Let’s imagine that you just got asked on a date by someone who you’ve been pining after for quite a while. You Facebook stalk him and find out that he loves the Denver Broncos (Go Broncos!) and frozen yogurt. He picks you up and takes you to dinner, and you can see that he doesn’t seem that interested. He asks you what you like to do on weekends, and you tell him that you like to watch football especially your favorite team, the Bronco’s. The date starts to pick up and he seems more interested, after dinner he asks if you want to do something else and you suggest frozen yogurt. At this point he is starting to feel like he has found his soul mate (I mean c’mon now, no one else has loved both the Broncos and frozen yogurt!), and before he walks to the door at the end of the night, he asks you on a second date. The fact is you just personalized this date. Was it creepy? Perhaps. Did it work? Of course, after all you got a second date! Well this in a nutshell is database marketing. Database marketing is when you use databases of customers/potential customer’s data to create personalized communications for marketing purposes.
I don’t think I have to go into depth about why personalization works. A large part of marketing is about establishing a relationship between your customers and the brand. Personalization helps establish this relationship by helping the customer get better recognition, get relevant offers and experiences, thus helping the customer feel as if the brand knows them. This helps the organization benefit from increased customer retention, and increase returns on investment.
But where to start? Well here are 5 good steps to help start personalization and build a relationship between you and your customers:
- Prioritize what to personalize- I know, I know so many choices!
- Estimate customer’s expectation of personalization- Customers expect a large degree of personalization and it is a good idea to have an idea of what this expectation is BEFORE you start
- Distinguish between known and unknown attributes- If you are relying on analytics then it is necessary to take known attributes to help establish unknown attributes
- Understand how complex the analytics are-Where ever the firm is at with analytics and technology adoption allows how sophisticated the firm can get with analytics
- Choose the interaction content- This is the channel where the firm or customer initiates a contact
The Obama campaign is an incredible example of database marketing done fantastically. Obama’s use of “big data” is what won him the campaign. The Obama campaign sent out emails to supporters to join a ticket dinner in June. Different emails emphasized different people attending the dinner, and emails were sent according to the data. This means that some emails mentioned that Mariah Carey would be there, others mentioned the vogue editor, and some talked about the second fundraiser being held at the dinner that night. Multivariate tests were used to identify issues and positions that would change undecided voters to vote for Obama. The Obama campaign used cookies to track its supporters, and thus develop a campaign that was personalized to each voter-telling them exactly what they need to hear to sway their vote. Well the fact that Obama even used “big data” to win the campaign is genius enough. The team started back in 2008, and I think that Obama certainly put more than just hard work (also a big brain) into his campaign and deserved recognition for taking things to the next step.
A major problem that occurs with so much personalization is crossing ethical lines or coming across as creepy. There are some situations where it seems as if the firm was flirting with the line between acceptable and creepy. Target is a good example of this. Target was able to narrow down 25 items that allowed them to assign a pregnancy score to each customer. Target was able to then entice husbands and the pregnant women to buy baby –related products and then would push them to buy other things like groceries, clothing, and toys from Target as well. Well this sounds like a genius marketing plan, it just might be too genius. A man in Minneapolis came into the Target store with coupons for baby items addressed to his daughter, and angrily confronted the manager. The manager of the Target store apologized, and the next day when he called to apologize again the man admitted that he had talked to his daughter and she was indeed pregnant. I think this story captures the whole essence of personalization in marketing. Target was so good at using personalization to market towards pregnant women that they were able to uncover a teenager’s pregnancy before her Dad was. At the same time this brings up the important question of is there a point where a line should be drawn. I think that this Target case is important in emphasizing that there is a large difference between Amazon and its recommendations and Target sending baby coupons to those with a high pregnancy score. Having a baby is such an emotional, intimate thing, and I think that when marketers try to become too involved too early there are some ethical lines that are potentially being crossed.
Let’s get into this a little bit deeper and talk about what I mentioned before which is: big data. Big data is using huge data sets and using analytics to better target customers.
- The value of big data is supposed to increase drastically from $18.1 billion in 2013 to $47 billion by 2017. Insane, right?
- There is supposed to be a 60% increase in marketing analytics over the next 3 years
- 3 billion people create 8 zetabytes of data
- 71% of marketers will implement a big data analytics solution in the next three years (3/4 of marketers!)
So whether you are going to be one of 71% implementing the big data analytics solution or the consumer who falls for all this personalization, one thing is for sure, big data is the new way of marketing, and for good reason. After all if you could bypass the awkward first date, wouldn’t you?
Crovitz:Obama’s Big Data Victory. (n.d.). The Wall Street Journal. Retrieved October 31, 2013, from http://markstaton.files.wordpress.com/2013/10/obamas-big-data-victory-wsj-com.pdf
How companies learn Your Secrets. (n.d.). New York Times. Retrieved October 31, 2013, from http://markstaton.files.wordpress.com/2013/10/how-companies-learn-your-secrets-nytimes-com.pdf
The Benefits of Big Data Marketing (Infographic). (n.d.). Business 2 Community The Benefits of Big Data Marketing Infographic Comments. Retrieved October 31, 2013, from http://www.business2community.com/infographics/benefits-big-data-marketing-infographic-0652195
Use Customer Analytics to Get Personal. (n.d.). For Customer Intelligence Professionals. Retrieved October 31, 2013, from http://markstaton.files.wordpress.com/2013/10/19212-use_customer_analytics_to_get_personal.pdf