Are your brands’ marketing messages relevant to your customers and prospects? In reality, how many marketers can describe each of their customers’ affinity to their brand, know their customers’ propensity to buy and understand their customers’ ability to afford a product or service over time?
Back in the day, direct marketers relied on RFM – recency, frequency, and monetary value – to gauge the likelihood of a customer’s next purchase. Then, a host of new data sources, advanced analytic techniques and massive data warehousing capacity came along to synthesize more data faster. The result? A series of models to better predict who, when, how much and how often customers and prospects would buy.
Customer relationship management continues to promise increased lifetime value, higher customer satisfaction and improved marketing return on investment. But the truth of the matter is that marketers are drowning in data and are impeded by legacy systems and functional silos that inhibit them from being relevant to customers.
What’s more, today’s consumers are increasingly numb to marketing hype. What’s the antidote? Knowing customers individually so that a relevant dialogue between marketer and customer can begin and continue.
While marketers have traditionally used four categories of data – demographic, geographic, attitudinal and behavioral – to achieve customer insight, a fifth, very important dimension has emerged. This dimension is called Economic Insight.
Unlocking Economic Insight
What is economic insight and what benefit does it bring to sophisticated direct marketers? EI provides a new, expanded view of customers based on proprietary consumer wealth information and advanced modeling. EI helps leading marketers understand how capacity to spend and attitudes about money motivate their customers and impact their responsiveness to a given offer. The truth is money is one of the most important things in people’s lives, so by adding Economic Insight to a company’s customer database, marketers can gain a 360-degree view of their customers.
It is Economic Insight that strengthens the four traditional categories of consumer understanding. More specifically, EI supports the demographic understanding of consumers because after all, a household’s income isn’t really important – it’s the discretionary spending potential of a household that really influences their behavior. EI strengthens geographic data by helping to differentiate markets that may have similar home values, but vastly different cost of living factors. Under an attitudinal lens, EI helps reveal consumers’ beliefs about money, which have a strong command over how they spend. EI also enforces behavioral and transactional data – it is important to know the size of a consumer’s wallet to have a complete understanding of how much more they might be able to spend on your brand.
In its totality, EI helps marketers better describe individual consumers and therefore predict their future spending behaviors and tailor relevant messages.
What does EI mean for a company selling cars, hotel rooms, clothing, and other consumer goods and services?
Consider, for example, the automotive industry. Auto manufacturers have historically relied heavily on general advertising to create an allure for a brand in the general media – to attract consumers with the “right” attitudes and in the “right” life stage. More recently, however, spending has shifted from general to direct and interactive marketing, providing auto marketers with more measurable results and greater return on investment. Economic Insight has been applied as a key driver for describing and targeting customers and prospects, who have the desire and the capacity to purchase a particular brand or model with great success.
Retailers and catalogers can also benefit from Economic Insight to help find and communicate with consumers who warrant special offers or membership in rewards or loyalty programs. At the same time, travel companies can use Economic Insight to upsell rooms, packages or timeshares to those most likely to purchase them.
Only with EI can marketers answer such mission-critical questions as: “Does Ms. Jones have the money? Does she like my brand? Will she spend money in my category over the next several months?”
At the end of the day, Economic Insight impacts direct marketing strategies and tactics, allowing for more accurate targeting, more compelling offers, and a more powerful and personal connection to a company’s brand. In a word: Relevance