As direct marketers, we have become quite sophisticated in how we slice and dice data. We strive to create a higher degree of personalization — the extra step many of us think will improve return on investment — yet response rates continue to decline.
When we rely too heavily on quantitative data to obtain insights into customers, we’re partly to blame for less-than-ideal response rates. We need to know more about what drives customers, what motivates them, how they think and what will make them act.
We need to understand the rational and emotional aspects of our customers to create personalized campaigns that resonate with them.
Consider the typical house file where the top 20 percent contribute 80 percent of sales. You know the customers by name, address and spending habits. But do you understand how and why they arrived there and what decisions they made along the way?
An understanding of our customers’ mindsets can help us develop the ideal positioning for our products and services and increase the number of new customers as well as sales from existing customers.
According to Robbie Blinkoff, an anthropologist with Context-Based Research Group in Baltimore, “The challenge with direct marketing personalization is that it requires highly insightful information, which is increasingly difficult to acquire.” And as many marketers know, this information is nearly impossible to obtain from a database.
One way to gain access to customers’ unarticulated desires and emotional terrain is to spend more time with them, participating in and observing what they do. Participant observation is the equivalent to conducting anthropological fieldwork, and the technique is called “ethnography.” Ethnography brings clients much closer to the experience of their customers, leading to more effective direct marketing.
However, marketers (as opposed to product developers) are only scratching the surface of this new form of research. By starting with ethnography, or by using ethnography more strategically, direct marketers can go beyond decile segmentation. They can get closer to emotional segmentation, which lets us better understand the hooks that truly compel customers.
With the help of ethnography, we can augment our quantitative approach and produce a more personalized program with better copy and stronger offers. Amid declining response rates and mounting consumer skepticism, ethnography holds promise as the key to improving personalization and direct marketing outcomes.