Understanding Target Customers

Stephen DeAngelis

July 15, 2013

Companies need to understand their target customers, asserts a blog post from TIBCO Spotfire, “and that means using predictive analytics.” [“Predictive Analytics: Predicting the Unpredictable Consumer,” 10 June 2013] The post goes on to argue that only by understanding the consumer can a company tailor its offerings to them in a way that breaks through the information overload that often distracts them. The TIBCO post draws from another post written by Jake Sorofman, a research director with Gartner for Marketing Leaders, in which he writes, “[The] hyperconnected consumer is a game-changer for marketers. Why? Because the path to purchase, which was once relatively easy to model and influence, has become a muddled and meandering maze — more of a walkabout than a path that follows any deliberate course. Think of it as the flight of the bumblebee — not the seasonal migration of songbirds.” [“Win the Attention of Your Distracted Consumer,” Harvard Business Review Blog Network, 29 May 2013]

 

Sorofman argues that marketers need to help their clients become “part of the experience” that consumers are seeking through being connected with them. He recommends five ways to achieve this goal: Developing customer intimacy; thinking mobile; integrating experiences across channels; delivering targeted experiences; and not forgetting the basics.

 

Develop customer intimacy.

 

Sorofman writes, “Every strategy begins with an understanding of your target customer.” He admits that this advice is neither profound nor new. Marketers have used a number of methods in the past to try and get to understand customers (e.g., surveys, panels, etc.) But Sorofman asserts that in the era of big data, developing customer intimacy “implies something vaguely different.” He explains:

“It’s not only about like-kind segmentation based on customer needs and wants; it’s also about developing a deep understanding of customers’ connected behaviors, preferences, and usage patterns. Brands measure these patterns and, increasingly, look to advanced ethnographic techniques to observe what isn’t often reliably reported by customers.”

In other words, marketers need to use big data analytics to help them understand their target customers better.

 

Think mobile first.

 

Mobile technology is both a source of data for companies and a window of opportunity for connecting with consumers. Sorofman refers to research conducted by Google that concludes “90% of all media interactions today are screen-based.” [“The New Multi-Screen World Study,” Google Think Insights, August 2012] More importantly, the study concluded, “Smartphones are the backbone of our daily media interactions. They have the highest number of user interactions per day and serve as the most common starting point for activities across multiple screens.” It’s little wonder then that Sorofman recommends that marketers think mobile first. This is particularly true if target customers are located in emerging market countries. Sorofman writes:

“By pegging your efforts to mobile you ensure that experiences are optimized to what is fast becoming the primary use case — and you ensure that the physical constraints of the mobile medium gets the first-order attention it requires.”

The Google research indicates that even though consumers spend less time on average on their smartphones per each interaction than they do with tablets, PCs, or television, 65 percent of online activities are started on a smartphone. Sorofman points out, however, that ignoring other channels of activity would be a mistake.

 

Integrate experiences across channels.

 

Since consumers use multiple screens for their online activities, Sorofman asserts that this “can easily create fragmented brand experiences.” That’s why he recommends integrating consumer experiences across channels. He writes:

“[It’s] important to design experiences that make mobile an asset, not a liability — a magnet, not a wedge. Case in point: Beauty supply retailer Sephora integrates mobile across the in-store shopping experience, including the use of mobile payments, the ability to scan items to create shopping lists and access reviews in the store, and innovative tactics like ‘endless aisle,’ which allows consumers to scan promoted QR codes for on-demand shipping of highly giftable items. One scan and Aunt Sally’s present is off of your mental checklist.”

Even if you integrate experiences across channels, you need to ensure that the experience you offer is the one for which the consumer is looking. That’s another area where big data analytics plays an important role.

 

Deliver targeted experiences.

 

Sorofman writes, “Big data means that we know more about consumers than they care to contemplate. Creepiness aside, it also means we can deliver offers and experiences that are both relevant and welcomed.” Sorofman’s caution is well-advised. When targeting messages, you don’t want to “creep out” your potential customer. That’s why I’m a bit surprised his first recommendation used the word “intimacy.” Familiarity might have been a better choice. Customers don’t mind companies getting familiar with them, but they may feel uneasy when familiarity moves towards intimacy. Sorofman continues:

“With mobile, targeting data encompasses elements of location and proximity. Of course, you can easily see how this story could end badly — after all, proximity doesn’t always mean permission. But, particularly for the most loyal customers, mobile can be a powerful way to engage with and influence consumers in close company to potential purchase moments.”

Context is important. By context, I mean: How much time does the consumer have? What do they want to accomplish? Where are they located? And, finally, what is their state of mind or attitude? The Google research notes that context “drives device choice” and, therefore, should also play a role in the experience provided. For example, knowing that a consumer is in a store makes it much more likely that an offer pushed to a smartphone will result in a spontaneous purchase than that same offer pushed to a consumer surfing the Web at home. Sorofman’s last bit of advice involves using common sense when designing multi-channel strategies.

 

Don’t forget the basics.

 

“It’s easy to get starry-eyed contemplating the universe of mobile possibilities,” Sorofman writes, “but sometimes the best tactics are close to the ground.” He explains:

“For example, Gartner believes that mobile search yields higher conversion rates than traditional search. Why? Because mobile search is inherently local and exhibits high commercial intent. You search on your smartphone, not to chase shiny objects or to kill time, but to fulfill a near and present need. The upshot? Sometimes the mobile magic is the simple combination of a mobile search strategy tied to a mobile-optimized website.”

Giovanni DeMeo, Vice President of global marketing and analytics at Interactions, is a true believer when it comes to using predicative analytics for targeted marketing. He asserts, “Predictive analytics gives retail marketers the power to see into the future and know with almost complete certainty exactly what products shoppers will purchase, where they will make those purchases, and how their preferences will change in the short- and long-term. … With predictive analytics, it’s possible to send customized communications for seemingly unrelated items based on behavioral patterns that indicate what future purchases will likely be, even if on the surface those items appear to be completely unrelated.” [“Predictive Analytics: The New Retail Currency,” Direct Marketing News, 4 April 2013] He continues:

“The bottom line is that predictive analytics enable retailers to truly ‘know their customer’ — down to individual wants, needs, and preferences. Gone are the days of being able to stay competitive using the backward-looking, intuition-based decision-making that has been the mainstay for decades. Future sales depend on knowing what your shoppers want — without even asking them. To succeed in today’s marketplace, retailers and CPGs need to fully embrace — and trust — the new data-driven analytics that are the undeniable future of retail.”

Molly Schlinger, a strategic planner at TRCo Marketing, reminds us why getting to know customers better is so important. “There are over seven billion people in the world today,” she writes, “and more than 315 million of those are in America alone. Chances are they aren’t all interested in the exact same thing.” [“You Know Me Better Than I Know Myself,” Direct Marketing News, 10 April 2013] She continues:

“Enter demographics, target audiences, really expensive database memberships — and tailored experiential promotions. The time for standard product-based rewards is nearing an end as more humanized, emotionally connected incentives and consumer engagement rises to the fore. Through careful market research and an understanding of specific demographics, brands now have the ability to truly get to know their consumers; what they like, what they do, what they want — and act accordingly. It opens the door for brands to connect on the emotional level humans crave so much. Now it’s just a matter of who actually walks in that open door.”

The one thing that all of the pundits cited above agree on is that big data analytics are going to play an increasingly important role in marketing as messages and experiences are tailored to preferences, styles, and tastes of individual consumers.