Customer data: A Game-changer for Deeper Marketing Insights
“Big Data is the biggest game-changing opportunity for marketing and sales since the Internet went mainstream almost 20 years ago. The data big bang has unleashed torrents of terabytes about everything from customer behavior to weather patterns to demographic consumer shifts in emerging markets”, according to a Mckinsey report.
I love the way Amazon suggests products based on my purchase data. For example, when I recently bought a laptop, it immediately gave me recommendations to buy a laptop sleeve case and keyboard cover. I probably would not have thought about it unless Amazon recommended it. This is how Amazon uses customer data and converts it into deeper insights to build a pleasant experience for the customers.
Customer data allows you, as a marketer, to identify underlying patterns in your consumer behavior, and come up with ‘aha’ moments of inspired marketing, which is not only a result of your intuition and knowledge but is also backed up by deep insights derived from the customer data.
What is Customer Data?
Customer data is unorganized qualitative and quantitative information generated by the digital and offline footprint of your customers such as their audio data of interactions with your business, their social media conversations, their online interactions such as google searches, and their actions on visiting a website, the time they spend on different aspects of a video or a website, and so on.
Customer data is allowing companies to innovate in the market place by the creation of new marketing strategies, such as Airbnb’s.
When Airbnb noticed that they had high bounce rates in the Asian countries, they started to dig deeper into the data to discover that the users clicked on the “Neighborhood” link and browsed few photos, but then the users would never come back to their website.
As a solution, they redesigned the website by replacing the Neighborhood links by adding Korea, China, Singapore, and Japan as the top traveling destinations. And soon they could see an increase in conversions by 10% from the Asian countries.
This example shows how raw data, when analyzed correctly, can be used to create new products, improve current products, increase website conversion, and much more.
What is Market Insight?
A marketing insight basically starts as data, and upon passing through multiple layers of analysis, and after deep thought and reasoning, it emerges finally as an agent of change.
“Insight: A truth which until now has not been leveraged, but if leveraged will generate revenue.” Says Morgan Shorey, who was the Director of Business Development at Berlin Cameron United.
A great example of an actionable marketing insight was Heineken’s “Cities of the World” campaign.
When Heineken noticed that one of its crucial customer segments, comprising of young beer consumers, was becoming more inclined towards local craft beers, they set about collecting some data. While they understood that beer consumption was an important aspect of their consumer’s social life, Heineken’s consumer research also found people using social media, and online conversations to find out what was “the rage” in a particular area. Heineken identified a pattern signifying that this desire to find what was hot in an area was driven by a fear of missing out (FOMO). Using this valuable insight, gleaned from customer data, Heineken launched the “Cities of the World,” with a Twitter-based service called @wherenext to increase social conversations. They wanted to bring the classic brand closer to their modern customers. The campaign led to a growth of 5% (in terms of volume) in the top twenty markets of Heineken.
Customer Data to Create Valuable Marketing Insights
Companies that leverage customer behavior data and create insights outperform peers by 85 percent in sales growth and more than 25 percent in gross margin, according to research by McKinsey.
Here are 4 ways in which marketers can use customer data to draw interesting marketing insights:
1. Personalize Customer Journey
Each stage of a customer journey is different and brands have to customize their marketing efforts to give excellent customer experience.
At the start, customers need awareness about the brand and its offering. At a later stage they have started to narrow down their choice, and now need a different marketing strategy. Towards the end of their journey, they expect ongoing support and channels to share their customer experience. Customer data plays a crucial role in each stage to offer the customers their desired outcome.
It’s important to get deeper, industry-based marketing insights on how potential consumers perceive different industries, what do they need from a particular range of products, do they desire a particular benefit from product or service, what do a particular segment of consumer believe in, and so on.
With this customer data, marketers can personalize the customer journey by offering dynamic content, personalized ads, and product recommendations. This leads to an enjoyable customer experience.
2. Predict Customer Pattern/Behavior
Look at this search data:
- Google queries relating to housing and real estate over quarters, turns out to predict what’s going to happen in the housing market.
- Google search relating to flu symptoms and treatments reveal the volumes that can be expected in hospital emergency departments.
Customer data when converted into useful marketing insights goes a long way in predicting your customers’ future choices. It allows you to craft your marketing messages based on the predictions. By collecting and analyzing customer data, marketers get to know where to focus their time and effort to deliver an extraordinary customer experience.
With the help of prediction analysis, marketers focus on building marketing strategies, discounts, promotions, and social media messaging.
3. Gain Competitive Advantage
Look at some of the examples.
- Netflix, which was once laughed at by Blockbuster for a partnership offer, has now emerged bigger than Walt Disney Co. and is the number one media company in the USA.
- Amazon, which started off its operations from the garage in the 1990s, has become the world’s biggest online retailer.
- Domino’s, who had a meager $3 per share in 2008, is now the largest pizza company in the world.
These companies have discovered methods to beat their competition, and have emerged as kings in their industries. All these companies have used customer data to outmarket their competition.
To stay afloat in this ever increasingly competitive landscape, companies have to get creative by understanding their customers.
Marketing expert Nicole Molkentin says, “In today’s marketing world, the way that brands can differentiate themselves from competitors is by creating an emotional connection between the customer and the brand. This means customization, self-expression and storytelling throughout marketing campaigns.”
4. Design Data-Driven Marketing Campaigns
Look at some Data-driven marketing campaigns that make use of the customer data to improve and optimize performance. Customer data enables companies to target the needs of its customers and thereby build high-performing marketing campaigns.
For example, DIRECTV launched a marketing campaign to connect with new customers. With the help of consumer data, the company launched a marketing campaign to target homeowners who recently applied for a change of address. It was observed that when people move to a new place, they generally tend to try out a new service or switch providers. With this in mind, they designed a personalized version to target these visitors who are looking for change. The result was great. The personalized and the data-driven version of the website outperformed the standard version.
Marketing Insights are Like Superheroes
In the age of big data, social media networks, and online conversations, marketing insights have become more fundamental than marketing strategies. A few decades ago, we were in a “push” driven marketing era, where the marketing messages had to be driven down to the customers. Now, in the age of the marketing insight, it’s all about using customer data to glean specific and actionable marketing insights, so that the customer can be naturally “pulled” or attracted towards the customized message.
Customer data by itself is not powerful. It is similar to Bruce Banner. Banner, on his own, maybe a brilliant scientist. However, he only becomes a true Avenger after transforming into the Hulk. Similarly, customer data only becomes a superhero for marketing firms when it is converted into deep marketing insights on consumer behavior.