Thursday, July 30, 2015

Your Customers Are Like Snowflakes

I'm aware that mention of snowflakes in July could be somewhat out of season (unless you believe the recent claims that there might be a mini ice age in 15 years), but I'm going to go ahead and do it anyway.


Customers are like snowflakes. At first glance they are all very similar, but dig deeper and you start to notice differences. For example, it’s possible to categorise snowflakes at a high level, based on their size or shape. This relates to how marketing departments are able to categorise their customers based on demographics such as gender, age and location. This is important, as it allows organisations to shift from traditional scattershot marketing campaigns to higher value, tailored marketing campaigns. The benefit here is twofold: reducing the cost of marketing campaigns by not wasting money advertising to people who will not engage with your business, and improving return on marketing investment.


Any organisations that are already planning marketing campaigns based on customer demographic information are in a good place; however they are not necessarily pioneering. The snowflake analogy can actually be taken further.


No two snowflakes are alike


You may have heard the old adage that 'no two snowflakes are alike', which has actually been backed by research. The creation of snowflakes is a complex process, with many variables at play. We can, and should, view our customers in the same way. Performing categorisations on basic demographics such as age and gender provide powerful business benefits, but it’s not the pinnacle. There're a multitude of potential data points to collect about your customers, with each data point being like a piece of a jigsaw puzzle; collect enough pieces and you start to build up a powerful picture of that customer at an individual, personal level. This is often referred to as 'segment of one' marketing.


Building a system of engagement


Segment of one marketing is incredibly powerful and diverse. It requires organisations to stop thinking of their customers as a number on a spreadsheet, and start thinking about them as they truly are: complex, unique, constantly changing individuals.


Analysis of historical sales data provides a starting point for building tailored marketing campaigns by enabling the distribution of customised content and offers through the right channel, at the right time and to the right person to maximise chances of conversion. Further insights can be gained via A/B testing to experiment with and optimise variables such as content, channel and timing.


These insights can even be augmented with social media data, using analytics to gain a live voice of the customer and act on new opportunities in a timely manner by keeping your finger on the pulse of the newest trends and developments across the globe.


The ability to treat customers as individuals has become a key differentiator in maximising revenue generation. All of the data is out there; the challenge is piecing it all together to create a coherent, intelligent system of engagement that adds value for both the customer and the organisation. Organisations that have implemented these solutions are reaping the rewards and emerging as leaders in their respective industries.  



from Social Business Insights Blog

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