What is Behavioral Analytics and 5 Ways It'll Contribute to Your Business

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    Home / Growth / What is Behavioral Analytics and 5 Ways It'll Contribute to Your Business

    Have you ever wondered what big corporations like Google and Facebook know about your online behavior? These companies use behavioral analytics to improve their services and make money. We'll get into that. 

    Data has always been the not-so-secret sauce but the necessary devil in the digital marketing world–where the competition is fiercer than ever before. That's exactly why businesses are always looking to learn more about their customers, such as what they buy, when they buy it, and more.

    If a business could know this information, then that can better serve their customers and help grow sales. This is where behavioral analytics comes into play. Behavioral analytics is the study of customer behavior. We'll cover the definition of behavioral analytics, what it's used for, and the ways it can contribute to your business.

    What is Behavioral Analytics?

    what is behavioral analytics

    Behavioral analytics is a way of measuring and understanding user behavior in order to improve your digital product. It is used in project management to ensure that a product meets users' needs. The analytics are also used to understand the user experience and must be ongoing so that you can constantly make changes to improve the product.

    For example, if you have a SaaS product, you might use behavioral analytics tools to detect bottlenecks or trends that dominate your users' interaction with your product. This way, you can spot the areas to improve.

    Behavioral analytics can help you understand what features users are interacting with most often so that you can create more content around those features. As opposed to demographic data, behavioral analytics focuses on actions users take on a website in order to collect data about all types of users, not just the demographic that they fit into. 

    Real-life example:

    You may have noticed online advertisements tailored specifically to your interests based upon your browsing habits; this is an example of behavioral analytics at work. Behavioral analytics often includes the use of cookies or other computer software in order to track users as they move around a website or even across multiple websites.

    Or let's give a more down-to-earth example, think of Netflix recommendations; how come it nails to push the shows you'd exceptionally be interested in? Netflix is one of the strongest platforms that utilizes behavior analytics to the core. It collects users' behavioral interactions on the platform to personalize their experiences.

    Why is Behavioral Analytics important?

    The purpose of behavioral analytics is to make sure that your digital product meets user needs. This means that it is important to know what the users want and need from your product and how they are using it. Behavioral analytics monitors users' actions, such as: 

    • What website they visit,
    • How long they spent on the site, 
    • If they clicked on anything or not. 

    Additionally, it can also help you monitor how many times a user performs an action with your product, such as how many times a user purchased an item or how many times a user shared your content on Facebook.

    To sum up, behavioral analytics is vital for product growth since it provides information about how often users perform an action and whether that action was successful or not. If a specific action was successful more than once, then you can conclude that the task probably works properly. 

    Todd Yellin, Netflix's VP of Product Innovation, hints at the importance of analyzing consumer behaviors in an interview with Mashable:

    "It really doesn't matter if you are a 60-year-old woman or a 20-year-old man because a 20-year-old man can watch Say Yes To The Dress, and a 60-year-old woman could watch Hellboy."

    Todd Yellin, VP of Product Innovation at Netflix

    As you can understand from Yellin's words, making blind assumptions by solely relying on traditional demographic data, such as age, might prove wrong at times. Taking user behaviors into consideration, on the contrary, brings about a more stable certainty because behaviors are better determiners than general assumptions based on traditional data. 

    What is Behavioral Data used for?

    Behavioral data is used to help businesses develop marketing plans and strategies for better conversion. Behavioral data allows you to dig deeper into customer purchases, interests, and buying patterns in order to fully understand their needs and desires.

    Whether you're a B2B, B2C, or SaaS, user behavior data will help your end goals like:

    • New user acquisition
    • User retention 
    • Reducing churns

    Why? Because user behavior data tells when the user drops off, provides critical insights to retain and help them achieve desired outcomes with your product. 

    5 Steps to Using Behavioral Data for the Good of Your Business

    behavioral data

    In order to fully realize the potential benefits of behavioral analytics, we need to stop thinking about it as a replacement for traditional analytics and start looking at it as an augmentation. Behavioral data is your next step in helping you optimize the user journey.

    Truly understanding this data will take time, but here are some key areas that can help you get started:

    1- Change the mindset 

    It's important to see behavioral data as a way to supplement traditional analytics. In many ways, behavioral data should be used to help pinpoint problem areas in the user journey that traditional methods of optimization have overlooked.

    2- Create a Workflow for Behavioral Data Collection

    If you're going to make use of behavioral data, having a well-defined process around how you'll incorporate it into your existing workflow is critical. There are several different ways to do this, but it really depends on what type of product you're working with and where you are in the product lifecycle. It's also important to put processes in place before you start collecting behavioral data so that your team is ready for this type of analysis.

    3- Creating a User Persona

    User behavior analysis data is the ultimate tool to create user personas, relying on the actual interactions users perform. These personas' primary value is how clearly they show what drives different types of users to conversion.

    When modeling your customer personas, you'll need:

    Behavioral drivers: Your customers' goals, what they want to accomplish with your product, and so on

    Customer mindset: What are your customers' mindsets and expectations to fulfill when starting their initial interaction with your product or service.

    Roadblocks to conversions: Consider the obstacles customers go through during their journey.

    4- Detect the Bottlenecks in Conversion Funnel

    Understanding where users get stuck within your product's customer lifecycle, which features frustrate them, and eventually what problems or inconveniences result in drop-offs is vital for software services, particularly for early startups. Detecting problems as early as you can determine whether you'll end up with churn or retention.

    For e-commerce brands, it's just as essential because this way, they can find out what causes customers to abandon their carts. Remember, figuring out the problem is halfway through solving it.

    5- Spot on the Need for Change 

    Another big-time contribution behavior analytics provides is letting you point out what works and what doesn't. Think about it. Your target is your users and customers. Their behaviors have the power to spot the need for change, whether it's a feature, a button, CTA, headline, copy, or any element you can think of. 

    In that regard, most businesses use behavioral analytics tools to track and record user interactions with heatmaps, session recordings and then test them through A/B testing. 

    Getting Started with Behavioral Analytics - you need the right tools.

    Behavioral analytics refers to capturing qualitative and quantitative data to understand how users behave on a website, app, or other digital products. Unlike traditional demographic data (age, gender), behavioral data tells you what customers do rather than who they are. This type of information allows businesses to understand who their best customers are by looking at behaviors instead of age or income.

    From segmenting users to mapping, tracking events, sessions, essential data, and creating user persona, the collected data is the ultimate way to personalize user journeys. To that end, businesses benefit from third-party behavioral analytics tools to track and record user behavior. Let's elaborate on what behavioral analytics tools are and why adopting one can boost your product growth.

    What Are Behavioral Analytics Tools & Why You Need Them

    Behavior analytics tools refer to software tools designed to track and record user behaviors on websites, apps, or digital platforms to help user profiling and segmentation with data like search data, website analytics, and app analytics data, cursor tracking, as well as:

    • Clicks and taps
    • Scrolling
    • Mouse movements
    • User feedback
    • Navigation and User Experience

    There are different types of user behavior analytics tools such as:

    • Session Replay Tools
    • Feedback Tools and Voice of The Customer Tools (VoC)

    Who Should Use Behavioral Analytics?

    Anyone in any digital industry should be able to analyze and act upon behavioral analytics to take their business a step forward. 


    • Optimize customer acquisition by comparing the most valuable campaigns and channels
    • Boost the customer lifetime value by pinning down the behaviors and characteristics of the most loyal customers
    • Increase customer retention by understanding customer touchpoints

    Data Analysts

    • Analyze the full customer journey
    • Conduct user behavioral analysis that’s not possible to perform with SQL.

    Product Managers

    • Identify user behavior leading to reduced churn and customer retention
    • Asses user engagement in real-time

    Frequently Asked Questions

    What do you mean by behavioral analytics?

    Behavioral analytics is a type of software application that measures and analyzes the behavior of consumers. The basic purpose of a behavioral analytics application is to determine how to more effectively market to consumers by analyzing what they are doing instead of using traditional demographic data.

    What are behavioral data and behavioral analytics?

    Behavioral analytics is a subset of data analytics. It is the analysis of online and mobile customer behavior to develop predictive models that can be used to make better business decisions. These analytics are used in marketing, sales, operations, finance, and customer service to predict customer behavior and future value.

    Behavioral data is any data that describes a user's activity on a website. This includes their location, browsing history, search queries, purchases, social media interactions, and more. Behavioral data can be aggregated across large groups of users and then analyzed to see common behavior patterns.

    How do you analyze behavioral data?

    Trying to analyze behavioral data from multiple websites can be a tedious task. Fortunately, there are a number of tools out there to make the process easier and more efficient. One of the most popular is Google Analytics, which allows users to gain insight into site behavior and collect demographic data. It also provides advanced segmentation options to help focus on specific groups (such as certain demographics or geographic regions).

    What questions does behavior analytics answer?

    • What devices and platforms do customers use?
    • Where did they come from (e.g., Google search)?
    • What did they (e.g., clicked an ad) do?
    • How long did they stay?
    • How much time did they spend doing each thing?
    • Where do users get stuck?
    • Which of your ads are most effective, and do users react to your marketing efforts?
    • At what stage of the customer journey do users drop off?

    What are the objectives of behavioral analytics tools?

    The core objective of behavioral analytics tools is to capture user behaviors to make informed decisions about what to change and where to make improvements on the product and customer journey. It's used to track user preferences and target them with tailored offers and content.

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