Customer insight is changing direction. As we prepare to welcome in a new year, the digital marketing industry can expect innovative new ways to achieve what they are eternally striving for: truly understanding their audience.
In 2015, 74 per cent of brands told the World Federation of Advertisers that they were unprepared to take advantage of the ‘big data opportunity’. 2016 will be the year that the marketing industry finally starts harnessing the vast reservoirs of data generated each second, and exploiting them to really learn about their individual customers. Marketing campaigns will be better targeted, and customers better serviced.
Historically, audience analysis focused solely on demographics. Then retrospective behaviours started being tracked, as data exchange allowed brands to follow their customers’ decisions. But a thorough understanding of a customer’s nuanced passions and aspirations was missing; we could predict what a customer was likely to frequently purchase, but it was impossible to foresee what they were aspiring to buy.
The main beneficiaries of exchange data have typically been large-scale retailers that can build up enormous amounts of data through a high volume of customer transactions.
However, most brands suffer from the ‘long tail’ conundrum: how can they build profiles for their customers when they don’t enjoy the same degree of customer loyalty or the same volume of transactions?
Customers are increasingly moving from the shop floor to the digital sphere – and the traces they now leave are providing brands with more insight than ever.
This year ecommerce outstripped retail sales on Black Friday for the first time; according to PCA Predict and Springboard, online transactions increased by 16 per cent while footfall in-store fell by 7 per cent, compared to last year. Whist this was due to a myriad of factors, it demonstrates how much customers have changed. Customers are now always connected, whether it be browsing or engaging through social media, and the digital footprint they leave behind is a massive pool of data that marketers can excavate.
For marketers, the real potential lies in the blending of different datasets.
Combining social media data, market data and customer data tells a much more complex ‘digital story’ than exchange data does alone, painting a fuller and more nuanced picture of individual consumers.
An overdependence on behavioural data has turned consumers into creatures of habit, but marketers should recognise that this is not the full picture. Humans are aspirational and multifaceted; customer insight should therefore be derived from a combination of equally rich datasets.
From their complex digital footprints, marketers can see the brands customers engage with, the influencers and personalities they admire, their hopes and their aspirations.
Suddenly, the concept of real predictive analytics is on the horizon. Through this deep understanding of customers, there is the potential to know what they will like before they do themselves. Gone will be the days of looking in the rear-view mirror of past behaviours, which are often instantly redundant.
With this understanding, brands can now reach out beyond their existing customer base. By using external data, aggregates of market activity and social media activity, big data solutions can give valuable insights into what your competitor’s customers want, providing brands with the opportunity to acquire new customers at scale and with ease.
Marketing lives or dies depending on its understanding of customers, and this new nexus of data has the potential to give the industry new life. It has the revitalising power to define marketing in 2016 and into the future.
By Clive Humby, Chief Data Scientist at Starcount.
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