Businesses have never had so much information; yet in many cases they have never had less idea about how to achieve effective customer engagement – digital commerce may be data rich but it is often insight, and invariably, action poor. To date what has been lacking is an understanding of customer motivation and personality: what and when a customer browses or buys is useful, but how much more valuable would it be to understand why?
Taking a business online has been great for sales and for profit margins, but it has also incurred a business cost – channel fragmentation and customer disintermediation. As a result, digital businesses have invested heavily in improving customer engagement; in creating the personal relationship; and transforming the relevance of every interaction. But with how much success when you look at the lack of loyalty and rising cost of customer acquisition?
While businesses can without doubt gain insight from customers’ online behaviour, this information is usually two dimensional focusing on the what and the where. Tracking where a customer came from and how much time was spent on a page provides no real understanding of who that customer is or why they embrace certain behaviours. Effectively, despite the petabytes of data now being collected, we often have little idea about who is buying our product.
It also means the marketing team – and CMO in particular - has limited insight into how and where to prioritise activity and allocate budget. The resulting fragmented, and siloed, marketing strategies see teams pulled from analytics to optimisation, from paid search to email campaigns with customers in the middle of the deluge of irrelevant advertising and messaging.
Behavioural Data Is Not Enough
The difference in how businesses think about their online customers becomes evident when we consider the language marketers typically use in describing them; individuals visiting their stores are referred to as ‘customers’, whilst people who visit their website are ‘visitors’ or ‘users’. Likewise, the metrics marketers use to gauge online success are largely based around function, the cost of (or ROI in) the different communication channels and strategies, and the cost of acquisition.
Currently, the standard approach to big data is to measure the behavioural ‘exhaust’ that people leave behind - what they clicked on and when they did it.
Although this approach can reveal correlations it cannot reveal motivations and thus is difficult to interpret and action. Psychology - the science of human behaviour - helps us understand who is engaging and why.
In a digital environment, where average conversion rates still sit at 2-3% versus 20% in-store, it is clear that understanding where the marketing budget is most effectively allocated remains a significant challenge for marketers.
Critically, though, all this activity is based on anonymous transactions; it has very little to do with the human behind that behaviour, or why that individual is behaving that way. It is clear: how we currently think about customers online is not the same as how we talk about them or think about them offline.
This is not through lack of desire or effort. Customers want to be understood and businesses are doing everything they can to understand them. We can see companies are spending more on insight and engagement but at the same time all the response rates are heading south, so it seems there is a significant ingredient missing in what consumers consider being understood and personalisation to mean. The bottom line is that currently the metrics businesses are using are not enough.
Understanding Customer Motivation & Emotion
So how can businesses evolve from today’s fragmented marketing budget and ad hoc personalisation strategies towards a model that uses actionable insight to deliver measurable ROI? The answer is to understand who is engaging online; and that means moving beyond just behavioural and basic demographics to understanding psychographics.
In order to understand a customer from a psychological perspective, businesses need to understand an individual customer’s personality and the way in which (s)he views the world; these are the key pieces of information that dictate what makes an experience relevant and engaging.
Success in today’s online channels involves understanding a customer’s emotional drivers and being able to use that information to then tell a story that’s relevant to the individual. Although it may sound like a big step it is surprisingly simple and intuitive to understand your customers based on what makes them human. Years of academic research and testing means it is easy to segment customers based on different personality traits, from their openness to new experiences to their preferred type of imagery or emotional language.
It is the ability to tie a deep understanding of these personality drivers with purchase behaviour that fundamentally changes the game. Integrating psychographic profiling with the end-to-end customer experience information – from browsing history to purchase – provides a marketing team with the quantitative certainty required to understand exactly who is buying from them and why.
Embedding psychographic and motivational insights within the existing data layer enables the CMO to take more accurate decisions around marketing strategy and budget allocation, prioritise activity and create actionable plans that deliver measurable return on investment and realise that vision of a truly engaged digital customer base.
By Ed Weatherall, Client Director at VisualDNA.
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