Do you really know who’s buying your products and why?
I would imagine a lot of marketers will say yes at first but might be more circumspect once challenged.
Segmentation has long been the go-to solution for marketers to deal with this problem, targeting specific groups of people with specific offers as they have shown a propensity to purchase in the past. This approach is well understood and well used but is ultimately a compromise for personalisation or mass-customisation driven by insight from customer data analysis.
To explain the importance of getting this right, you need to understand how most marketers work and the constraints they may encounter. Any marketer who finds it difficult to demonstrate how they achieved success or attribute revenue to specific activities will limit their ability to demand budget or resources. Marketing budgets are still often set as a percentage of turnover and do not correlate to the desired business objectives. This is not right.
Marketing deserves a seat at the table and the best way to ensure this is to have ready access to core performance metrics. A marketing operations team is now a vital part of any effective marketing operating model. Analogous to the marking of most exams, the answer is important, but you also have to show your working out! Successful marketers have to be able to identify what caused success and replicate it.
Turning intention into action
So, now that you’ve decided you need and want more insight about your customers, where do you start? Data is the fuel of modern marketing, so you’ll need to capture everything relating to your customer’s profile and engagement with your brand. Every web visit, email interaction or order will have some customer info attached to it that can be aggregated to build a single view of that customer from the perspective of marketing.
There are several tools in the marketing technology landscape that can fulfil this role, but the most appropriate and effective is the Customer Data Platform (CDP). The CDP can aggregate data from several disparate sources and organise it around a self-generated unique customer identifier which means that changes in some of the Personally Identifiable Information (PII) and email addresses can still be rolled up to the same individual.
The power of this becomes apparent very quickly as customer identity and behaviour appear with laser focus. Once identification has happened, you can start to analyse and see if the resultant insight allows you to predict future behaviour, and most importantly, purchases.
Turning segmentation into prediction
A customer’s purchase recency, frequency and monetary value have remained persistent as metrics to define worth to a company and as a basis for segmentation. The intersection of these three scales will often be the top tier of your loyalty programme if you have one.
Pigeon-holing your customers into pre-defined buckets or segments will allow you to gain some economies of scale in the creation of campaigns and creative, etc. But it may not lead to increased engagement from the customer or increased lifetime value. Savvy marketers understand that the path to advocacy comes from relevance and context, which is often only possible when delivering 1-2-1 marketing and attempting to predict the next best action for the customer.
This journey from intention to prediction is not trivial, and the marketer is making a conscious decision to not stand for any compromises. It is bold and hard but ultimately worth it. We all aspire to be the very best version of ourselves, so don’t settle for anything less.
As Maslow penned in his 1943 paper on the study of human motivation and the hierarchy of needs, “what a man can be, he must be”. This translates beautifully to the role of the marketer and their relationship with their customers. There is a fragile unwritten charter between marketers and their audience which can easily break if we do not use everything we know about a customer to ensure we send the most relevant and contextual message.
Therefore, our ethical responsibility as marketers is to grow the conversation with each and every customer else we have failed. Are you up to the challenge?