Once upon a time, marketing experts relied on past experience and their own intuition in order to understand the customer and their buyer behavior. By using ex-post methods, such as focus groups and polls, marketers would use the insights gathered from these methods to build an image of their customer and crunch limited available data to try to envisage how their product will position itself firmly against their competition.
However, this has changed immensely with services such as Facebook, Amazon and Netflix coming into the fold and showing us first-hand how data-driven marketing doesn't just help us understand the consumer but it helps drive consumer behavior and substantially increase gains.
According to research done by market research firm Invespcro, marketing firms that exceed their revenue goals apply personalization methods 83% of the time. To add to this, businesses that use data-driven personalisation methods recorded between five and eight times the return on investment (ROI) on their marketing budgets.
So, what does this all mean? It might be time for you to consider using data-driven marketing in your own business to get a better sense of your customers and their buyer behavior. Here are 5 ways to better understand consumer behavior, with insights into the techniques that marketing pros can use to effectively deliver their message to the right audience.
1. Apply available data to your marketing efforts
There is no doubt that marketing has been revolutionized by data analytics. On an everyday basis, more data is being produced and made available. Think about the number of clicks you make when you're online window shopping, or the location pinpoints your smartphone can pick up when searching for "restaurants near me". From the many card transactions made every minute to the hours of video content consumed on YouTube, this is all data.
There has never been a time before now where more data was available for analysis. If we just take a look at our time spent online, mobile users in the Philippines take the lead spending up to 10 hours a day in front of their screens. It’s easier than ever for marketers to follow digital bread crumbs to gather and analyse data on consumer behavior, which will influence the marketing strategies for their chosen niche.
It goes without saying that converting the data you gather into actionable insight requires a combination of data analytics and communicating the resulting insights into actionable steps that will influence consumer behavior. The much-lauded leader in this field in the past couple of years has been Lenovo. According to them, they managed to develop a predictive model which helps them assert if a visitor to their website is going to buy one of their devices in a matter of seconds. By using this data, they carefully position customised content for the visitor with an accuracy of almost 90%.
2. Base your marketing strategy on scientific analysis
Even though the times have changed, the founding principle of a data-driven marketing strategy is still a very old one – understand your consumer and their needs. There’s still no definitive answer on how to predict consumer behavior. The rule of the thumb, however, is finding data which can be analysed and segmented, and thereafter expanded upon. For that reason, there are essentially three steps that need to be taken for a proper analysis to be conducted.
The first condition is to understand your customer demographics, their interests, search analytics and how all these can be merged into forecasting consumer decisions. Using the Audiense tool provided by Meltwater, brands can search for keywords and terms to establish a consumer group that engages with that topic the most. Breaking it down by factors such as gender, age group and related interests marketers gain data-driven insights into who the audience is and an understanding of their behavior as well as psychology looking into personality type and values.
As part of planning for your marketing campaigns, every marketer needs to know who they are targeting. One method of segmenting target market is the use of demographic data. This includes the use of data relating to the consumer research you did, as mentioned above. With this information, it’s important to divide your customer base into segments and prioritise target audiences who have the most interest in your field, particularly customers with intent to buy. Using the Audience tool, you receive analytics on consumer behavior and traits based on a specific discussion point related to your brand. This can then help influence marketing and advertising decisions.
In order to have a complete overview of your market, competition analysis is essential. Add to that the analysis of consumer behavior online and a company can be said to be prepared for connecting with and understanding their target audience properly.
Data-driven marketing is thus grounded in creating the image of the perfect consumer based on real people being analysed, thus focusing on influencing their decision-making process and attempting to predict their buyer behavior over time.
3. Implement a data-driven marketing strategy
Once you have your analytics on consumer behavior, the question that is naturally posed is – how can you actually predict anything?
We all buy certain items at certain times in our lives, the so-called life stage based purchases. Every time we buy a new car or a home, marketers can use this information to predict complementary purchases. By using these analytics effectively, they can target consumers by creating helpful content marketing such as articles or recommendations to increase sales.
This still might seem like some kind of dark art, but it is actually entirely based on what we do. Even though it is not possible to look for “people who just bought a new car”, it is possible to analyse existing databases to see people who have, at some point, bought a product and backtrack the buyer behavior and motivation that led to the purchase. By correlating this data with consumer demographics such as age, gender and income, it becomes easier to segment the market and find connections, consequently making much more successful predictions on your consumer's behavior and purchasing decisions for the future.
4. Remember, interest and intent are not the same
This is the trickiest part of data-driven marketing. It’s much easier to understand consumer behavior and interests of target demographics than the intent to buy. It is far different to just know that someone will buy something than knowing when that person is going shopping
This is where connecting databases is essential for marketers to devise a strategy. If a company is able to create a data partnership and gather information on shoppers from other websites and services, it will have an easier time measuring consumers’ intent. The universal wisdom here is as follows – if a person is looking at articles about cars, we can safely assume that the person is interested in cars. But, if that same person clicks on product pages of actual used and new car lots, this is a much better indicator of intent to buy.
5. It can do wonders for any business, anywhere
If you have a system set up, the information derived from it about your customers and their habits is a virtual El Dorado, limited only by your imagination and the skills of your data scientist. For example, a company with a telephone answering service which can correlate their customer insight at the door, so to speak, can achieve an incredible boost to their business.
Remember that consumer behavior is evolving all the time. Your business needs to understand its customers to effectively target them when they are ready to make a purchase. If, for example, there is a customer who begins their purchasing journey by visiting a physical store, this is going to be useful information that you need to know. Once at the store, the customer looks at what products are available and does further research in their own time. This could be looking at other customer reviews or getting feedback from people who have used these products before. Then ultimately, the same customer makes a decision and purchases one of your products online. Or the reverse could happen, where they see your products online and make the purchase in store. The customer journey may look a little different but as a business, how can you effectively ensure that this customer actually makes a purchase from your business? The answer lies in understanding that having information about your customers, and their consumer behavior will undoubtedly work in your favour.
The implications are endless, whether they are connected with empowering your sales department by giving them hot points which will result in a buy or your R&D by giving them insights into what your customers expect from your product.
Data harvesting is the new way of doing business, period. If you would like to learn how to use data to drive your marketing campaigns, request a demo and the Meltwater Team will reach out.
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