Last year, 'big data' was THE buzz word. And while big data is still buzzing about, marketers today are using the term more frequently as part of their everyday conversations, at least to some extent. It is clear that big data is no longer just a snazzy new word to use when marketers talk shop, but rather a concept that has proven its worth.
However, before running head-first into the big data leagues, marketers must first pay attention to the data they already have and the rich data assets available from third-party providers. When building a house, you must have a strong foundation before choosing your granite countertops, paint colors, and flooring. The same goes for your customer data. Before learning what your customers are doing on social media, you first need to know basic information such as where they live, their email address, phone number, and other important details. By then layering new types of data onto your current customer profile, you can build a robust, in-the-moment customer picture and know what to sell them - before they even realize they are ready to purchase.
While big data certainly has its place in the overall picture, let’s take a look at all the types of data you should be collecting to really make an impact on your bottom line.
1. Demographics & Firmographics - Identity Data
If you were to put yourself in your customer’s shoes, would you respond more favorably to a piece that said 'Dear Valued Customer', or 'Dear John' – assuming that was your name? And all consumers love discounts – if you know your customer’s birthday, you can make a great impression by sending them a discount on their special day.
Marketing is about reaching out to individuals – not to the masses. In order to do so, you need to know your customers as individuals. Information such as name, address, date of birth, gender, telephone and email information. You may already have this sitting in your database, but if you are missing important pieces of information, this data can quickly be appended from a third-party vendor. Data also decays quickly so be sure to take frequent measures to verify that the information you have is up-to-date.
2. Psychographics - Interests & Lifestyle Data
While demographics and firmographics tell you who your customer is, psychographics includes information on their interests, opinions, and activities. With a basic understanding of the facts, psychographics provides insights into your customers’ personality. For example, are they concerned with health issues? Do they like to play golf? Do they value career overall? Do they love the night-life or camping with the family on weekends?
Psychographics allows marketers to make basic assumptions as to what a consumer may do or buy. While one may assume that a consumer with environmentally-conscious traits is more apt to buy eco-friendly products, this is based on just that: assumptions, not actual behaviors. Marketers must delve deeper and add other forms of actual behavioral data to get the most accurate picture.
3. Behavioral Data
While psychographics may tell you why they buy, actual behavioral data looks at what they buy, how often, and when. A consumer’s behavioral data includes information on their purchasing history, channel preference, likes on Facebook, or ratings and reviews.
Do you like receiving emailed discounts but hate receiving sales calls? Wouldn’t it be nice if your favorite brands knew that and respected your preferences? Unfortunately, while marketers understand the importance of collecting basic identity data, research by Razorfish reports that 76% of marketers do not utilize behavioral data for segmentation or targeting. Many marketers continue to use practices that are outdated, segmenting by geography, age, income, and so forth.
However, with the advent of the digital age, consumers are no longer satisfied with messages that target their general age group or income bracket. Personalization has gone far beyond this and consumers want relevant messages based on their digital actions or purchase history. And if you don’t deliver, they will quickly head to the competition for a more personalized experience tailored to their specific wants, likes and dislikes.
4. Life-Event Triggers
Sending the right message, to the right consumer, and at the right time becomes much more impactful when you can determine significant life events most likely to trigger a purchase. An increasing number of marketers are recognizing the value of 'trigger marketing' as a way to target in-market consumers.
A Data-as-a-Service (DaaS) vendor monitors live data streams for any number of life events. For example, a consumer who just purchased a car is most likely to be in the market for new insurance. By monitoring VIN transfer data, these consumers can be targeted with offers within the first crucial 72 hours when a purchase is most likely to occur. Or a baby’s arrival generally triggers any number of new purchases, such as life insurance, larger vehicles, and new furniture. Newlyweds, newly divorced, new movers, recent college graduates, and new teen drivers are all experiencing life event changes and are more likely to be in market for certain products. The key is finding and sending messages to these consumers during the window of opportunity before the opportunity is lost.
Data today comes in all shapes, forms, and sizes. Savvy marketers know that each type of data brings value. It’s about starting with the basics and progressively layering new types of data so you not only understand who your customers are, but what they like, how they shop, and when they are about to make their next purchase.