Behavioral Targeting and the Loyalty Exchange

An ounce of loyalty is worth a pound of cleverness. –Elbert Hubbard

I find the above quote fascinatingly descriptive and relevant to a dimension of behavioral targeting that’s often shadowed by direct response and branding: CRM (define).

Since its 2004 renaissance, behavioral targeting has been viewed and portrayed as the sophisticated media buying model. One main reason, of course, is because the platform is founded on not only technological advancements but also a synthesis of consumer insights and intelligent gathering of online consumer data and activities. In essence, behavioral targeting is perceived as smart targeting because the rules (such as segmentation, profiling, predictive modelling, etc.) are more complex than buying CPCs (define) and CPMs.

Being a smart marketer in today’s society isn’t about the size of one’s marketing budget. It’s about deeply understanding one’s customers and cleverly using the available tools to deliver the best experience to increase loyalty. Behavioral targeting can help establish a strong CRM program.

CRM Is Learning About Your Customers

Customer behavior is the true measure of customer loyalty. Online has the unique ability to capture consumers’ activities and, consequently, to allow marketers to study trends and patterns to develop CRM programs.

Fundamentally, CRM puts customers at the design epicentre. It’s about getting intimate with customers, understanding their needs, and developing products to cater to these needs. The idea of a behaviorally targeted CRM program is it can help businesses gain insight into customers’ behaviors and value. By aggregating and tracking consumers’ online activities, visits, and clickstreams, marketers can use the insights to redefine the target segments for future marketing efforts.

If implemented successfully, it won’t only simplify the marketing and sales processes; it can also uncover new customer segments while increasing the lifetime value revenue of current customers.

Web Site Loyalty = Brand Loyalty

Brand loyalty is when the consumer continues to buy your brand, despite her other options. Online has become the digital extension of the brand experience. Unparalleled interactivity thus fundamentally mended the gap between off- and online brand loyalty.

This means the experience and content of a brand’s Web site is a perfect platform for CRM engagement.

Recently the Online Publishers Association (OPA) and the Media Management Center at Northwestern University published the results of their “Online User Experience Study.” The study finds a high correlation between how entertaining or absorbing visitors find sites and their consequent usage of these sites. The more a site can engage visitors, the more frequent they return and the longer they stay. CRM holds the key to providing the experience consumers need to increase their Web site, and brand, loyalty.

What Does This Mean for Online Media?

In most behavioral targeting discussions, vendors, publishers, and agencies seem predominantly consumed with how behavioral targeting can reach the target audience and deliver the messaging in a cost-effective, relevant manner. Investigating non-media-related business operations unfortunately is often not media agencies’ responsibility.

Don’t get me wrong. How the technology works is critical to the success of any behaviorally targeted campaign. But to elevate current industry competence, we also need to expand a media-centric view and remind ourselves brand loyalty is an even exchange; customers pledge their allegiance to brands because those brands make the effort to know them.

As media professionals (especially in an increasingly ROI-driven landscape), we’re often only accountable for the acquisition side of the business. It’s easy to forget the fact marketing (branding or direct response) is only half of the success equation for selling products. The most critical part of business isn’t the marketing/sales front end, but the back-end customer relationship and retention efforts.

We all know it costs more to acquire a new customer than to retain an old on. The Reichheld Loyalty Effect says a 5 percent retention rate increase can lead up to a 75 percent increase in customer profitability. As behaviors don’t occur in a vacuum (there’s always a cause and result of a behaviour), behavioral targeting can help us decipher consumers’ activities online. It can target the audience on the front end (media planning/buying) and aggregate behavioral data on the back end (site side data) to complete the communications loop and increase brand loyalty.

As Jeremy Bullmore, a world-renowned creative at JWT, once said, “Brands exist only in the minds of consumers.” Only through learning and understanding can brands continue to reinvent themselves to entertain fickle modern consumers and keep themselves top of mind.

Clever targeting may cost more than a pound, but the loyalty exchange is priceless.

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