Are you focusing on the customer or their transactions?
Kathy Hecht is an experienced multi-channel direct marketing executive with over 25 years of experience. She has held the position of Chief Marketing Officer of Silver Star Brands and American Greetings Cards and is the founder of Blue String Marketing.
We’re in a time of tremendous health, political, and social unrest. It’s easy to get swept away in hyperbole, but when entire economies get shut down and people around the world have to suddenly and drastically alter their everyday habits, it’s genuinely appropriate to say that consumer behavior is changing.
It’s the job of marketers to reflect on such change and to evaluate how best to move forward. Yet, it’s clear that many are reflecting by using a transactional perspective, which may not necessarily be fit for purpose in a world where consumers are putting the social and political affiliations of brands under increased scrutiny. People are seeking out organizations that reflect their values, and customer segmentation strategies need to evolve appropriately. Now is the time to focus on the consumer, rather than their transactions.
The State of Play
We had demographic data and then got really smart and added psychographic data. Now there’s so much data around (clicks, visited sites, abandoned carts and so on), it can be overwhelming. That data however is commonly impersonal, which doesn’t necessarily reveal someone’s belief systems or values. That’s a problem, as values-centric consumers are increasingly looking to spend their money with brands that authentically reflect their beliefs
It’s just as well then that regulation, which is sweeping away ineffective data scraping and inference tactics, is forcing a reassessment of data collection practices in general. High profile examples of companies using data where they shouldn’t be are plentiful and have brought the issues to the forefront of societal consciousness. In Illinois, Facebook is currently settling a lawsuit after it collected biometric face data via its ‘Tag Suggestions’ tool without any notice or consent. Anyone impacted can fill out a claim form and get between $200-400. These are the kinds of things we’re increasingly hearing about and there’s a data privacy backlash as a result.
If people know what their data is being used for, and we’re not talking about 30 page long privacy policies here, they’re more willing to share information than often assumed. This relies upon absolute transparency and a foundation of trust. It also requires consumers to proactively volunteer their data, and the only way that’s ever going to happen is if marketers learn to ask the right questions.
Marketers are going to have to become much better at asking questions. It can’t be “here are 50 things we want to know about you”, which is all about ‘me, me, me the marketer’. It’s got to be about what the consumer wants to share and for their benefit.
Relevancy is absolutely key. Yes, brands need to be asking for information that enables them to better serve the consumer and cannot afford to be too ‘trivial’ or contrived; but sometimes the most important information may be less obviously important.
Political allegiance is a topical example. Politics is very polarized in the US right now and it’s something people feel very passionately about. Whether someone is a Trump or Biden supporter may seemingly be irrelevant to most brands, but in some cases, it will actually be useful and something that people want to proactively share. Why is this important? People aren’t just expressing their political opinions on the ballot anymore. When it comes to casting a vote for who they will and will not support, they’re choosing to vote with their dollars too. It’s a deeper level of consumer understanding, but one that has traditionally been very difficult (and dangerous) to try and infer without having the consumer volunteer such information.
The point is that sometimes there are things consumers just want to express and share, and all organizations have to do is facilitate and gain valuable insight in the process. The right questions are not necessarily the ones marketers want to ask, but those that consumers want to answer. Determining these questions is trial and error, and the only way it works is if consumer data is treated as a privilege, rather than a simple value asset.
This is going to be a skill many have to learn. Lots of marketers have been revenue focused and, whether they like to admit it or not, see consumers as a means to an end. There needs to be an inversion that puts consumers first and revenue second.
Very few organizations do this well at the moment. One only needs to look at cookie banners, which are little more than a legal way for brands to cover themselves from a regulatory standpoint. They rarely promote any level of engagement or any real value beyond that.
However, there are new and creative methods of data collection which are generating great results. Gamification is a really interesting approach because it’s completely aligned to the shift marketers need to make. Brands can collect information from consumers in a way that’s engaging and fun in-and-of itself. Data exchange can be incentivized, adding motivation and appropriate value exchange, and the experience of giving data can also be made inherently enjoyable.
The opportunities, of course, vary greatly depending on business and industry. A mattress retailer, for example, is not going to have the vast engagement opportunities that frequently visited grocery stores are. But in the industries with frequent touch points, the opportunities are huge, especially right now. As so few have truly nailed the approach, there is real competitive advantage to be had.
Of course, working on getting the data is only part of the battle. It means little without application.
On a recent 3radical webinar, a company that helps organizations ‘earn data’, an ingenious gamification example was given. A gas station company capitalized on a game people already play at the pump as they try to hit exact numbers (clicking over to $20 worth of fuel exactly, rather than spending £19.99 or £20.01, for example). Through its app, customers are now rewarded for achieving just that feat.
It has proved to be a valuable incentive for drivers to choose their gas stations where possible. But what wasn’t discussed on the webinar was the potential data that users could be volunteering in the process. Data on anything from refill frequency to gas station location; from in-station purchases to choices of potential rewards. It’s all within reach and could help build a picture of the customer by which to better tailor the experience. For example, segmenting customers by loyalty to a certain station and those that travel all over, already tells the organization something valuable about what might be more helpful and applicable to each user.
There are all levels of sophistication that can really add value to businesses when done with the explicit consent of customers and when an appropriate value exchange has been established. It shows the incredible potential we’re talking about here.
All of this is a lot of work of course; but the reward of better getting to know your customers will pay off significantly. Once marketers embrace places where they can test what they’re doing, then prove it on a small scale, they’ll be able to build a bigger business case. This is also another bonus of gamification in that it allows you to take a small sample size, experiment, tweak, and try again.
Marketers must tackle changing consumer data needs and be creative. They need to find ways to engage in meaningful ways and by which to tease out the information they not only need, but which consumers genuinely want to share with them.