Uncovering the most valuable audience segments has been a priority (and a challenge) for global brands for decades. It’s no secret that certain groups of people can be more valuable to a brand than others. The old “80/20 rule” is commonly believed to be true, but rarely is it accurately quantified – especially in eCommerce sales. So just how much of a difference do these priority customers make to the success of a brand in today’s omni-channel world?
According to a 2015 research report from RJ Metrics, the top 1% of eCommerce customers are spending 18x more than the average customer. EIGHTEEN TIMES MORE! That’s incredible – and it makes sense too. These One-Percenters have developed a certain affinity for their brand of choice and, due to a number of varying factors, they’re comfortable with the digital experience they’re having and keep coming back for more, at least for now.
The last best experience becomes the new norm
Complacency is a trap; once a consumer enters the high-value segment group, they’re certainly not guaranteed to stay there for long. The now infamous words spoken by IBM’s former Global Business Services leader, Bridget van Kranlingen hold true now, more than ever:
“The last best experience that anyone has anywhere becomes the minimum expectation for the experience they want everywhere.”
Despite the recent strong growth in eCommerce sales, companies like Walmart, Best Buy, and Target – who are in the midst of a seemingly never-ending battle for 2nd place (thanks, Amazon) – should have this quote pinned on every bulletin board they own.
Delivering the best experience starts with understanding the user – not as a small part of a larger group, but as an individual – as a human. In this increasingly complex world of never-ending customer data, determining which figures to analyze and how to leverage them is a challenge that brands are racing to crack.
The DMP solution
While most brands are just now laying the foundation for optimizing the digital customer experience, some are far ahead of others. Walmart, for example, has doubled-down on the need to leverage their customer data to improve the digital shopping experience. Based on their most recent earnings report – which showed impressive growth to their online sales – it looks like they’re starting to see a return on their investment.
With the rise of data-management-platforms (DMPs) within the retail space, the brands who have invested in one (or several of them) are off to a good start – they’re centralizing their user-data and storing it in a way that leads to seemingly easy activation across channels – but they should be doing more, and they should be doing it faster.
In the 2016 CX Impact Report, a staggering 89% of eCommerce customers stated they would stop doing business with a company if they were unsatisfied with the experience they received. This leaves a very small window for brands to engage their customers in a relevant, satisfying manner – which means companies should be focusing on understanding the customer today, in order to personalize their experience tomorrow.
According to a February 2017 report from Adobe Digital Insights, roughly one-third of internet users under 50 said they like personalized ads, but nearly as many said they weren’t good enough. Fortunately for the brands out there, the technology exists to make better use of their most valuable resource: data.
A DMP, when used properly, enables brands to identify previously unattainable, high-value customer segments – some of the market’s providers (Oracle BlueKai, Cxense, Adobe Audience Manager) even allow for it in real-time. Once these groups have been uncovered, the ability to reach these people is presented through the use of intelligent, personalized communications across devices, for the duration of the customer journey. If executed effectively, this approach to engagement can boost sales by 15-20% and significantly shorten the customer path-to-purchase.
All that being said, it seems clear that brands are struggling to master that crucial step of effective activation – whether it’s due to an incomplete picture of the customer, the content, or the context – or it could be something even more simple than that: they’re just not taking action fast enough.
Real-time actionability is mandatory
There is a window that brands have to connect with their customers at the moments that matter the most, and it’s nearly impossible to do without a DMP that operates in true real-time.
Now, let’s think back to the One Percenters. With the personal data these brands have stored at their disposal, shouldn’t this uber valuable group of consumers be entitled to a more relevant, more convenient “red-carpet” experience?
With the advancements in automation & machine learning, brands need to embrace real-time segmentation to capitalize on the ever-fluid MVP customer segment. Just because John Smith is in the high-value segment on Friday, doesn’t mean he’ll still be there come Monday.
The more insights a brand collects, the more likely they are to pinpoint certain behavioral patterns that, when combined with other data sources, can paint an accurate picture that predicts when, where, and how these consumers will be making their next purchase.
For example, many individuals have financial obligations lumped into a certain time of the month – meaning, if their occupation follows the standard bi-weekly pay schedule, it's likely that they're more inclined to make an impulse-purchase in the days that follow receiving their more disposable paycheck. This is the time to strike!
Unfortunately, that window doesn't stay open forever – but with the right data, and the right technical execution – brands have the ability to generate an automated process that puts the perfect products, in front of the perfect people, at the perfect time.