This is an amazing time to be a marketer. Data seems to rule the world and the promise of “big data” is everywhere. But, marketers need to balance their awe of big data with the practicality of achieving measurable business goals that don’t break the bank. Even in technologically-dominated times like these, it’s good to remember the old expression, a bird in the hand is worth two in the bush.
Technology exists now that allows data to be processed and analyzed at speeds barely imaginable just a few years ago. And it wasn’t long ago that businesses looking to get smart about customer data were forced to invest heavily in technology and resources. Now, marketers can use technology to analyze and understand their customer data in a way that does not rely on expensive infrastructure and systems.
The lure of the 360 degree customer view is hard to resist. But, too many marketers find themselves swimming in a flood of data to reach this dream, losing sight of why they want that 360 degree view of the customer in the first place.
Marketing exists to drive more sales. Companies throw time, money and staff at the dream of this complete view of their customers and often spend more time building systems than executing well thought out, data-driven campaigns.
The foundation of any data-driven marketing strategy should be a deep understanding of your current customers. Devoting attention and resources to examining and discovering the value locked into their behavior is often the fastest, most cost-effective route to ROI.
What’s the smartest way to dig in?
The best predictor of the customer of the future is the customer of the past – if we can identify the attributes of the best past customers, we can use them to predict the best future customers…
So, before signing up for a major plunge into your data in search of magical, undiscovered rewards, ask yourself if you can identify your best customers. If not, get started. Pick a metric, define it, and let the data lead you.
Then use a combination of recency and frequency, plus sales information to identify those best customers. Depending on the circumstances, you may also use another measure like lifetime value. Rank your best customers and understand how these customers drive your business.
The 80/20 rule usually holds – 20% of your customers will drive 80% of your business. And that’s where you really dig in to start replicating your most profitable sources. Once identified, use these customers to find your best prospects across all channels.
Get a good look at attributes and behavior in terms of the metrics you’ve set. Develop a deep understanding of customer attributes such as distance-to-stores, income, urbanicity, interests, etc., and both offline and online behavior. Combining knowledge of both attributes and behavior will lead to powerfully predictive models of your best prospects.
Now, you can start your marketing already knowing you have the best prospects targeted. Then measure everything to keep sharpening your focus. Begin the usual test-and-learn cycle with this supercharged starting set and you will be getting a jumpstart on your competitors while achieving your marketing objectives.
Marshall Gibbs is chief operating officer of Target Data, which unlocks the power of customer data through targeted marketing campaign execution that enables businesses to quickly identify, attract and keep their highest value customers.