Successful marketing strategy is based on insight derived from actual customer behavior—your customer data—not intuition or aspiration
An important first step is customer profiling—answering the question of, “who is my customer.” To be effective, however, your customer profiling must be comparative. To understand why, consider my fish story.
I recently spent the day fishing in a neighbor’s pond, catching six largemouth bass and nine bluegills. Apparently, I was doing something right to catch bluegill (even though I had hoped to catch bass), so I began to consider the temperature, the time of day, the areas of the pond I fished in, my bait—all the factors I could think of—so I could remember that those are the things that lead to catching bluegill.
When my neighbor inquired that evening, and I reported my results, he said, “Wow, you were killing it with the bass.” It turns out the pond was stocked with 90% bluegill and 10% bass, so my yield of 40% bass was much higher than their share of the pond population. Some combination of what I was doing was actually helping me to be more successful catching bass.
This story demonstrates the importance of context and comparison against a meaningful reference. So when profiling your customers, it is imperative that you compare the characteristics of your customers to the characteristics of the prospect universe from which you draw your customers. You want to know which characteristics truly differentiate your customers from non-customers as opposed to the characteristics that are simply a reflection of the underlying population.
Consider the following chart that shows the household income distribution of customers and the income distribution of the prospect universe for a specific business.
One way to describe the customers in this example is to say, “Most of my customers have incomes of $50,000 to $150,000,” (the four income ranges with the highest number of customers). While this may be true, the population reflects something similar—most prospects in the prospect universe have incomes of $35,000 to $125,000. So that observation is not particularly helpful. From a targeting perspective, you should be more interested in the characteristics that differentiate customers from the prospect universe—how are the two groups different? In the example above, I would say, “Customers are more likely to have incomes of $100,000 or more compared to the prospect universe, (the income ranges where customers are overrepresented in the prospect universe), and they are significantly more likely to have incomes of $125,000 or more.”
To be clear, I am looking for values where the dark bars (customers) are higher than the light bars (the prospect universe)—and the greater the difference the better. These are values for which customers are overrepresented.
It’s also helpful to note areas of underrepresentation, “Customers are less likely to have incomes less than $75,000 compared to the prospect universe, and significantly less likely to have incomes less than $50,000.” Eliminating this group from your campaign will eliminate waste (prospects with a lower likelihood to become customers).
This leads to an important point: defining the prospect universe. When using targeted media, you want to define the prospect universe as precisely as possible to correspond to qualified prospects. If you’re a bank selling home equity lines of credit, the prospect universe is homeowners within the geographic markets where you operate. If you’re a childcare provider, your prospect universe is households with eligible-aged children, and so on.
While they may not be showing the detail, this is the same exercise that media planners and media reps use when they say, “HGTV programming indexes high against your target audience,” or “core demo.” In other words, your customers would be overrepresented in the HGTV audience compared to other programming.
It’s important to recognize that while comparative profiling provides important insight for effective targeting, it should also inform persona and creative development. Once when meeting with a health care leader and reviewing the results of our analysis of his patients, he stopped me halfway through saying, “Wait a minute. This affects everything. It affects the magazines that should be in our waiting rooms, the television station that should be playing.” I agree. A fact-based understanding of your customers can have implication on every aspect of marketing and the customer experience, not to mention other functions in the organization.
A division of Altair Data, Braintree has over 20 years of healthcare marketing experience that allows it to provide a custom line of data sets, solution suites, and consulting services that solve marketing challenges unique to the healthcare industry.
Portions of this post are excerpted by permission from The Big Miss: Ignoring the Laws and Underlying Forces of Marketing by Jim Alcott, 2017.