve at least to Stage 2: site and advertising optimization. In this • How can I begin leveraging what I learn on my site tostage, web analysts seek to identify bottlenecks; for example, web improve my other communications?pages that aren’t performing well. Marketers experiment toidentify and assess opportunities for overcoming these bottlenecks Stage 4: Personalized Marketing (Online only)and increase returns. Marketers are asking: While marketers who move to Stage 3 are laying crucial ground- work for personalized, customer-centric marketing, they typically• How can I improve our website’s structure and content to find ROI temporarily flattening out. There are limits to the increase conversion rates? amount of value generated through segmentation. Reigniting• How can I reallocate online advertising spend to attract improvements in business value requires innovation — and more profitable customers? personalization.Stage 3: Segment targeting In Stage 4, marketers refine targeting beyond the group level toIn Stage 3, marketers realize that there is no such thing as the individual visitor level. Marketers use individualizedan “optimized page.” That’s because different groups of visitors behavioral analysis to fuel Personalized Marketing; such as, tocome to the same page with different goals in mind. Therefore, in build a dialogue based on each visitor’s past and current behavior.Stage 3, marketers use behavioral analysis to define their most To achieve this goal, marketers ask and answer questions such as:valuable customer segments and identify the dynamic contentthat’s most effective with each segment. For anonymous website • What is the most effective website, email, or SMS contentvisitors, this content may be delivered on the site through for each individual based on prior site behavior?behavioral targeting. Registered online visitors can also be • Should I reach out online to an individual customer righttargeted via personalized email or SMS. Questions that can be now with messages aimed at onboarding, cross-selling,answered include: or retention?• What are the most valuable visitor segments for my business, grouped by common click behavior along with other information I possess about them?
  7. 7. IBM Software 7Figure 5: Using behavioral insights from web analytics to drive Personalized Marketing across offline and online channelsStage 5: Personalized Marketing (Cross-channel) Whether interactions are outbound or inbound, behavioralFinally, in Stage 5, marketers extend the Personalized Marketing analysis can answer questions like:dialogue with identified cross-channel customers to includeoffline as well as online channels. Supported by behavioral web • What is the best way for me to continue my ongoing salesanalytics, offline communications — for example, promotional dialogue with this individual?offers delivered through a call center IVR system — build on all • Based on what I know about this individual’s priorpast and current customer behavior. In addition, insights from interactions and transactions across all channels, what is theoffline customer transactions are used in determining the web or best offer or communication I can make next?email content deemed most relevant to each customer. • When do I make that offer?
  8. 8. 8 Oh behave! How behavioral analytics fuels more personalized marketingClimb the five-step growth path “Click data is too much of a ‘fire hose’: you can’t make sense ofSo how do you move up the behavioral analytics maturity model, every click.” Successful marketers have learned how to focusrapidly and cost-effectively? The table on page 9 defines the their attention on a subset of key online events that are mostspecific organizational know-how and technology requirements likely to drive actions important to their business. These eventsyou’ll need at each stage. include purchase intent, abandoned shopping carts, and clicks that drive content sharing.Make the most of the marketing team “Web analytics is only interesting to the web team, not my team.”you already have Marketers that ignore behavioral web data are disregarding anMany marketing organizations have virtually all the skills they indispensable resource.need to begin applying behavioral web analytics to theirmarketing efforts. However, these capabilities are often spread Online marketers also have their misconceptions:across the enterprise in disconnected teams; for example,separate teams for online versus relationship marketing. To “Marketing is primarily about ‘acquire, convert, retain.’” Thesesucceed, marketing organizations must make it possible for these misconceptions miss the urgent importance of growing eachsiloed resources to work together. They must also overcome customer’s Lifetime Value (LTV) — a concept that is incompletelysome widely held misconceptions about web analytics. expressed by “retention,” and can only be achieved through a more customer-centric approach.For example, some relationship marketers still hold beliefs aboutweb analytics that might have been accurate years ago, but no “I couldn’t possibly look at each individual visitor.” It can’t belonger are: done manually. But your company’s relationship marketers can take advantage of technology that can automate analysis and“Web analytics is summary-level data; it isn’t useful for behavioral action at the level of individual” Today’s best web analytics solutions — notably the IBMEnterprise Marketing Management (EMM) Suite — providesbehavioral profile data at the visitor/customer level in a readilyaccessible web data mart.
  9. 9. IBM Software 9Typical behavioral analysis based marketing triggers (by industry) Stage 1 Stage 2 Stage 3 Stage 4 Stage 5Requirements Site analysis Site & ad optimization Segment targeting Personalized Personalized (Reporting) Marketing online only Marketing online + offlineOrganizational maturity Define site and Set improvement Identify key segments Commit to Commit to a marketing goals goals, and manage relevant to the personalization and customer-centric clearly, so they toward them; prioritize business, and see relevancy as your business strategy that can be translated testing above the company/website paradigm of doing encompasses and into web analytics subjective opinions through the eyes of business online integrates all channels Key Performance representatives from (versus ”spamming”) Indicators (KPIs) each segmentsKnow-how and skills Measure what Design and run tests, Discover meaningful Link site visitors Link the identity of matters, instead of understand their behavioral segments to their registered customers across attempting to measure statistical significance, from click data and customer information online and offline everything and act on the results visitor registration and identify the life channels and identify by adjusting websites information using web cycle events that the life cycle of or ad spend allocation analytics and data are actionable for actionable events for accordingly mining techniques marketing marketingTechnology for customer Self-service access to A/B analytics for Segmentation Web data mart Web data mart forawareness personalized metrics website and online analytics (Example: that provides open, online interactions, for each role in the advertisements web analytics and secure access to as well as access organization data mining solutions) granular data on each to offline history for both click data and individual’s website of transactions, registered customer interaction history campaigns, and data responsesBehavioral targeting/ N/A Assign visitors Define business Select the most Choose the mostdecisioning technology randomly to test rules for targeting effective content for effective marketing groups segments, and each individual online communication or of use self-learning customer in real time, fer for each customer, mechanisms to refine reflecting past and reflecting past and targeting current click data, current interactions customer insights, and both online and offline business rulesTechnology for delivering N/A A/B test automation Deliver targeted Deliver targeted Cater targeted contenttargeted content for site & content to each content to each to each individual, advertisements segment via site individual via regardless of the advertisements, personalized site inbound or outbound recommended content, email, SMS, channel each content or products, or other means interaction occurs in email, SMS, or other means
  10. 10. 10 Oh behave! How behavioral analytics fuels more personalized marketingIBM can help you take the next step About IBM Enterprise MarketingOur EMM suite helps companies drive business value by Managementoptimizing their marketing relevancy for each segment and The IBM Enterprise Marketing Management (EMM) Suite isindividual customer or prospect. Our leading Personalized an end-to-end, integrated set of capabilities designed exclusivelyMarketing solutions give marketing organizations the capability for the needs of marketing and related organizations. Integratingto capture web behavioral data and then identify and act on and streamlining all aspects of marketing, IBM’s EMM Suiteinsights to engage customers in a relevant dialogue. IBM knows empowers organizations and individuals to turn their passion forwhat works and how to overcome the obstacles. If you are ready marketing into valuable customer relationships and moreto trans-form web analytics from a mere aggregate-level profitable, efficient, timely, and measurable business outcomes.reporting tool into a powerful enabler of behavioral analysis andtargeting, it’s time to learn more about what IBM solutions can Delivered on premises or in the Cloud, the IBM EMM Suitedo to improve your marketing ROI. of software solutions gives marketers the tools and insight they need to create individual customer value at every touch. The IBM EMM Suite helps marketers to understand customer wants and needs and leverage that understanding to engage buyers in highly relevant, interactive dialogs across digital, social, and traditional marketing channels.
  11. 11. IBM Software 11Designed to address the specific needs of particular marketing and For more informationmerchandising users, the IBM EMM Suite is comprised of five To learn more about IBM’s web analytics offerings, please contactindividual solutions. Digital Marketing Optimization enables your IBM marketing representative or IBM Business Partner, ordigital marketers to orchestrate relevant digital interactions to visit the following website: and retain new visitors and grow revenue throughout thecustomer’s lifecycle. With Customer Experience OptimizationeCommerce professionals can turn visitors into repeat customersand loyal advocates by improving the digital experience of everycustomer. With Cross-Channel Marketing Optimizationcustomer relationship marketers can engage customers in aone-to-one dialogue across channels to grow revenue throughoutthe customer’s lifecycle. Price, Promotion and Product MixOptimization allows merchandisers and sales planners to makeprice, promotion and product mix decisions that maximize profitand inventory utilization. And with Marketing PerformanceOptimization, marketing leaders, planners and decision-makerscan model and assess mix, and manage marketing operationsto maximize ROI.Over 2,500 organizations around the world use IBM EMMsolutions to help manage the pressures of increasing marketingcomplexity while delivering improved revenue and measurableresults. IBM’s time-tested and comprehensive offerings aregiving companies such as Dannon, E*TRADE, ING, Orvis,PETCO, Telefonica | Vivo, United Airlines and wehkamp.nlthe power and flexibility required to provide their customersand prospects with what they expect today — a more consistentand relevant experience across all channels.
  12. 12. © Copyright IBM Corporation 2013IBM CorporationSoftware GroupRoute 100Somers, NY 10589 USAProduced in the United States of AmericaFebruary 2013IBM, the IBM logo and are trademarks of International BusinessMachines Corp., registered in many jurisdictions worldwide. Other productand service names might be trademarks of IBM or other companies. Acurrent list of IBM trademarks is available on the Web at “Copyright andtrademark information” at: document is current as of the initial date of publication and may bechanged by IBM at any time. Not all offerings are available in every countryin which IBM operates. The performance data and client examples cited arepresented for illustrative purposes only. Actual performance results mayvary depending on specific configurations and operating conditions.THE INFORMATION IN THIS DOCUMENT IS PROVIDED“AS IS” WITHOUT ANY WARRANTY, EXPRESS OR IMPLIED,INCLUDING WITHOUT ANY WARRANTIES OF MERCHANT-ABILITY, FITNESS FOR A PARTICULAR PURPOSE AND ANYWARRANTY OR CONDITION OF NON-INFRINGEMENT. IBMproducts are warranted according to the terms and conditions of theagreements under which they are provided. Please Recycle ZZW03004-USEN-01