The digital revolution has largely been a godsend for marketers: thanks to an explosion of available information and emerging innovative technology, marketers have 24/7 access to consumer interaction information across a myriad of digital channels in addition to traditional offline channels. However, just reaching your target consumers isn’t enough to earn their attention. You need to speak to them in a way that deeply reflects their personal needs, desires, and lifestyles.
New technologies are changing the way consumers interact with brands. The shift is happening quickly as consumers in Southeast Asia become digitally savvy, with internet user base expected to grow from 260 million in 2015 to 480 million by 2020. As consumers spend more time online, it is not a surprise that the demand for the right and personalised information, at the right time, on any device is increasing.
However, according to a survey conducted by Econsultancy and IBM, nearly 80 per cent of consumers said the average brand doesn’t understand them as individuals, failing to deliver customised experience. Additionally, deep consumer analysis demands that marketing leaders overcome three broad challenges: achieve a true 360-degree consumer view, be able to predict their behavior and successfully execute personalised marketing campaign across multiple channels. In the past, in order to conquer these challenges, marketers had to invest a lot of time and money. Fortunately, that’s no longer the case. Here are four steps that marketers can take to create personalised experiences for their clients and at the same time, achieve a near-term revenue boost from market analysis and segmentation:
Step 1: Establish objectives
Market segmentation is about understanding the needs of consumers and how they decide between one offer or product and another. This insight is used to form groups of consumers who share the same or very similar value criteria. Understanding consumers is valuable for your business, but you will find that you gain more insight if you have an end goal in mind from the start of your segmentation efforts. Your objectives will fall in one of two areas: consumer retention and consumer acquisition. In each of these two areas, you need to deploy different strategies and tactics and take a different approach to how you use the consumer data that’s at your disposal.
• Consumer analysis for retention – Your end goal is to generate growth and create superior consumer experiences that will encourage referrals. The tactics you should employ include message optimising, consumer value forecasting, referral revenue or product/service bundling.
• Consumer analysis for acquisition – Your end goal is to build smarter acquisition programmes through tailored messaging, targeting, lookalike modeling and adoption of various pricing strategies.
Step 2: Build an integrated database for a true 360-degree view of your consumers
A true 360-degree consumer view is only possible with an integrated dataset that includes both internal and external data. This may sound complicated, but technology makes it a lot easier than you think.
Internal data from consumer relationship management (CRM) systems, billing systems, or other repositories of consumer knowledge are valuable for segmentation. In addition to containing personally identifiable information that consumers have chosen to share and preferences about communication channels and privacy, internal data tends to be rich in attribute data that’s actionable for personalising interactions, cross-selling, and other activities that make marketing more relevant.
However, internal data in isolation has several drawbacks as it only represents interactions with your brand, it gets out of date very quickly and doesn’t include any insights on your prospect consumers. On the other hand, external data gathered by a third-party provider may not give you a full insight into consumer journey and will most probably be shared with your competitors.
The winning combination emerges when you bring all of your first- and third-party data into a single audience hub supported by an authoritative identity methodology. The identity methodology is the key to overcoming the biggest barrier to integrating internal and external data: the lack of a consistent way to tie together all of this disparate data while conforming to privacy policies and best practices. The right audience hub will give you very granular data access so that you can dig as deep as needed to develop precise segments.
Step 3: Uncover the 4 Ps of consumer understanding
In the past, the cost of custom segmentation has put it out of reach for many marketers. Today, the innovative data analytics technology has changed the equation. Once you have your integrated set of data ready, you can build a custom segmentation for the fraction of the cost you might expect. Your segmentation should uncover the ‘4 Ps of Consumer Understanding’:
• Propensity – How likely each consumer segment is to buy your products
• Potential – The lifetime value to your company from each consumer you win in your segment
• Profile – Who your consumers are, what they like and how to reach them
• Preferences – which of your products they will prefer
Taken together, these will help you to target the right consumers, deeply understand them and earn their attention by delivering tailored communications aligned to their preferences.
Step 4: Activate your segmentation
Any segmentation model that can’t easily integrate with your online and offline channels will gather a lot of virtual dust on your hard drive. Once you build your segmentation, you’ll need to incorporate it into your execution workflows for all channels your consumers use to interact with you. This includes both online channels like web and media as well as offline channels from call centers to direct mail.
The mantra for today’s empowered consumer is ‘show me that you know me.’ Consumers expect companies to recognise them immediately and to provide them with efficient support and relevant messages. Gaining the ability to identify and reach out to consumers with personalised messaging based on what’s known and learned about them is an effective way of deepening relationships by making each consumer feel valued. With the right market analysis and segmentation strategy, marketers can create personalised consumer experience, gain insights on products they need and as a result, unlock significant value from their marketing budgets to drive greater returns on investment and business results.