Lists: More Customers, Please!
The simplest way to "clone" customers using data, profiling is the first step to reveal targetable insights instead of relying on intuition.
To profile your customers, a data provider appends demographic, behavioral and other consumer data to your customer records, which are then compared to the provider's consumer database. The results show how your customers differ from the overall population in each specific demographic or other attribute.
The profile chart, for example, shows the company has a higher customer penetration among consumers with household incomes between $75,000 and $399,000. Marketing to households with those incomes will produce a higher response rate and yield more new customers than marketing to other households.
Income is only one attribute. A typical customer profile includes data for hundreds of attributes, including demographics such as age, gender, home ownership, family size; interests and hobbies; buying behaviors; and other attributes. Each attribute in the profile is separately indexed against the overall population.
Because each characteristic is covered separately, choosing lists or media based on a profile leaves room for judgment. Marketers must evaluate which characteristics are most important in distinguishing their customers from the general population—and two experienced marketers can reach different conclusions.
The next step up on the data targeting ladder is look-alike, or clone, modeling. The process starts much the same way as profiling. But modeling uses statistical tools and techniques to analyze the results across all the attributes in the profile—both individually and in association with each other.
Non-predictive attributes are eliminated, and the remaining, predictive attributes are mathematically weighted. The final product divides prospects into deciles—with the first decile most like your customers, and the 10th decile least like your customers.
A look-alike model essentially uses data and analytics to make selections for you. You simply specify how many deciles to include in your marketing program.