Four steps to building a data driven marketing strategy: part 2
In part one of this four-part blog series, we looked at the different types of information you may hold on your customers and what that data can tell you. Whilst it’s a good start to building a more data driven marketing strategy, it’s a shallow data set from which to work.
Third party data - what others can tell you about your customers?
By engaging a third party data provider, who can tell you what they know about your customers, you’ll yield more powerful insights, more targeted marketing strategies and ultimately, a bigger slice of the pie.
Enriching your data via a third party can also mean filling in any gaps. A customer’s address may have changed, or you may be missing basic contact details such as phone numbers.
Identifying demographic values, such as the age of your customers or what type of property they live in, is also crucial. If you know which customers have swimming pools, then you also know that their energy consumption needs will be higher. Demand for pool supplies is another takeaway.
What else can third party data providers can tell you?
Psychographics: How much do you know about your customers’ personality, attitudes, values, interests or lifestyles? Commonly defined as IAO variables (interests, activities and opinions), psychographics is ‘the why’ part of the equation. For example, your proprietary demographics may tell you that women buy more perfume than men. But why? Are they purchasing purely for themselves, buying gifts, or are they more likely than men to use multiple fragrances?
Credit risk: If you’re using data driven marketing strategies to capture new credit-based customers then it’s vital to know whether they’re able to make repayments. Knowing both your existing and new customers’ credit history allows you to further segment your data and reduce risk. For example, if you’re a financial services provider marketing a new credit-based product, you’ll want to know what group or segment of customers best fits the credit criteria.
Customer life stage: This is about relevance – about knowing where your customers sit in terms of life stage. Is the customer about to graduate from university? Or are they about to retire? Perhaps they have young children or are about to start a family. Being aware of significant events in the customer life cycle means more relevant marketing. It’s about selling a product not by service or benefit, but based upon where that product fits within their life cycle.
Social media: If you’re not gathering and incorporating data from social media into your segmentation strategy, then it’s a good idea to use a third party. There’s a lot of ground to cover with the myriad of social channels in which your customers may engage. The way in which each customer uses social media provides real-time, detailed data, that holds valuable cues for data driven marketing.
Segmenting your customers via various social media preferences will enable you to generate new leads, communicate better with customers and ensure your digital marketing spend is going to the right place.
Value segment: This is about segmenting customers according to how valuable they are to your business. It’s a combination of assessing their current value (in terms of revenue and servicing) and their expected future contribution. For example, some customers may spend large amounts, but that revenue may be offset by large servicing demands. Identifying which customers to invest in maximises revenue and increases efficiency.
The different types of data that can be collected and analysed in what is a constantly evolving industry is mind boggling. With more data comes better segmentation; the capacity to uncover hidden customer behaviour patterns and previously unknown associations.
This allows businesses to build better marketing strategies and make more accurate predictions and decisions.
Part three in our four-part blog series will look at how to combine your own customer data with that of a third party.
Meanwhile, download our white paper on customer segmentation for more information.