Data Drives Relevance, Behavioral Data Drives Performance!

In 2001, when I was early in my career as an email marketer, I had a meaningful dialogue with a database marketing expert. This gentleman, let’s call him Ted, shared that there are three basic ways we learn about our customers. We look, ask, or buy. And they follow that order in terms of importance and value.

Data From Looking

Looking at a customer’s behavior across you brand’s various touch points is the one of the most valuable sources of data you have to estimate future buying interests and patterns. There are numerous ways you can gather this data. For example, you can observe a customer’s browsing behaviors through website analytics to gauge their interests, or you can monitor responses to your email campaigns using real-time response data gathered from your email marketing technology. You can (and should) also analyze purchase data and recognize any seasonal trends or spikes (birthdays, holidays, etc.). Behavioral data obtained by “looking” is very powerful, because you get data on what your customers actually do versus what they say they do, which leads us to the next way: asking.

Data From Asking

Supplementing your behavioral data with preference data obtained by asking your customers about their interests is a smart idea. That’s because for all the strengths of “looking,” this method also has some weaknesses. For example, you may see that a customer recently bought some baby clothes, so on the surface, it would seem that following through with a series of offers on new baby merchandise would be the right move. However, it’s also quite likely that this was purchased as a gift for someone else. If you had recently asked them about what products they were interested in, and baby/kids was nowhere on the list, you could pair that data with frequency of purchases from that category to make an assessment on what offers to send in the future. There are a number of ways to “ask” customers to provide this information, such as registration pages, preference centers, or surveys. Of course, you need to gauge how much you ask by the method of collection. Bombarding a customer with 20 questions at registration might be a little overboard for your target customer, but asking a few key questions and then following through with a survey a few weeks later (after they’ve bonded with your brand), might be a better approach.

Data From Buying

The third option is to purchase customer data. It’s fairly easy to buy demographic and psychographic data on your customers from data aggregators like Infogroup or Acxiom. However, there are risks with this method. You need to make sure that you fully understand how the data was collected and how recent it is. The last thing you want to do is to introduce bad data into your customer records. You also need to understand the level of data you can acquire (and use) without freaking out your customers. If they’ve never told you March 1 is their anniversary, and you send them an offer, it might make them confused or suspicious about your brand. Buying data is the most risky method, so make sure you fully understand the potential hazards before you proceed.

Behavioral Data Is King

While all customer data has value and allows the email marketer to be relevant when communicating, the most telling data is the behavior data.

Let me show you what I mean. If you’re a wine merchant, you might ask me if I prefer red or white wine – and my quick response would be red! However, if you monitored my buying behavior, you would notice that I buy white wine two out of three times. This is just one reason why looking is better than asking. Another reason is that your fill rate by asking may be very low. An average preference center has a 2 percent fill rate on any iteratively profiled fields.

Knowing that website, email, and buying behavior are the most important attributes on a consumer, it’s no surprise that shopping cart abandonment, purchase confirmation, win-back campaigns, and newsletters personalized to the consumers’ behaviors are clear outperformers.

Ted was right in 2001 and 2011. Happy Holidays!