Mistaken identity: Rethinking who customers are in a post-pandemic world

During the pandemic, consumers have changed habits, uncovered new needs, tried different brands and established new brand relationships. They’re no longer driving by the same stores on their way home from work or relying on their daily commute to run errands. They’re buying online more than ever.

The pandemic has created profound changes in the identities of your best customers.

As a result, as a marketer, you must take a look at your business and customers and draw insights to understand this new reality. What you discover may drive changes in your target audience and customer engagement strategies. It also may uncover new opportunities to nurture customer relationships, keep long-standing customers or build strong relationships with new ones.

Canada Post’s Sophie DeLadurantaye, Director of Data Solutions, recently sat down with four experts to discuss identity data, targeting and segmentation and how important it is for marketers to look at their data in fresh ways for targeting relevance.

Richard Boire | President, Boire Analytics

Allen Davidov | SVP and Practice Leader, Environics Analytics

Tim Leys | CEO & Chief Data Officer, CiG

Emma Warrillow | SVP Data and Analytics, Shift Paradigm

Do recency, frequency, monetary value (RFM) models still have a place in modern database marketing and predictive analytics?

LEYS | RFM still has an important place in developing scoring algorithms for targeting existing customers, prospect behaviour and profitability modelling. However, RFM cannot be used in isolation as it only reveals the transactions and nothing about the actual customer.

DAVIDOV | Of course they have a place, but as opposed to being the only approach, RFM models are now best used as a layer to help pull out specific customers or groups of customers you may not consider otherwise. With the addition of segmentation and third-party data that consists of demographic, behavioural, psychographic and mobility data, marketers can now build out a comprehensive picture of their customer file.

BOIRE | These tried-and-true techniques can still provide the backbone targeting strategies for many organizations. Why? Because the input metrics relate to past consumer behaviour. In improving targeting capabilities, this is always superior as compared to choosing modelling techniques including artificial intelligence.

WARRILLOW | When clients have access to more holistic data, there are more sophisticated ways to segment customers. That said, the RFM levers should be tested for your organization to determine how important they are. In some industries, the RFM framework still proves fruitful. In fundraising, for example, past donation amounts, recency and giving patterns are typically good predictors of future action; however, by only looking at these levers, charities may miss opportunities to identify a donor who would give a larger donation if solicited for it.

How can marketers augment their customer transactional data for deeper insights?

WARRILLOW | Transactional data is an important piece of the customer insight puzzle; however, it should be augmented. Marketers should expand their definition of transactional data to include behavioural data from all channels. Think about email clicks, website activity, SMS actions, in-app actions, call centre activity, cellphone location, survey responses. Third-party data can also often be linked to customer profiles at a postal code level to provide more information. Some marketers have access to additional third-party data through their loyalty programs or industry affiliations. When this can be linked to customers, it can also be rich in information.

LEYS | There are two approaches for marketers. The traditional requires in-house resources and purchasing costly data licences. The emerging involves subscribing to an insights platform that includes third-party data as a service and a built-in automated workflow to append your data, using a common identifier (postal codes) to the platform data. Augmenting is the first step, but the real opportunity is building, profiling and activating new audiences at scale. Identifying look-alikes, building trigger programs and enhancing your geofencing all become feasible with an automated insights platform.

BOIRE | The use of any consumer behaviour data, including web-browsing behaviour, relies on what the consumer did as potential input data and what they will do in the future. The use of valuable third-party geodemographic data is a valuable source of information where we can analyze the demographics of where that consumer lives as an input into analysis.

DAVIDOV | Take a look at privacy-friendly third-party data. This type of data can help fill gaps in your customer’s file – given the limitations of a transactional file – and help marketers better understand, engage and reach customers. Armed with demographic, behavioural, psychographic, financial and mobility data, marketers can build stronger strategies for each persona within their customer file and put campaigns together that hit the right notes when it comes to the type of channel, location, tone, creative and message. This changes a one-to-many approach to feel much more targeted and personal.

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How can marketers use data to effectively communicate throughout the customer journey?

WARRILLOW | By collecting data from across the customer journey, marketers can better understand when customers are ready for their message and tailor what they say. This also means that marketers need to look for event information – not simply trying to predict when a consumer might get married, for example, but using data to see that they are visiting wedding websites.

LEYS | There are so many ways, but I like lifestyle-trigger-based programs. To build a scalable trigger program, you need to identify the signals in the data to predict a certain lifestyle change that aligns with your product. Let’s use moving as an example. All the potential transactions – selecting a mortgage, booking a mover, getting insurance, changing the locks on the door – represent a major opportunity for marketers. Having access to data, such as a pre-mover data set, can significantly scale trigger-based programs.

DAVIDOV | With a plethora of data, particularly third-party data, marketers can be much more intentional and specific when creating, executing and refining their customer journey mapping. Marketers can understand their customers’ behaviours on any type of media, including online and social media, with knowledge of their specific use cases for each. With the additional layer of psychographic attributes, marketers can frame a product and/or service in a way that would be attractive and push for specific engagement or action.

BOIRE | This question gets to the notion of change and identifying key moments of change that occur for that consumer. For many years, my consulting business has advocated the use of certain approaches in identifying these types of consumer changes. In most cases, these approaches rely on the simple use of statistics to identify out-of-pattern changes.

How can data and tech personalize communications at scale with direct mail?

DAVIDOV | As the volume of data collected or retained has grown and evolved, there is a tremendous opportunity for marketers to leverage new technology to better reach and target prospects in real time through personalized communication at a mass scale. By leveraging APIs to connect to external interfaces, privacy-friendly data or martech stacks, marketers can make quick decisions and send out direct mail soon after clients have visited a brick-and-mortar store or website or engaged with a social media account. The chance of eliciting a positive response increases significantly when you can get closer to the moments when customers engage with a brand.

LEYS | Yes, data and segmentation can now better inform your offer and creative, but the real opportunity is connecting and enhancing all media channels. We need to think in terms of audiences and how to reach them at the right time and place. Today, we can connect the rooftop to the mobile device, allowing us to both scale and improve the precision of direct mail by connecting it to digital based on a defined target audience.

WARRILLOW | We are seeing many organizations leveraging a customer data platform (CDP) to collect and connect information and to orchestrate campaigns through a variety of channels. The power is in figuring out which campaigns make sense to execute through which channel, and how channels can complement one another. By collecting in-the-moment data, communications can be hyper-personalized and timely. While a lot of that orchestration tends to be online, there is no question this information should be used to push relevant physical communications to the right constituents.

BOIRE | Remember, these new and better tools must be used by a human. And it is that human who is still fundamental to the process of how to use these tools to develop the solution that solves the right problem.

What’s one thing marketers should consider about post-pandemic customer segmentation?

LEYS | No matter what you sell, your customers and future customers all live somewhere. The shift to all things digital means we are missing out on one of the most precise and accurate ways to build out targeting, and that is through geography. Home addresses and the six-digit postal code offer a powerful common identifier that ties our insights, media and customers together in a targetable and measurable way.

DAVIDOV | Marketers should remember that people’s values don’t change – only their engagement does. Meaning that what’s important to them, what will attract them and catch their eye, hasn’t changed. And won’t. Therefore, marketers should spend more time understanding and focusing on psychographics to either retain or attract their customers and prospects.

BOIRE | I have always been a strong advocate for customer migration analysis. Its relevance becomes even more significant during times of great turmoil. This was the case with 9/11 when, as analytics practitioners, we advised our clients on customer migration patterns in terms of pre- and post-9/11. The rationale behind this – that consumer behaviour has fundamentally changed – is certainly the case with COVID-19.

WARRILLOW | Marketers always need to consider what the data is saying and why the data is saying it. Consumer behaviours have and will continue to change; some of those changes may be temporary, but others may be more permanent in nature. We suggest marketers attack segmentation from both a behavioural perspective and an attitudinal one. By pairing up research with data analytics, marketers can get to the heart of what matters to their customers. Segmentation that considers this holistic picture will be much more effective.