Guest post from Marygrace Bateman, Market Manager, IBM Business Analytics
Follow Marygrace on Twitter: @bateman_mg
It’s a bit ironic that my job is to espouse the importance of personalizing the customer experience and the imperative of moving away from the spray and pray marketing approach to targeting individuals. Sadly, “personalization” and “individuals” was not common terminology in my household growing up.
“Spray and pray” however, would be an accurate description of a typical dinner in my house as a child. As one of fifteen children, my mom would literally spray whatever items in the pantry onto our obscenely long kitchen table and pray that we would eat one of the three rotating meals these items seemed to spawn: hot dogs (unusually greenish in color and not because of relish), “breakfast for dinner” (better known as, Wonder Bread french toast), or my favorite, “pizza muffins” (tomato paste, cheese, English muffins, and very high in nutritional value).
With fourteen brothers and sisters, personalization was a bit difficult, with neighbors perpetually asking, “Which one are you?” (I’m #13 for those keeping score at home.)
Targeted offers? Unheard of.
Everything was a one-size-fits-all standard across the board; I didn’t even own a pair of socks until college, as we had a common “socks box” in the laundry room from which to choose our mismatched pairs. I didn’t realize this was anomalous behavior until I attended college, and my roommate was a bit disturbed when I reached into her drawer for a pair of socks (“What? Socks are not for sharing? But these even have a match!”).
The times have changed. Families typically aren’t the size of football teams anymore. And moms usually don’t forget at least one child on the way to school every day. Everyone wants to be treated as individuals. The era of the empowered consumer is upon us.
Despite my cheaper-by-the-bakers-dozen upbringing, I myself have even become an empowered consumer. I get annoyed when the display ad on the book-buying site offers me an accounting book (I can’t even balance a checkbook, why would I want an accounting book?).
I get excited when I get a coupon for Pampers diapers in the mail (whoever pays full price for diapers are suckers!). I get frustrated when my inbox get clogged with junk from the same retailers who email every single day (if I’ve never opened your emails, why do you keep sending them?).
I don’t want to be #13, nor any number for that reason, in my interactions with the businesses with whom I choose to do business. I spend enough money purchasing and enough time searching, I just want what I want when I want it.
Hmmm… I’m starting to sound like an only child. And that’s a good thing.
In this competitive marketplace, businesses need to learn to not only deal with consumers like me, but to engage us in an on-going relationship so we remain loyal. After all, we are quite price-conscious (4 in 10 smartphone users search for an item on phone while in a store1) and also a distrusting bunch (75 percent don't believe companies tell the truth in advertisements2).
However if engaged in a personalized, cross-channel way, we can be very profitable, spending 4-5x more than average if we are a multi-channel buyer (and 86 percent of us are3).
How could one of those businesses I mentioned have made my experience better?
The wrong offer on the website? That site was just using historical transactional history when making the accounting book offer, as I had purchased an accounting text from the site a few years earlier for a grad school course. If the site had employed customer analytics, it would have incorporated other data types, like my browsing history, demographics and interactions with customer service reps and analyzed them for insights into my behavior and preferences seeing that this one time purchase of an accounting text was an anomaly and not a relevant offer at this time.
The diapers coupon? Smart! Not only did the retailer know I was a mother with a child in diapers, but they knew that I responded best via direct mail pieces (particularly direct mail pieces that arrive right before the weekend). By utilizing customer analytics, businesses can predict how likely I am to respond to a specific offer, by which channel and even at what time. Leveraging massive amounts of data into actionable insight, they can be smarter about their marketing efforts by executing more efficient, targeted campaigns. To make the offer even more enticing, however, they could perhaps offer an up-sell or cross-sell item as well (wipes?).
In this age of the empowered consumer, we not only appreciate being treated as an individual, we expect it. I think it's safe to say the days of mass-made green hot dogs and one-size-fits-all sox boxes are gone.
For more information:
**Join me and MWD analyst Helena Schwenk for a webinar, “5 Steps to Nurture Customer Loyalty & Increase Profitability Now” (Wed., May 8 at 1:00 p.m. EDT)
**Read the whitepaper: Customer analytics solutions unlock insights that win customer and grow your business
**Watch the video: Acquire, Grow, and Retain Customers with Customer Analytics
1ComScore June 2011
2Yankelovich, via Search Engine People, July 2010
3http://multichannel-retailing.com/2011/04/the-multichannel-challenge-for-retailers-2/ April 2011