Sellers have always understood that knowing their customers is important. During the days of the traveling salesman, the best salesmen personally knew their customers. They became friends with their customers. They learned about their families and their interests. Knowing your customers is as important today as it was then. In the digital age, however, getting to know your customers involves analyzing the data trail they leave on the digital path to purchase. Marketer Chiara Lavalle (@chiara_lavalle) explains, “In an ever-changing and increasingly digital world, a one-size-fits-all approach no longer works. The growth of your business depends on your ability to effectively target the right audiences for your products and services. This involves creating detailed profiles, also known as Buyer Personas.”[1]
A buyer persona simultaneously represents a fictional representation of a typical customer and the real customer you hope to reach. According to Wikipedia: “Buyer Persona is a term used in marketing to identify and understand the typical customer in their personal as well as socio-demographic characteristics. In fact it is a fictitious character outlined in its behavioral peculiarities which reveals buying insights, highlighting what they think and what they do when they are looking for a solution to their problem or need.” Sam Kusinitz (@sdkusin), an analyst at Toast, Inc., defines the term this way: “A buyer persona is a semi-fictional representation of your ideal customer based on market research and real data about your existing customers.”[2] Shachi Kaul writes, “You should think of a buyer persona as a simulated version of the person you’re selling your product or service to. You essentially need to think of the thousands or millions of potential clients you’re speaking to as one person. This will help you to have a consistent, streamlined marketing approach that gets seen and experienced by your target audience.”[3]
Why buyer personas are important
John Wanamaker, the late department store magnate, once stated, “Half the money I spend on advertising is wasted. The trouble is I don’t know which half.” Buyer personas and targeted marketing are focused on helping marketers ensure the right message, about the right product, reaches the right customer. Kaul explains, “A buyer persona is useful because it allows you to determine where your [company] needs to focus its time in regards to product development and user experience. You can also use the persona you create to make a plan for aligning your [company’s] core values and practices across your organization. You can then use your very targeted and organized plan to attract valuable leads and customers instead of throwing marketing dollars at useless leads.” Mark Albertson (@techagony) writes, “In today’s connected world, the best ad is the one that reaches the best customer on their laptop, tablet, or smartphone.”[4]
Does targeted marketing really work? According to Boston Consulting Group (BCG) analysts, it does. They write, “Brands that create personalized experiences by integrating advanced digital technologies and proprietary data for customers are seeing revenue increase by 6% to 10%, according to our research — two to three times faster than those that don’t. As a result, personalization leaders stand to capture a disproportionate share of category profits in the new age of individualized brands while slow movers will lose customers, share, and profits.”[5] The surprising truth, according to Brian Solis, is that marketers have yet to master the targeted marketing approach. He writes, “According to a series of recent studies, only 14% of companies rank themselves as ‘strong’ in achieving a single view of the customer, and less than 10% of top tier retail brands say they’re highly effective at personalization.”[6]
What data helps create a good buyer persona?
Albertson notes, “Current technology is heavily based on knowing as much as you can about a customer before sending them an ad.” As I noted at the beginning of this article, in the digital age, getting to know your customer involves analyzing the data trail he or she leaves on the digital path to purchase. What kind of data is best-suited for developing a good buyer persona? Kusinitz writes, “When creating your buyer persona(s), consider including customer demographics, behavior patterns, motivations, and goals. The more detailed you are, the better.” Kaul suggests a similar list of data: customer demographics, behavior patterns, motivations, problems, goals, and ideals. It should be clear that not all of those data points can be obtained from web searches or point of sale data. Some of it must be teased out of social media posts and other sources of customer feedback. In order to analyze different types of data (i.e., structured and unstructured data), a good cognitive computing system is required.
The other thing to keep in mind is that all customers are not equal. Sheila Kloefkorn (@skloefkorn), President & CEO of KEO Marketing Inc., explains, “Typically, the Pareto Principle applies to many businesses: they make 80% of their revenue from 20% of their customers. You can begin the process by defining who would make a dream customer for your company. What are the attributes that make them a dream customer?”[7] In order to answer that question, you need to identify databases containing information discussed above. If your customer happens to be a business rather than a person, Kloefkorn offers a few suggestions. She writes, “Consider relevant variables such as customer geographical location, company revenue level, the number of employees, margin potential, products that fit well with their requirements, purchasing behavior, and other factors that make sense to include. With this information, you can evaluate customer opportunities against your dream characteristics.”
Concluding thoughts
Some companies might balk at the notion of targeted marketing. Anshu Agarwal (@anshuagarwal101) Chief Marketing Officer and VP Product at Cedexis, explains, “For product evangelists, founders and true believers in general, the idea of squishing the target market down from everyone to not everyone seems like a defeatist move.”[8] As the BCG analysts explained above, it’s not a defeatist move. The BCG analysts conclude, “Brand individualization offers companies the chance to engage consumers one-on-one and to build enduring — and self-reinforcing— relationships.” Agarwal adds, “In today’s increasingly targeted ad environment, it is blindingly easy to lose your shirt by promoting too widely or to dry up the lead pipeline by being overly picky. With a persona-based strategy, you know you’re in that Goldilocks zone (when everything is just right) because you look for the right title in the right industry. And if you’ve done your homework and produced the right assets, you’ll always be in the right place — hopefully at the right time.”
Footnotes
[1] Chiara Lavalle, “What is a Buyer Persona?” doxee, 24 May 2019.
[2] Sam Kusinitz, “The Definition of a Buyer Persona [in Under 100 Words],” Hubspot, 18 July 2018.
[3] Shachi Kaul, “Do You Know That Ignoring Buyer Persona Means a Failed Marketing Strategy?” Business 2 Community, 28 February 2017.
[4] Mark Albertson, “Digital targeting becomes a fine art for marketers,” Blasting News, 14 March 2017.
[5] Mark Abraham, Steve Mitchelmore, Sean Collins, Jeff Maness, Mark Kistulinec, Shervin Khodabandeh, Daniel Hoenig, and Jody Visser, “Profiting from Personalization,” Boston Consulting Group, 8 May 2017.
[6] Brian Solis, “Extreme personalization is the new personalization,” Retail Dive, 13 September 2017.
[7] Sheila Kloefkorn, “How to figure out who your target audience is,” Phoenix Business Journal, 21 September 2017.
[8] Anshu Agarwal, “Why You Should Target Personas Instead Of Just Verticals,” Forbes, 26 February 2018.
