Bombarded by marketing messages, consumers are looking for more relevant and meaningful dialog than what traditional segment-based communication strategies have been able to provide. They are looking for more relevance, more intimacy, more personalized experiences — what’s known as “one-to-one marketing.”
One-to-one marketing is not a new concept. It was initially coined by Don Peppers and Martha Rogers back in 1993 in their seminal book The One to One Future. That “future” Peppers and Rogers laid out is actually here — now. Advances in customer data management and media buying technology is enabling savvy marketers to move beyond personas to target the exact people they want. We now call it “people-based marketing.”
Much like “one-to-one marketing,” people-based marketing has been used for years by large well-known brands to grow their business and optimize marketing spend. The exciting news for community banks and credit unions is that advances in media technology and data analytics have brought people-based marketing within reach to all but the very smallest organizations.
Putting Data at The Center of Your Plan
Customer data is the starting point. Bringing customer- and transactional data together helps define what your best, most profitable relationships look like. Unfortunately, this exercise is often either overlooked, ignored or dismissed as “impossible” (more on that in a minute). If most financial marketers were really honest, they’d have to confess that they treat all customers and prospects equally.
Reality Check: You can’t define your ideal target market without first identifying who your best customers are.
This is why it is so important to leverage your existing customer data. It allows you to pinpoint the characteristics and product composition of customers that are most attractive. You can retrace the path they followed — the customer journey — to see how their relationship with you has evolved over time. These insights help you define precisely who your new customers should be.
But even financial marketers who agree with this theory in principle argue that it’s too difficult to apply in practice. “Our customer data is scattered all over the institution,” they gripe. “How can I identify our most profitable customers when I have no idea what their path-to-purchase was?” Don’t worry, you’re not alone.
According to a survey from the Digital Banking Report, financial marketers highlighted data analytics and data availability as their top two challenges. These hurdles then spill over and directly impact the next two top issues: marketing automation/personalization, and marketing performance/ROI. All these challenges are deeply interlinked.
Once you’ve defined the profile(s) of who you want as your “next best customer,” how do you go about finding them? This is where people-based marketing is really different from traditional marketing. When focused on specific high-value prospects, marketers can look at all media together and determine whether or not combinations of channels are effective. You are able reach the customers you want on the devices they are using at the exact time they are using them. It takes a lot of data and technology — all of which is readily available today — so this isn’t science fiction.
It’s important to remember that “‘Perfect’ is the Enemy of Good.” No one wants their data to be a mess, but the reality for most is that it’s often incomplete, difficult to obtain and/or unverified. The more information and insight you have, the better. But don’t waste time trying to have it all before getting started.
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Execute Addressable Media
The media world has come a long way in the last few years. Just think, not long ago, Nielsen would ask consumers to fill out a paper diary telling them what TV or radio stations they tuned into. Today, thanks to IP addresses and set-top boxes, media providers know exactly which media channels have people’s attention and for how long.
Much of today’s media is now addressable and growing every day. These include everything from programmatic display advertising, lookalike targeting and retargeting campaigns to search engine marketing, paid social, and even addressable connected televisions. Of course you shouldn’t forget about email and direct mail either.
- Programmatic Display – Individuals are associated with a digital fingerprint — their IP address — for each device they use. Programmatic media buying allows advertisers to provide a list of specific people they want to reach and have specific ads or offers delivered to specific people when they are actually using their digital devices.
- Paid Social – Most social media platforms — particularly Facebook and LinkedIn — have gathered a large amount of useful information about each of their users, making it possible to link a person’s name with an IP address and digital device. Advertisers are able to target specific people, often at the exact time a life event or other similar trigger occurs.
- Direct Mail – Direct mail has (of course) always been addressable. But you can now capture online interest and intent data to send relevant direct mail that activates buying decisions at home. Imagine someone visiting a specific landing page on your website and then dynamically mailing them a specific offer that is linked to that page to drive conversions.
- Addressable TV – Provides the ability to serve targeted ads to specific households via cable, satellite or set-up boxes. There are still some limitations in terms of reach and household data availability, but those are rapidly being overcome.
- Connected TV – Provides the ability to serve targeted ads to specific households via smart TVs and streaming devices. However, connected TV buys require some degree of diligence because the advertiser or media firm needs to interface with a wider tech ecosystem such as streaming device manufacturers, smart TV makers, content aggregators, programmatic ad firms and broadcast networks.
Most marketers don’t realize how powerful the television channel has become now that it offers individual targeting capability. And yet this is arguably the most exciting emerging opportunity in addressable media. More than half the US population already is using a connected television, so marketers can now target TV ads all the way down to the individual household level.
The implications for financial marketers are massive. Once you have identified the specific people you want to reach, instead of buying “reach and frequency” in traditional media channels (the good old “spray and pray” approach), you can buy exposure to your specific target audience segment — the right message for the right person at the right time in the right channel. Advertisers can combine these addressable media channels together with their traditional media campaigns to improve targeting with laser-guided precision to increase their marketing ROI.
- Customer Segmentation Models In Banking Are Broken
- 94% of Banking Firms Can’t Deliver on ‘Personalization Promise’
- Personalization: Moving From Optional to Necessity in Banking
Getting Your People-Based Marketing Off The Ground
Marketers who leverage their customer data have a distinct advantage over those who don’t. With people-based marketing, you can:
- Attract highly profitable new customers
- Focus media plans on the right people and channels, eliminating wasted ad spend
- Know who you are marketing to and send messages that are more timely and relevant, driving up response rates
- Run aggressive promotions that only non-customers can see, without upsetting your existing customer base
- Measure campaign success in terms of revenue, not clicks, impressions or redemption codes
Now your next question probably is, “How do I get started?” The good news is that it’s pretty straight forward.
1. Get your arms around your customer data. It’s your customer data that unlocks the ability to execute people-based marketing. Work with your internal or external data scientist to identify who your best customers are and how they prefer to do their banking with you. Then, integrate third-party data to create rich customer profiles, uncover actionable insights and refine marketing offers and messages. See how they consume media to learn about and buy financial services. You can even calculate lifetime value (LTV) of your best customers to figure out how much you have been, and should be, spending to acquire more of them. If you don’t have the resources to help you with this, you may want to consider finding a marketing partner to jump start your analysis.
2. Build and execute a targeted media plan. Once you’ve identified your best customers and people who look like them, you can start building an integrated media plan to target them across multiple channels and devices.
3. Measure results and refine your approach. You can’t improve what you can’t measure. With people-based marketing, you’ll be able to quickly test, learn and adjust to optimize your marketing spend while the campaign is still running. You can measure the cost, results, cost per new household acquisition and ROI of the marketing program by linking all spend back to customers and revenue. Your finance team will be your new best friends!
Lane Yard is Vice President of Business Development, Financial Services at Target Data, a marketing performance agency specializing in planning, executing and measuring people-based marketing strategies.