Using Customer Data to Build a Community Around Your Brand
Let’s talk about brands.
A brand is more than a label. It’s a symbol, a marker, a totem that carries power.
They give birth to identity.
They create feelings of safety, security, power, and familiarity. Think of Nike. Apple. Coca-Cola. Ferragamo. Facebook.
These brands weren’t built in a day.
Fans of the (excellent) podcast How I Built This will occasionally hear stories of innovative brands that were founded on the gut feelings of a brilliant entrepreneur.
But in reality, even when a spark of intuition was the key to initial success, long term, there is always a robust, data-driven marketing strategy working behind the scenes, built on a foundation of customer data.
The Value of Customer Data
The primary value of customer information is that it allows a company or brand to become customer-centric. Now, nearly every company calls itself “customer-centric.”
But when pressed, most executives either don't have a good definition for customer-centric, or their companies aren’t living up to it.
So here's what it really means to be customer-centric, according to a professor at Harvard Business School:
“Becoming customer-centric means looking at an enterprise from the outside-in rather than the inside-out — that is, through the lens of the customer rather than the producer. It’s about understanding what problems customers face in their lives and then providing mutually advantageous solutions.”
Here's the problem: Many companies have little to no way of knowing what their customers are facing and what they want in their lives. This lack of innate understanding is why keeping track of customer behavior analytics is so important.
It’s also why when Proctor & Gamble was seeking the best approach to introduce Gillette razors into India, 20 US-based executives made over 300 visits to the country. Often, American P&G staff stayed in the homes of Indian consumers for days on end in order to observe their shaving habits firsthand. By the time they finished their project, they knew how to position both their brand and products to be successful in the Indian market.
If you’re a small business, collecting customer data like this may seem impossible - especially for businesses looking to reach a California audience (more on the California Consumer Privacy Act here and the California Privacy Rights and Enforcement Act here). Thankfully, you don't have to send your executives to live in your customers' homes to gather useful customer data.
There are several methods you can use to become more data-driven. You can do small things like survey your customers, or track their behaviors on your website. You can even implement conversational marketing techniques to automate parts of this process and drive greater trust with your website visitors.
Or, better yet, a well-connected agency can provide you with actionable consumer insights based on their stores of data.
Taking these small steps to accumulate and use your customer and industry data can help you drive your brand strategy to become customer-centric, decreasing costs and increasing sales through better targeting, all while staying compliant and secure.
Benefits of a Data-Driven Marketing Strategy
Before gaining access to good customer data, many companies have consumer personas that are little more than age-demographic sketches based on whatever information they've been able to collect through a small number of customer interactions and industry research.
One company I worked with took a typical age-based approach to customer personas, but it wasn’t getting them anywhere.
It was difficult to figure out how to target and treat a 50-year-old customer versus a 35-year-old customer, and as a result, their marketing team wasn't using personas at all. After an in-depth analysis of customer data, using both internal and external resources, the company landed on a much more sophisticated set of buyer personas.
Instead of using age (which turned out to be a statistically insignificant factor) to segment, they used actual consumer behavior: Where they shopped, how they made their purchases, what kind of media they preferred to consume (like podcasts, videos, or magazines), and so on.
Better customer data led to better-informed marketing decisions and a significant increase in revenue.
Or here’s another example: If you’re a healthcare company targeting a geriatric population, and due to economies of scale, you benefit from high concentrations of seniors, you’d benefit from knowing that California has the fastest growing rate of seniors in the country.
But the more actionable piece of information would be knowing where these seniors prefer to get their information about healthcare. Armed with this information, you can advertise your services where your audience is already active and engaged.
Better personalization follows logically after better personas.
Think about it.
If you don't have a data-driven approach to finding out who your customers are, attempts at personalization will be a shot in the dark. But what if you had an accurate buyer's journey model, and data-driven methods to target consumers where they were at with personalized ads?
Let’s look at buying an electric vehicle.
The automotive consumer participates in over 900 digital interactions on the way to purchasing a new car.
Oh, and by the way, 80% of consumers are more likely to make a purchase when they have personalized experiences with a brand.
People want to feel connected with what they buy; they want to feel something based on the brand image they perceive.
More Streamlined Processes
Leading with customer data and being customer-centric will also streamline your processes.
It’s quite simple.
If your company is trying to be customer-centric without actual data to make decisions on, what’s your North Star?
How do you decide what is a priority and what should be sidelined?
To return to our electric car example, if you’re trying to reach a market with a better than average probability of conversion, it would be important to know where your ads had the highest chance of reaching ready-to-buy consumers.
Did you know that SFGATE readers are 27% more likely to purchase an electric vehicle in the next 12 months than other Bay Area consumers? (PS: you can download our Auto Media Kit for more information on this topic). As the company responsible for popular media brands like SFGate and the San Francisco Chronicle, Hearst Bay Area has tons of audience behavioral information that they use to inform the marketing and advertising strategies of their clients.
Based on this information, you could make the informed decision to advertise on the SFGATE platform rather than on competitor platforms, streamlining your decision making process, and also streamlining your operations—often it makes more sense to invest more ad budget into fewer platforms.
This can also help you consolidate your brand to focus on key elements of differentiation rather than watering it down to try to appeal to a mass market.
More Accurate Forecasting
With consumer data, you can also forecast sales more accurately.
Now that we know SFGATE readers are 27% more likely to purchase an electric vehicle in the next 12 months, using some basic calculations, you should be able to create a better forecast than if you simply spread your ad budget equally across multiple platforms where you had no data on intent to buy.
Of course, it’s best when you can combine your data with that of an agency.
While this trend is changing, it can still make sense in some situations to work with one primary agency, who can orchestrate data appends through firms like Epsilon, increasing your ability to forecast sales accurately.
Or, if you work with an agency backed by a large publishing company (as is the case with Hearst Bay Area), you automatically have access to deep stores of customer data across pretty much every industry.
Partnering with a brand like Hearst means that you can not only gain a strong understanding of how different segments of customers consume media, you will also have a direct line to get in front of the right people on the most optimal channels since Hearst owns newspapers, magazines, television stations, radio outlets, and more, across the country.
Integrated Marketing And Advertising
Finally, a customer data-driven strategy will allow you to integrate marketing and advertising.
This may sound confusing—after all, advertising technically falls under the umbrella of marketing.
But in practice, without customer data to build decisions on, marketing strategy and advertising solutions don’t always align.
An ad agency’s vision for reaching customers may seem to meet the requirements set out by the marketing team, but if the marketing strategy hasn’t been developed from real customer data, an ad campaign may flop—not because the ad agency failed at their job, but because the marketing team failed to know their customer.
With good data, marketers can communicate customer preferences clearly to their media buyers, and expect to see better results.
Building a Community Around Your Brand
The usefulness of customer data doesn’t end when you make a conversion.
The most effective long-term use of customer data is to create brand advocates who are so loyal to your brand, so excited about your products, that they become voluntary sales reps for your company, telling friends, coworkers, and even strangers on airplanes about their passion.
To leverage consumer data like this, you have to keep up on where your customers are spending their time, what their unmet needs are, and, going back to the definition of what it means to be a customer-centric business, "providing mutually advantageous solutions."
The time and money you spend turning customers into brand advocates is one of the most impactful investments you can make.
84% of consumers still prefer to make purchase decisions based on word of mouth recommendations.
Plus, if you create an ambassador or loyalist program, you can create opportunities for interactions with your most vocal customers, collecting primary data from them that you can then incorporate into your strategy.
To build a brand, you have to, at the same time, build a community: a tribe of people that are devoted to the same symbols and ideas that your company represents.
Your product developers and your marketers can't be allowed to work in isolation—they need to be exposed to and informed by consumer insights.
When everything goes right, it turns into a virtuous cycle, where customers inform products and messaging about products, while at the same time being informed and influenced by the messaging and products they have helped create.
It's a win-win.
This article first appeared at Hearst Bay