Tag Archives: Big data

Aardvark Marketing Consultants | The evolution of marketing segmentation

The evolution of marketing segmentation

The evolution of marketing segmentation

We’re in a golden age of marketing segmentation and automation. Marketers are benefiting from being able to personalise marketing messages using automation systems that segment us according to the choices we make, what we do, what we view, who we talk to and what we spend.

Martin Hayward of Hayward Strategy and Futures recently wrote an interesting article about marketing segmentation through the ages. His historical analysis of how marketers have changed their segmentation techniques makes interesting reading:

1. You are what you earn – still used extensively today, this model grouped consumers by social class. This model assumes that class, employment and consumer spending power were related. For example, the professional classes include lawyers, doctors and accountants could be assumed to have different lifestyles and disposable income from tradesmen including plumbers and electricians.

2. You are where you live – again, still of use today, especially for direct mail campaigns, this model makes assumptions about the relative affluence and lifestyle of a consumer based on their specific postcode.

3. You are what you say you are – this was popular in the 1980’s era when marketers became very interested in responding to consumers based upon their responses to lifestyle preferences and choices. This had limited value due to the paucity and inferior quality of the available data.

4. You are what you do – the emergence of Big Data led this revolution which has been championed by supermarkets and their loyalty cards. The collection of a huge amount of data about our spending habits has enabled a more targeted marketing approach. The data revolution, together with the growth of social media and pay per click advertising means marketing has never been more laser-like in its ability to respond to our behaviour online, as evidenced by Facebook, Google and Amazon.

Martin’s prediction for the next phase of segmentation is “you are what you choose to share”. He believes this will be a logical step for consumers as we come to appreciate the extent to which we share our personal details and make a concerted effort to control and regulate the data we allow organisations to capture.

So, apart from being a bit of fun for older marketers like myself to appreciate, what would be a useful take-away from this model for a business and the marketing strategy to adopt?

Firstly, I would argue strongly that any way a business can define their ideal customer is valuable information. I spend a lot of time with my clients helping them to research and refine their ideal and we still use size of business and geographical location as a part of that process. The ‘big brother’ world of web tracking and social media allows us further insight about on our prospects, which add more colour and detail to our picture.

Secondly, if we know what brands a person buys, who they associate with, and what they are interested in watching or doing, we can tailor messages that resonate with their world. Over time, tailored marketing gives a better return on investment as we focus on the issues that matter to them. Understanding what issues excite them, what tone of voice we should use and when we should talk to them etc allows us to build stronger, more lasting relationships with potential customers. In short, we can become better at establishing trust.

Thirdly, business owners need to keep an eye on the future trends that will change the way we do business. The era of permission based marketing is fast approaching and business needs to be aware of how both existing and potential customers could react to the use of their data. One of the benefits of using marketing automation is it allows marketing to be permissions based. Customers need to behave in a certain way before we send them more information, and they can choose whether to receive it. In the future, customers may be warier of their behaviour and more reluctant to share information than before. Marketing content will need to be more relevant to the recipient than ever before if consumers exercise more discernment in their choices. Are you ready?

Gill

If you’d like a confidential discussion about achieving more bang for your marketing buck, contact us on 0121 222 5743 or email us here

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Aardvark Marketing | Big data

Big data – what should the average business know?

Big data – what should the average business know?

Analytics and Big Data – the terms are out there and run off the tongues of techno-geeks and many consultants very easily, but what are they and should the average small business be worrying about them?
Big Data is pretty well what it says on the tin – data and a lot of it.  Increasingly there are things around the house and office that generate big data – energy meters are a particularly good example.  However every time you access the internet and use something like Google or try booking a hotel, order a book off Amazon or download one onto your Kindle, you are creating data that is captured in one or more of the Big Data warehouses out there.  Your own website will also capture data, but I suspect that for most of us, the traffic will not be enough to call it Big.
Analytics is the term used to describe how that Big Data is used and interpreted, and has grown out of a number of disciplines including statistics, computer science, operational research, maths and heuristic development.  People might try to sell you analytics, but in many cases you are just getting some data presentation and a bit of statistical analysis, not the full fat Analytics that are helping corporations and Government organisations to sell you things.  You need a lot of traffic and a good dollop of cookies on your website to allow the sophisticated analysis and action that the big sites use.
For a small business, particularly one working with or selling to the public, you will generate data, and depending on your reach and your customer numbers, you may start to think of it as big.  For the most part, you can analyse that data using Excel yourself, because Big Data is also real time and really big.
To put this in context, I used to work a lot with the annual data set of all qualifications being studied at FE Colleges in England.  At a leading edge Analytics conference, I discussed it with a big data/analytics person, and she said that it was too old, too static (so not real time) and too small at a mere 15 million entries to really be considered alongside the work presented at that conference.  The analysis I did could not influence or change the behaviour of the data items (students) either.  That day they had the energy companies talking about smart meters and instant consumption data, and Hotels.com and booking data, and how these could affect power generation or inclinations to take a short break.  I felt very small and very passé.
I have kept up with the debate of course (despite continuing to feel small and a bit passé).  The next big thing in analytics is going to be text interpretation so that analytics results can predict the future and not just project the past.  It is not something I will ever use in my work however I will be looking out for evidence of it in my interactions with the big e-commerce sites and Google – and looking for a way to prove them wrong too!
Jane
Jane Holland is an Associate of MRE, a community interest company (CIC) offering ethical business support, advice, development and practical services in starting, running and building their business.
Jane is our guest blogger for November

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Aardvark Marketing | 9/10 consumers don;t understand

9/10 consumers don’t understand

9/10 consumers don’t understand

Consumers are worried about the collection and use of their personal data by business. That’s confirmed by the latest Chartered Institute of Marketing (CIM) survey* of 2,245 consumers when they were asked recently about their attitudes to data use by businesses. They ranged across all genders, ages, incomes and geographical locations in the UK.
57% consumers questioned whether the organisations using their data were using it responsibly, and 40% think that the information they gave would be passed onto others without their consent. The public is particularly concerned and uncomfortable providing any information that’s taken from their social media platforms (68%,) sharing their real-time location (71%) and over 60% are unhappy about giving out a personal phone number.
Given the number of high profile cases featured in our media it’s no wonder we’re cautious.  As well as making use of our data, giving it to any business or charitable organisation also provides an opportunity for hackers to get hold of our details. Chris Daly, Chief Executive of the Chartered Institute of Marketing commented on the survey “people are nervous about sharing personal data-fears of data breaches and misuse has them on high alert. “
The research found that the vast majority (92%) of consumers do not fully understand how organisations use their personal information and data. One third (31%) of consumers, meanwhile, said they had no idea about how or where their data is being used.
However, when people were asked about whether they’d be willing to share data when its use was more openly explained, 67% said they would, in fact, feel more willing to provide it.  So there is an opportunity is for marketers to provide greater transparency and build trust with the public about data use. Clear and simple explanations on websites and other marketing materials about the use of data should be the norm rather than the exception. T&C’s need to be kept as easy for a layman to understand as possible, should not be hidden away and it should be easy to understand what a tickbox actually means.

The study then went on to compare attitudes towards personal data use amongst the marketing professionals themselves. 500 marketers were asked about the use by brands of their own personal data and the majority (68%) were themselves wary about sharing. In part this is explained because they are “too aware” of how the information they provided would go on to be exploited by brands and organisations.
The success of organisations as Google, Uber and Netflix, who increasingly build their business strategies around the collection, use and insights acquired from large customer databases, has encouraged the industry to follow suit. The business world is full of examples and case studies where the use of the ‘Big Data’ has driven sales growth.  However, many other organisations are not yet prepared for using the data in terms of putting in place the key systems, processes and knowledge they need. In doing so they are putting their business at risk of significant reputational damage, devaluing their brands and damaging, perhaps permanently, customer trust.
It’s vital that marketers themselves fully understand the laws and how to implement best practice around using personal data. We need to ensure that our voices are heard loud and clear within our organisations about keeping the way we make use of such data really transparent with our customers. Chris Daly concludes “The solution is clear, marketers need to brush up on the rules, demonstrate clearly the value-add personal data offers in delivering a more personalised experience and ultimately reduce the fear by being open throughout the process”.

If you would like a confidential chat about how to use data responsibly, follow best practice and build real trust with your customers, give us a call on 0121 222 5743.

* Chartered Institute of Marketing, survey “Whose Data is it anyway?” September 2016.

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