Use CRM Data To Build Relevance -- And Avoid Message Overload
Media is changing, from the way we consume it to the types of parties creating it. As more CPGs invest in building out "owned" media to make the most of their CRM data, the competition for attention is growing. The result is a lot of branded content clutter.
Engaging directly with consumers requires a combination of pushing messages to them while also creating the kind of content that pulls them in. Unfortunately, companies often get that latter bit wrong. Here are a few hints for what to do -- and what not to do -- when it comes to using data to personalize and target content:
Data as personalization engine
A company's database is the gas that fuels its personalization engine. You need to actually use the data to get anywhere.
But personalization doesn't have to begin with one-to-one targeting; while linkage to individual purchase is the holy grail for CPGs, it is also the most elusive. A relevant segmentation can be the first step. By matching a CRM engagement with purchase behavior, strategic tactics can make a tangible impact on a brand's business. Here are a few examples:
Matching coupon redemption behavior to category purchases helps brands optimize offers that drive growth. For example, if a brand knows that a consumer has redeemed a coupon for laundry detergent, it should also aim to understand her total category behavior to confirm whether she is brand loyal or a brand switcher. Offering deeper discounts for consumers who respond to coupons and exhibit loyalty incentives future loyalty.
Demographic information linked with purchase can help marketers to guide consumers through a brand's portfolio over time. This is particularly valuable for time-bound categories, such as baby food as babies only eat it for a short period of time. Combining a baby's age with category spend can help brands estimate how much longer consumer engagement will be viable.
Personalization -- with restraint
A combination of shopper data, media consumption behavior and attitudinal data tells us more than ever before about the path to purchase, but they key is to view it with a consumer lens. When consumers allow brands to track their behavior, they expect them to use it in a respectful and responsible way.
Personalized offers are one way to do this. CRM members are 70% more likely to buy your brand with a coupon. However, they are also more valuable, spending 17% more on your brands than your typical consumer. If brands don't reward the behaviors they seek, those behaviors won't be repeated.
How many times have you signed up for a loyalty program only to immediately start deleting the spammy emails you receive from a brand? Relationship marketing puts power back into the hands of the consumers -- they are actually inviting brands into their conversation. It's important to not take it for granted.
A loyal consumer is as valuable as 12 uncommitted consumers and CRM program members are already more loyal. In fact, they are 36% less likely to leave your brand year on year, and spend 14% more than the rest of your retained shopper base.
While there will always be a balance of acquisition and retention, companies too often measure CRM success through reach rather than loyalty. The goal of good programs is not to increase penetration, but loyalty.
Spread Owned Media Learnings Across the Mix
Good CRM programs create a symbiotic relationship between a brand and consumers. As companies deliver relevance and value, consumers reciprocate with greater engagement, richer data and increased sales of 2% to 5% annually. This fosters the continuous loop of improvement in which data informs more meaningful content and increased sales are re-invested into the program to reward consumers for their loyalty.
In addition to improving communication, learning must be exported. Owned media should inform the mix across paid and earned. Once you understand which messages resonate with key CRM members, targeting criteria can be replicated across media buys to expand reach of effective content beyond the relationship-marketing base.
Barbara Connors is Director, Manufacturer Practice CRM at dunnhumby USA. Follow her on Twitter @cincy_babs.