What is Behavioral Tracking?
Have you ever thought about how a product you search for once suddenly starts appearing everywhere in your feed? In all the ads and suggested content, too. How does that happen?
Well, it happens because businesses use 'behavioural tracking' to collect data which monitors and records your online and offline activities. With its help, they understand better what your demands and preferences are and how they influence your decision-making patterns. It is collected by tracking your online actions such as website visits, time spent on a web page, purchases, as well as downloads. Once it becomes clear as to what the preferences of users are, all the businesses can then plan and execute their marketing strategies effectively. They can deliver customized experiences for the targeted users.
There are various tools that are used to track the data. For instance, cookies, pixel tags, and tracking scripts. These are embedded in websites. They are used in tracking online behaviours. Whereas, loyalty programs and purchase history are used in tracking offline behaviours. This behavioural tracking allows businesses to understand their users patterns better and plan their strategies according and effectively.
Why Should We Use Behavioral Tracking?
All the businesses that aim to customize their strategies, improve their customers satisfaction and boost revenue, behavioural tracking can offer many benefits.
1. Personalized Marketing
Since businesses get an insight into the preferences and habits of their targeted consumers, they can personalise their marketing strategies accordingly. For instance, personalized ads, product recommendations, and tailored marketing campaigns which align with the interests of a user. By doing so, they increase chances of engagement on their content. Take Netflix for example: It uses behavioural tracking to assess the choices of its user based on their watch history. It helps in recommending them more similar content that goes with their taste.
2. Enhanced User Experience
The data which is collected from behavioural tracking helps in improving websites and application designs. Because once the problematic areas or popular sections are known, companies can make things easier for users to find and use. Which allows the users to have a better and engaging experience.
3. Improved Conversion Rates
If businesses can influence the decision making of users, they can successfully have more purchases. Once they are aware of users' preferences, then they can present them with different offers and recommendations to encourage them to make a purchase. For example, if a user abandons an item in the cart, they get reminded of it to complete their purchase. Sometimes they are even offered discounts to further encourage them.
4. Data-Driven Decision-Making
Once the businesses get an insight into which ads worked best with their targeted consumers, they can focus on improving their future marketing strategies accordingly. This way marketers can wisely spend their budget on ads.
Challenges in Behavioral Tracking
There are many benefits that behavioural tracking offers, but it has a few challenges as well:
1. Privacy Concerns
Invasion of privacy is one of the major concerns. Since it collects a lot of information on users' personal data without their knowledge or consent, they can lose trust. Privacy laws, such as the General Data Protection Regulation (GDPR), require companies to ask for users permission and to inform them about their data collection practices.
2. Ethical Implications
Consumers may start feeling manipulated and controlled if they feel like they are being monitored and tracked constantly. So, it is very important to draw a healthy boundary. Businesses must know how to strike a balance between personalisation and the autonomy of users.
3. Data Security Risks
Since a large amount of personal data is collected and stored, there is a huge risk of privacy breach. This information can be stolen or leaked. And If the sensitive information of a user does get stolen or leaked, then it can have serious consequences for the company. Not only can their reputation be ruined, but they might also have to face legal problems .
4. Regulatory Compliance
All businesses and companies must follow strict laws in order to maintain the trust of their users, and avoid huge fines. They must follow the laws about how they collect and use the data. For instance, the GDPR law in Europe and the CCPA law in California.
Best Practices for Behavioral Tracking
In order to use behavioural tracking properly and ethically, following are the best practices for organisations to follow:
1. Obtain Explicit Consent
One of the best behavioural tracking practices is to inform the users that their data is being tracked. Their consent must be sought. It can be done by using clear and accessible language in cookie consent banners and the privacy policies of a website.
2. Anonymize Data
Anonymizing the data can be the best way to protect the identity of an individual's data. For example, the use of a unique identifier can be used instead of storing the personal information of a user. This way the stored information won't track back to individuals.
3. Secure Collected Data
The collected data must be securely stored in order to prevent it from being stolen or leaked. It can be done effectively if its access to unauthorised people is restricted. And all the companies must use strong security measures such as encryption and access control to make it possible.
4. Regularly Audit and Update Policies
Companies should keep their privacy policies clear and up to date. These policies must explain to the users how their data is being collected and used. By doing this, not only will they be following the legal rules and regulations, but they will also be building the trust with their users.
5. Use Data Responsibly
Another best practice is to use the collected data responsibly. Otherwise, the reputation of a brand can be damaged. If a brand excessively tracks the users, and pushes deceptive offers to them, then this can be seen as misuse of data. This practice can also come across as manipulative to the users, and can also harm them.
How to Implement Behavioral Tracking
A systematic approach is needed to implement behavioural tracking:
Step 1: Define Objectives
First of all, the goal of behavioural tracking must be clear from the start. For example, is the goal increasing sales, or improving the retention of users, or is it to enhance a website's performance? Knowing the objective clearly can help in focusing on the efforts through which data needs to be collected.
Step 2: Choose the Right Tools
Knowing the needs of your business, and then selecting the right tracking tools that align with it is mandatory.These tools must also abide by the law. Some of the popular online tracking tools include Relevic, Google Analytics, Hotjar, and Facebook Pixel. Whereas, CRM systems are used for tracking offline behaviour.
Step 3: Identify Key Metrics
For using the metrics effectively, it is important to know what they are being used for to monitor. Which actions of the users are needed to be tracked? Is it page views, click-through rates, purchase behaviour, or app usage? This objective must be clear.
Step 4: Implement Tracking Mechanisms
Incorporate tracking mechanisms such as cookies, tags, or beacons, into your website or app. And use event tracking to capture specific user interaction.
Step 5: Analyze and Act
To get the most out of behavioural tracking, make sure to analyse it on a regular basis. For example, if most of the users are leaving items in the cart, then launch an investigation to find out the reason. Whether they do so due to high cost, or because of a tiresome checkout process? Once the problem is known, try fixing it as quickly as possible.
Examples of Behavioral Tracking
1. E-commerce Personalization
Amazon uses behavioral tracking when it comes to recommending products on its website. Their recommendation is based on users’ browsing and purchase history. They also use features like "Customers also bought" or "Frequently bought together" to guide and encourage new users to make a decision without hesitation.
2. Retargeting Ads
Retargeting of Ads has proven to be a successful campaign for businesses. Once they have the data, they can track down their users and encourage them to return to the site to take action. For example, if a user leaves a travelling site without booking any flight, they are reminded of it by showing relevant ads on the other platforms that they use. This serves as a reminder to encourage them to complete their bookings.
3. Customer Loyalty Programs
To reward its loyal customers, retailers like Starbucks also use behavioural tracking. On their app, they keep a track of the purchases of their users. And on its basis, they customize rewards such as offering free drinks or discounts.
4. Subscription-Based Services
Subscription based service offers have also been made possible with the help of behavioural tracking. For example, Spotify tracks the listening habits of a user to recommend them more playlists and artists that match their taste. This not only enhances the experience of a user, but also encourages them to continue their subscription with the app.
5. Healthcare Applications
Health-care providers also use behavioural tracking to monitor the engagement of users on their health apps. By keeping the record of an individual's history, they can intervene by sending a reminder. For example: Step counter apps monitor the daily steps of its users. They have to select a daily step goal. If they fail to do so, the app sends them a reminder to encourage them to take more steps. This make the health outcomes better.
Conclusion
Nowadays, Behavioral tracking is a powerful tool which helps businesses grow successfully. Once they get an idea of what the needs, demands, and preferences of their users are, they can plan their strategies accordingly to make them effective. Insights gained from the data helps in targeting specific consumers and bringing about a satisfactory experience for them. But to make better use of behavioural tracking, it is important to address and overcome the challenges faced in its implementation. This is the only way to make it beneficial for businesses and consumers alike.
