As a marketer, nothing is more rewarding or lucrative than knowing exactly who your customers are, and being able to provide them with what they want, when they want it, and how they want it. As a customer, nothing can be more frustrating than receiving marketing communications from brands that disregard all of this.
Achieving a long-lasting business-to-customer relationship requires a significant amount of data-driven intelligence, as well as the willingness to embrace new advances in marketing and data management technologies. According to Teradata (opens in new tab), just 18 per cent of marketers say they have a single, integrated view of customer actions.
Some businesses are able to thrive by understanding their customers on a granular level, while others struggle to paint a picture beyond simple demographic data. However, two things are abundantly clear.
Firstly, the more brands learn about their customers’ identities, the more effective they are at marketing to them. Secondly, irrelevant marketing communications are a waste of both time and money at best. At worst, these irrelevant messages can even cause offence. In order to best understand customers and avoid such instances, organisations must break through the identity barrier and market in a more personalised fashion.
I believe there are four different levels of customer understanding that help personalise marketing:
1. Basic User Understanding
At this level, organisations know almost nothing about their customers, and have not been able to get past the identity barrier. Customer data is limited to email addresses, and the data acquisition strategy basically boils down to either an email newsletter signup page, or the purchase of information from third-party data brokers.
In terms of database infrastructure, customer data sits in different silos - one for email, one for mobile, etc. - which prevents the achievement of a single customer view.
In this case, it can be hard to tailor marketing communications, as there is no tangible data to make the messaging relevant. Assuming certain things about customers can be tempting, but should be avoided to ensure nobody is left embarrassed.
For example, a company specialising in personalised products looking to market for Valentine’s Day should not assume that every Mrs in their database has a respective Mr. These individuals may be recently divorced or in a relationship with another woman.
2. Basic Identity Understanding
This is the first level of customer understanding where brands are able to break through the identity barrier. By leveraging an acquisition strategy revolving around either traditional site registration or social authentication (opens in new tab), organisations are able to capture, at the very least, demographic data.
Users can be targeted with marketing messages based on age, gender, location, and perhaps a few other basic data points. Database infrastructure is unified, and the separation of customer data into silos is no longer a concern.
3. Sophisticated Identity Understanding
At this level, customer profiles are much more extensive, and include demographic, social graph, and transactional data. Data is acquired via registration flows, social login options, and customer loyalty (opens in new tab) programmes.
The customer experience is much more personalised, and users can be targeted based on factors such as purchase history, detailed site preferences, or social profile information including likes from Facebook or occupations from LinkedIn.
Customer data is stored in an advanced database (opens in new tab) built with a dynamic schema structure that is capable of normalising both relational and unstructured data. All user data is kept private, in compliance (opens in new tab) with social network terms of service, and automatically up-to-date, which is vital for brands looking to personalise.
4. True 1:1 Relationship
Finally, we’ve arrived at every marketer’s dream level of customer understanding. In this scenario, businesses are able to build complete customer profiles (opens in new tab) with demographic, social, transactional, and behavioural data, all while respecting user privacy.
User data is compiled from registration fields, social profiles, onsite engagement tools such as comment feeds (opens in new tab) and product reviews (opens in new tab), and supplemented with audience-based media buys. In addition to utilising a dynamic schema, the database is fully connected (opens in new tab) to existing marketing tools such as eCommerce platforms, email service providers, and recommendation engines for seamless data export.
The level of customer understanding is so clear, that individuals can be targeted in real-time with optimised marketing messaging. For example, a user could automatically receive a push notification when a clothing item manufactured by his or her favourite brand comes available in the user’s size or a loved one’s birthday is around the corner.
The establishment of 1:1 relationships with customers and the creation of truly personalised user experiences are becoming more and more essential for businesses every day. According to Digital Trends (opens in new tab), 73 per cent of consumers prefer to do business with brands that use personal information to make their shopping experiences more relevant.
By carefully considering their communications and leveraging customer identity data in their marketing initiatives, organisations can avoid upsetting or offending customers.
With customer identity at the core of marketing, offensive communications can rest in peace.
David T. Scott is CMO of Gigya (opens in new tab).