Use People-Oriented Marketing: Because Products Change, But People Rarely Do
In 1:1 marketing, product-level targeting is “almost” taken for granted. I say almost, because most so-called personalized messages are product-based, rarely people-oriented marketing. Even from mighty Amazon, we see rudimentary product recommendations as soon as we buy something. As in: “Oh, you just bought a yoga mat! We will send you absolutely everything that is related to yoga on a weekly basis until you opt out of email promotions completely. Because we won’t quit first.”
How nice of them. Taking care of my needs so thoroughly.
Annoying as they may be, both marketers and consumers tolerate such practices. For marketers, the money talks. Even rudimentary product recommendations — all in the name of personalization — work much better than no targeting at all. Ain’t the bar really low here, in the age of abundant data and technologies? Yes, such a product recommendation is a hit-or-miss, but who cares? Those “hits” will still generate revenue.
For consumers, aren’t we all well-trained to ignore annoying commercials when we want to? And who knows? I may end up buying a decent set of yoga mat cleaners with a touch of lavender scent because of such emails. Though we all know purchase of that item will start a whole new series of product offerings.
Now, marketers may want to call this type of collaborative filtering an active form of personalization, but it isn’t. It is still a very reactive form of marketing, at the tail end of another purchase. It may not be as passive as waiting for someone to type in keywords, but product recommendations are mixture of reactive and active (because you may send out a series of emails) forms of marketing.
And I’m not devaluing such endeavors, either. After all, it works, and it generates revenue. All I am saying is that marketers should recognize that a reactive product recommendation is only a part of personalization efforts.
As I have been writing for five years now, 1:1 marketing is about effectively deciding:
- whom to contact, and
- what to offer.
Part One is good old targeting for outbound efforts, and there are a wide variety of techniques for it, starting with rules that marketers made up, basic segmentation, and all of the way to sophisticated modeling.
The second part is a little tricky; not because we don’t know how to list relevant products based on past purchases, but because it is not easy to support multiple versions of creatives when there is no immediate shopping basket to copy (like cases for recent purchases or abandoned carts).
In between unlimited product choices and relevant offers, we must walk the fine lines among:
- dynamic display technology,
- content and creative library,
- data (hopefully clean and refined), and
- analytics in forms of segments, models or personas (refer to “Key Elements of Complete Personalization").
If specific product categories are not available (i.e., a real indicator that a buyer is interested in certain items), we must get the category correct at the minimum, using modeling techniques. I call it personas, and some may call it architypes. (But they are NOT segments. Refer to “Segments vs. Personas”).
Using the personas, it is not too difficult to map proper products to potential buyers. In fact, marketers are free to use their imaginations when they do such mapping. Plus, while inferred, these model scores are never missing, unlike those hard-to-get “real” data. No need to worry about targeting only a small part of potential buyers.
What should a marketer offer to fashionistas? To trendsetters? To bargain seekers? To active, on-the-go types? To seasonal buyers? To big spenders? Even for a niche brand, we can create 10 to 20 personas that represent key product categories and behavioral types, and the deployment of personalized messages become much simpler.
And it gets better. Imagine a situation where you have to launch a new product or a product line. It gets tricky for the fashion industry, and even trickier for tech companies that are bold enough to launch something that didn’t exist before, such as a new line of really expensive smartphones. Who among the fans of cutting-edge technologies would actually shell out over a grand for a “phone”? This kind of question applies not just to manufacturers, but every merchant who sells peripherals for such phones.
Let’s imagine that a marketer would go with an old marketing plan for “similar” products that were introduced in the past. They could be similar in terms of “newness” and some basic features, but what if they differ in terms of specific functionality, look-and-feel, price point and even the way users would use them? Trying to copy some old targeting methods may lead to big misses, as even consumers hear about them from time to time.
Such mishaps happen because marketers see consumers as simple extensions of products. Pulling out old tricks may work in some cases, but even if just a small bit of product attributes are different, it won’t work.
Luckily for geeks like us, an individual’s behavior does not change so fast. Sure, we all age a bit every year; but in comparison to products in the market, humans do not transform so suddenly. Simply, early adapters will remain early adapters, and bargain seekers will continue to be bargain seekers. Spending level on certain product categories won’t change drastically, either.
Our interests and hobbies do change; but again, not so fast. It took me about two to three years to turn from an avid golfer to a non-golfer. And all golf retailers caught up with my inactivity and stopped sending golf offers.
So, if marketers set up personas that “they” need to push their products, and update them periodically (say once a year), they can gain tremendous momentum in reaching out to customers and prospects more proactively. If they just rely on specific product purchases to trigger a series of product recommendations, outreach programs will remain at the level of general promotions.
Further, even inbound visits can be personalized better (granted that you identified the visitor) using the personas and set of rules in terms of what product goes well with what persona.
The reason why models work well — man-made or machine-built — is because human behavior is predictable with reasonable consistency. We are all extensions of our past behaviors to a greater degree than the evolution rate of products and technologies.
Years ago, we’ve had a heated internal discussion about whether we should create a new series of product categories from VHS to DVD. I argued that such new formats would not change human behavior that much. In fact, genres matter more than video format for the prediction of future purchases. "Godfather" fans will buy the movie again on DVD, and then again in Blu-ray. Now some type of ultra-high-definition download from some cloud somewhere. Through all of this, movie collectors remain movie collectors for their favorite types of movies. In other words, products changed, but not human attributes.
That was what I argued then, and I still stand by it. So, all the analytical efforts must be geared toward humans, not products. In coming days, that may be the shortest path to fake human friendliness using AI and machine-made models.
Stephen H. Yu is a world-class database marketer. He has a proven track record in comprehensive strategic planning and tactical execution, effectively bridging the gap between the marketing and technology world with a balanced view obtained from more than 30 years of experience in best practices of database marketing. Currently, Yu is president and chief consultant at Willow Data Strategy. Previously, he was the head of analytics and insights at eClerx, and VP, Data Strategy & Analytics at Infogroup. Prior to that, Yu was the founding CTO of I-Behavior Inc., which pioneered the use of SKU-level behavioral data. “As a long-time data player with plenty of battle experiences, I would like to share my thoughts and knowledge that I obtained from being a bridge person between the marketing world and the technology world. In the end, data and analytics are just tools for decision-makers; let’s think about what we should be (or shouldn’t be) doing with them first. And the tools must be wielded properly to meet the goals, so let me share some useful tricks in database design, data refinement process and analytics.” Reach him at firstname.lastname@example.org.