In today's fragmented media market, the goal of reaching and building meaningful connections with consumers is...
harder than ever. To make this uphill climb a little easier, marketers are collecting vast amounts of data and using marketing analytics tools to gain a better understanding of who their customers are and the kinds of products and services they want.
You have to understand as a marketer that you're going to be forging new relationships. If you're going to be having that conversation you have to have a true partnership.
Sheri Manning, vice president of marketing at the University of Pennsylvania Medical Center
But don't think demographic data alone is sufficient to build useful customer profiles. Speaking at the SAS Premier Business Leadership Series in Orlando, Fla., Paul Lazorisak, vice president of customer marketing at gift basket retailer Harry and David, called demographic information "your grandfather's data." Marketers who are looking to build a more detailed picture of their consumers will have to go much deeper, he said.
Demographic data can lead to generalized sketches of large groups of customers, but Harry and David wanted to understand more about each customer. Getting familiar with the customers meant Harry and David would be able to better optimize and target its advertisements and product promotions, and ultimately improve the bottom line.
Harry and David now track customer purchases on their website, as well as on other sites, which provided the marketing team with the data they needed to build campaigns for specific types of customers. They can see who the customer buys for, what time of year the customer buys and what sorts of products are typically purchased together.
For example, they found a lot of their highest-spending customers only made purchases around the holiday season. These are very valuable customers, but it doesn't make sense to market to them year-round. Optimizing ad campaigns allowed the company to avoid the problem of alienating customers due to poorly timed sales pitches, Lazorisak said.
Using marketing analytics tools in healthcare
A targeted, customer-focused approach to marketing is also growing increasingly important in the healthcare industry, where reform means rewarding, high-quality care. Sheri Manning, vice president of marketing and communications at UPMC Health Plan, the insurance arm of an integrated healthcare network that operates more than 20 hospitals and 400 outpatient facilities, said new payment models that emphasize keeping patients well, rather than treating them only when they get sick, will require healthcare providers to get to know patients better and commit to them.
"You have to understand as a marketer that you're going to be forging new relationships," she said. "If you're going to be having that conversation, you have to have a true partnership."
Organizations can begin the process of building a good relationship with patients -- or consumers -- by collecting data, lots and lots of data, Manning said. For example, UPMC wanted to improve the health of diabetic patients as part of an ongoing quality-improvement initiative. The marketing team had the idea to build profiles of patients with diabetes and create targeted marketing campaigns to help these individuals manage their own health. They had the advantage of having access to every patient's medical claims records and clinical histories.
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After analyzing the data, the health system's marketing team was able to use the usual information, such as whether the patient suffers from diabetes-related health complications. Additionally, doctors could use the system to find out what the patient does for work and what their family situation is like. The depth of information allowed the team to understand all the factors that contribute to patients' adherence -- or lack of adherence -- to treatment plans. Using the SAS Campaign Management tool, the team also designed outreach campaigns targeted to each patient's unique circumstances.
"I don't think anyone will succeed without knowing that [patient]," Manning said. "You're talking about people's health. You're talking about making sure a diabetic is compliant. So you really have to be smart about it."
Less is sometimes more
Andres de Armas, vice president of customer offers and targeting at Bank of America, said the paradigm of contacting as many people with a campaign as possible in hopes of hitting someone who will be persuaded is going away. He said there was a time when the bank's marketing team would include just about every customer when it launched new campaigns. But now, thanks to marketing analytics tools, the team tries to limit the number of customers it contacts with each campaign to make sure messages are only going out to people who might benefit from them.
To accomplish this, the bank collects data on their customers and uses it to determine what types of messages to send to people. For example, a direct mailer advertising home mortgage rates may not be effective when sent to a college student, but an email advertising credit card products might be more appealing.
De Armas cautioned, however, that collecting heaps of data does not automatically improve campaigns. Not all data points will affect a marketing strategy in a meaningful way. De Armas said that when an organization segments its customers so finely that it gets ahead of the marketing strategy, optimization efforts become inefficient.
"When the ability to get that information loaded gives you an insight for the customer, but your decision doesn't change, you're wasting your time," he said.