Better Together: Use Attitudes, Demographics and Behavior to Improve Results
The more you know about your customers, the better you can target them with relevant offers in a meaningful way. Different types of data—attitudinal, behavioral and demographic—enable different targeting abilities based on preference, purchasing and lifestyle. You can use each of these data types alone to create a marketing advantage, but they are most valuable when used in combination. Here's how:
1. First, survey your customers to learn their attitudes about your brand and your products or services. Ask questions such as:
- What marketing channels do you use to purchase?
- What types of promotions are more enticing?
- What do you think about our brand, products, customer service?
- How do you research products before buying?
Use the answers to create selection data points in your marketing database. If surveying your customers is not an option, enhance your customer database with third-party attitudinal data. The data may be broader, but it's still valuable to determine how to approach customers with a differentiated offer.
2. Next, create attitudinal segments (clusters) of your customers using the attitudinal data from the survey responses. (Keep the responders' names and physical addresses—you'll need that later!)
Once you better understand the attitudes and opinions of customer segments, you can customize products as well as target customers with better messaging and more relevant offers. Customers are far more likely to respond to an offer that resonates with their individual preferences than to a generic offer.
Attitudinal data tells you how to talk to a customer segment, not who is most likely to buy. For that, you need demographic and behavioral data.
3. By appending third-party demographic data to your customer and prospect universes, you can project the attitudinal segments by building a segmentation projection model (discriminant analysis). You also may further define subsegments by using other demographic data such as proximity to your stores, presence of children or generation (e.g., gen Xers or baby boomers).
4. Once you assign the segments on your customer database, you can build models within each segment using behavioral data such as previous purchases or campaign responses to improve targeting. These behavioral models tell you which customers within each segment are most likely to respond and/or purchase. This final, critical step allows you to limit your marketing spend to just those customers and prospects within a segment who are likely to purchase.
Attitudinal data drives the segmentation, telling you how to communicate with your customers. Behavioral data and demographics improve the targeting to just those customers who are most responsive and likely to buy.
Used in combination, attitudinal, demographic and behavioral information also provides enhanced strategic insights and help you improve product positioning and market intelligence. Varied information used together leads to better targeting to grow customers and increase your bottom line.
The Data Combo in Action
Let's look at a hypothetical example:
Company: Furniture Store
Segment: Home Fashionistas; values high-end products
Attitudes: Prefers to research online, buy in-store due to online shopping security concerns and touch/feel product before buying; also likes new styles and premium fabrics
Behavior: High-value purchases, high frequency, all purchases made in-store
Demographics: Suburban, within 20 miles of a retail location, high household income, female, ages 45-55
You may find an attitudinal segment within your survey that describes a customer always on the lookout for the latest designs and fabrics. Projecting this segment onto your customer base reveals other like-minded customers. Look at past e-mail campaigns to this segment to discover the behavioral, geographic and demographic attributes that drive purchases at a local store through e-mail response. Next, develop an e-mail campaign that mentions new products added to the collection or fabrics that she needs to see in person to drive her into the store. You can see that isolating one data type over another leaves some part of the segment profile unanswered. Your ROI will be negatively affected if you talk to customers with these attitudes who don't live near a store, or who aren't likely to purchase.
Richard Bolton, Ph.D. is associate director and Sarah Pease Darilmaz is senior strategic analyst of the strategic consulting and analytics group at KnowledgeBase Marketing, a data-driven marketing solutions firm based in Richardson, Texas. They can be reached at (972) 664-3600.