20 January, 2012
Digital Loyalty Data for CPG
So how do you leverage Data and Customer Experience to drive loyalty?
First you have to understand that everyone is different. From the moment that mom discovers she's having a baby, until junior goes off to University, she is on a journey along a unique path of the customer life cycle. She'll be exposed to many things that others go through, but she'll go through them at her own pace. Her basket's product mix will shift slightly with each passing week as the baby grows and develops different tastes, habits, visits new places, goes to the beach and take their first fall.
There's only so much data you can infer from a postal code. CPG manufacturers need to understand their customers at a much deeper level if they want to change behaviour, build brand loyalty or anticipate needs to drive sales or product trial. We can look at aggregate purchase data of a 'typical' customer from sources like Coalition loyalty programs, Proprietary retailer programs or measurement data like Nielson. --But this doesn't let you understand your customer to the point where you know the day they switch from toddlers to cruisers or from formula to baby food to solids. You don't know her birthday so you can surprise her or her baby's birthday so you can keep track of their progress. You just know generally what people who look like your customer are doing.
How do you develop a relationship with a stranger?
Answer? You can't. If you want to develop a relationship with a customer, one that's meaningful to your business and their lives, you need the whole picture. You need to know where they're shopping, what they're buying, what they're not buying, when they shop, what their family looks like,-- you need to understand them.
So how do you mesh understanding across an array of categories?
Think of each category like a piece of the puzzle. Understanding everything about one category will still not show you the big picture. You need to try to incorporate all the pieces you have to form the full picture. Some pieces aren't even in your business: The Social Graph. How your customer interacts with others, their friends and family, other brands, all feeds into a holistic view of that customer that is unique to them.
So do we need to know everything to make a marketing decision?
Of course not. Just like when you're starting a puzzle, you have the box to give you a rough idea of what they'll look like at the end. Call this the aggregate or persona data. You generally know it's a bird flying over a lake with trees. But how all the pieces fit together and bring clarity to the image require many pieces of the puzzle.
Where does digital fit into all this?
Everything is about data and learning and understanding. Businesses want to Get, Keep and Grow their customers. Acquisition, Retention and Up-sell/Cross-sell. They want to take all of this understanding and turn it into some kind of offer that creates an incremental lift in sales. That's what it's all about. So what about when you know different things about every single one of your customers? You need automation, machine learning, real-time analytics, real-time customer experience changes, tailored business rules and of course personalized and customized communication deployed automatically. You need a system that can take all of the data from purchase, data from referrals, reviews and preferences, historical data, geographic data, layers of social data and turn that into an experience that scales for every customer. Sounds good right?
This is happening now. Some companies get it and some don't, but most companies that have any SKU level data about purchase behaviour tied to the customer level have started down a path towards this data utopia.