Effective Promotions Consider the Shopper’s Perspective

Nov 08, 2004

By John Hennessy

In an article in Target Marketing, co-authors Arthur Einstein and Mark Klein make the case that, when marketing, the customer information that matters most is not demographic or psychographic but behavioral. This helps you determine:

  • Who’s going to buy next;

  • When they will buy;

  • What they will buy;

  • What they may add to their market baskets that they’ve never bought before.

They write of the permanent shift from marketing based on intuition to marketing based on predictive analysis. They characterize this shift as changing the focus from the products you sell to the customers you serve.

The former entails deciding which products to push. The latter, and more challenging approach, involves quantifying and promoting from a customer perspective.

While they make the case that there is a place for both, they note that, “Quantifying and promoting from a customer perspective can be more difficult analytic work, but inevitably yields a greater return on marketing investment.”

Moderator’s Comment: If, as the authors argue, marketing based on shopper behavior gleaned from transaction data
is so much more powerful than product marketing, why aren’t more companies practicing customer marketing?

I practice what the authors preach. Because of that, I know firsthand that putting customer marketing into practice is much harder than accepting the preaching.

The good news is that customers appreciate their preferences being acknowledged. Marketing partners appreciate the ability to execute campaigns based on
specific attributes. What’s missing in the article is any hint of how to efficiently execute and realize all the benefits. Not having a complete blueprint is why some who embrace
the philosophy falter in the execution.

Customers tend to be an unruly lot. They’ll change preferences. They’ll stop spending for no apparent reason. They’ll return just as randomly. They will
often make the exception the rule. Doing a static analysis that places them in a bucket may or may not reflect their current preferences. Doing anything with great frequency requires
resources that could easily exceed the anticipated return.

For customer-based marketing to make business sense for your company, modifications to practices in other functional areas, such as IT, operations and analytics,
need to accompany the changes to your marketing focus.

John Hennessy – Moderator

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