The heart of behavioral targeting, or behavioral marketing, starts with measurement. That measurement can take place online, where businesses can obtain robust segmentations and behavioral data, or it can take place using surveys, DMA lists, media segmentation, or by simply breaking down the composition of the body of individuals with access to your message. By understanding who might see your message, you can better predict those who will effectively digest it.
As programs that measure and draw inferences from user behaviors mature, those related insights can provide valuable perspectives on where segments diverge. Whether you are a small services provider or a global retailer, using this data can help maximize the lifetime value of your customers.
To draw a comparison, take two restaurants: Pat's King of Steaks (of Philly cheese steak fame) and The Palm (a high-end steakhouse chain). Pat's is successful in that it has a grand distribution model built around a dog and pony show. You order a steak in line by simply referring to "Cheese Wit" or "Wit-Out." You're not making a decision based on any other factor than whether you are willing to eat onions.
On the other hand, take The Palm, which has 18 menu variations per steak. In order to appeal to its target market, the creative team who constructs the menu needs to carefully choose their words and craft the delivery to massage the expectations of the guests. Essentially, the Cheese Wit at The Palm is, "Sliced Filet with Cippolini Onions and Wild Mushrooms and Boursin Glaze." Where the former is appropriate for a shopping trip or capping off a late night visiting friends, the latter more effectively conjures a dinner date or private dining. The offline experience clearly participates in what your expectations are when interacting with either of these "brands."
Consider the lifetime value calculation of a customer for each of these businesses. Pat's depends on maximizing your engagement and revenue on an ad-hoc basis. For its profitability to increase, it has to handle every transaction personally, enthusiastically, and on the premise that it probably won't see or recognize you ever again. While Pat's has your attention, it has to point you to the t-shirts and other odd items, along with its limited menu of side items, to sell you. It markets on "tradition" and leverages that to send you to other local businesses that it has agreed to push on tourists. Pat's consumes your attention, makes its play, and redirects you to the best possible course to make you move its widgets. On the other hand, The Palm, its model is based on many fulfilling experiences, in many locations, over what it hopes will be a lengthy courtship.
Strangely enough, this is where the two brands converge in approach. The key is enriching the touchpoints, which are pivotal to serving the right message at the right moment, to the right people, when they're most capable of acting on it. With analysis of online response data from collection systems, The Palm can build tradition and distribution into social strategies and redemption mechanisms without resorting to selling t-shirts, which might damage its brand positioning. It can align its menu with brands of wine that appeal to its market based on sales data, and reinforce these through its Web site.
Further, the dynamic medium of the Web allows The Palm to alter those combinations based on geotargeting, user interactions, input strings, time of day, or referring venues. Better still is that the tools exist now that allow relatively nontechnical users to test and deploy these strategies to best optimize the personal preferences of the user based on who they are offline and by what they do online. Each positive step in optimization increases the chances of impacting the marketplace of potential--increasing lifetime value.
Offline or online, the fundamentals of providing recommendations, offers, and customization is the same, with the speed and delivery mechanism being the difference.
Read Andrea Fishman's previous article, "Soft Sell vs. Hard Sell: What To Say And When."