Marketers test. Their profession is an iterative cycle of testing and learning. Striving to answer questions like: Who is our target customer? Is it our best customer? Wait… How do we define their best customer? Is it lifetime value? Is it how much money they spent in the last year? Or how many orders did they place? Are these “best” customers profitable? How do we find more profitable customers?
After defining what exactly is “best,” the marketer then needs to build the profile of this customer. The traditional answer is demographic and behavioral in nature – age, sex, marital status, income, race, etc. Digital marketers are defining online behaviors – click traffic, keystroke analysis, etc. Marketers then use this data to test messaging, creative, offers, and segments of the population for effectiveness and ROI.
Needs vs Wants
So with traditional data sources at the ready , marketers look to identify when someone is going through (or about to go through) a “life event.” Why? Because generating demand for your product or service is hard to do. When it comes to life events, it becomes more fundamental because that’s when the need is there. From a marketer’s perspective, this is when needs supersede wants. The most commonly targeted life events are when someone is expecting a baby, a high school/college graduation, a marriage/divorce or, the holy grail of life events – moving.
Moving – the Holy Grail of Live Event Marketing
Think about your daily routine – where you get gas, coffee, groceries, bank, etc. You have a routine, a system from which you seldom deviate. Then along comes a “life event” and your needs change.
Now consider the impact of a move and how your entire routine will be upended. The farther away you move, the more your routine is disrupted. Moving a few miles away may not change where you shop for groceries or bank, or even get gas or coffee. But when the distance is greater, then every brand decision you make is in flux.
The typical consumer is loyal to a brand based on convenience, quality, or price. When you move farther away, all the “loyal” brands are exposed and all the “competitor” brands have a window of opportunity to win your business. This is when marketers vie for your attention.
How is a marketer to stand out? First of all, they want to know ASAP when someone is considering a move. If their competitors are looking at the same data as they are then they have to be better at interpreting the data and executing on the insights. But what if more information on the consumer was available?
Non-traditional Data Gives Marketers An Advantage
With alternative data, you can get answers to questions that are elusive to traditional sources. Let’s take residency as an example. How long has the consumer lived in their current residence? How often do they move? Do they own or rent? Even if they rent, you can tell what direction they are headed on the “property ladder” – that is comparing the property value against the value of their prior residence, as well as comparing to the median property values on the block, tract, and county.
From a recent survey conducted by LexisNexis Risk Solutions, 52% of financial marketers say that getting information on prospects is a challenge. I’ve worked at a few data companies and I understand these challenges, too. Traditional marketing data provides insight on consumers that all marketers utilize. Non-traditional data provides expanded insights and powers more robust analytic engagements.
Alternative data can also be predictive. We have built models that predict the likelihood of someone moving and also the propensity of having higher lifetime value as well).
For financial marketers, alternative data sources allow marketers access in pre-screen and invitation-to-apply campaigns to reach credit-worthy, traditionally unscorable and credit invisible, consumers. But it can also allow for profiling, segmenting and other marketing analysis. Providing keener insights into customers and therefore prospects.
Non-traditional data can have great strategic and tactical value and would like to hear from you all on the types of data you consider non-traditional and sharing any of your success stories. I’m happy to do the same.
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About the author: John has a dual role consulting on using alternative data for marketing data analytics and consumer credit risk decisioning at LexisNexis. These roles intersect at many points throughout the customer lifecycle starting with marketing strategy (acquisition, cross-sell/upsell, customer service and retention) through credit underwriting and account management. The goal is to help companies increase organizational efficiencies and effectiveness using a pragmatic, empirical data-driven approach that allows for measuring, refining, and scaling customer insights across the enterprise.