Why marketers are failing to target consumers at key life events.
Big consumer life events can provide marketers with a trigger to acquire and retain customers but brands need to obtain and manage data more effectively.
Although marketers realise the importance of targeting consumers during specific life events, such as moving house, buying a car or having children, many are struggling to do so effectively as they find obtaining and maintaining relevant data a challenge, new research finds.
The study by Royal Mail Data Services of 185 respondents across both business-to-consumer and business-to-business organisations, shows that half of those surveyed see life events as a new sales opportunity, up from 16% in 2014.
However, while 55% say they understand the concept of life event marketing and the fact it triggers consumers to make new purchases or review contracts, their organisation is yet to realise the value of implementing a strategy based on marketing around these events. Only 24% are running a life event targeting campaign and for 21% of respondents the term is entirely new.
“As consumers become less loyal, brands have to work better to understand and predict what is happening to them during their lives,” says Jim Conning, managing director, data services at Royal Mail. “If you are not engaging people at the right time, it is irrelevant and consumers will see that as an annoyance rather than helping them through their lives.”
Seven out of 10 marketers recognise that the most important aspect of a life event for brands is the reason it provides for them to engage with a customer, twice the number of marketers who gave this answer in 2014. Under half (44%) say it also gives them a chance to update contact data, which is up by 50% from last year.
There are challenges and key steps in adopting data-driven marketing, particularly for life event targeting, including the control of data collection, how customer contact data is sourced and the quality of that information.
Conning says: “There’s no point doing great creative, data segmentation, analytics or programmatic marketing unless the base data you have is as clean and as high-quality as you can make it because all the smart stuff won’t make a difference if the base you are working on isn’t accurate.”
Only three out of 10 companies have a central data management function to ensure data is captured in an actionable, sustainable manner.
The study warns that where customer relationship management (CRM), sales or customer service takes the lead on data collection there is a risk that the details collected will only reflect the specific needs of those functions and will not include non-customer data or behavioural data rather than transactional information.
The CRM function is responsible for data collection and strategy in 32% of respondents’ companies, IT or information services accounts for 23%, sales 21% and customer service 19%.
Nearly nine out of 10 marketers identify their company website as their primary data collection channel, while only 2% name mobile websites and 30% mobile apps as key data sources. The research finds that a mere 9% of the ecommerce function in businesses is responsible for data strategy and collection.
Getting the right data
Sourcing the right customer data is important for those looking at targeting by life events. The use of first-party data is rising in prominence as 45% of respondents say they only use directly gathered customer data, compared to 39% last year. But half of respondents recognise this only provides a partial view of the customer so they enrich it with additional data from a third party.
The study suggests mapping existing customer data against life event data can help to identify specific purchase triggers, spend patterns and previously unidentifiable acquisition and retention targets.
Marketers also need to be aware of legal requirements and the need to gain consumers’ permission in order to market to them. Marketers will be required to get “unambiguous” consent from consumers before using their data for marketing purposes, under new laws agreed by the European Union at the end of last year.
The study shows that one-quarter of respondents feel they are in a good position for this change since the impact of permission on marketing is well understood in the organisation, and 35% have some understanding, but a third (32%) say there is limited understanding and nearly one in 10 (9%) have no understanding.
“These companies should already know, understand and change to fit those [permission] requirements,” adds Conning. “We have a lot of creative, talented people in marketing but we don’t have many that are educated in how to use data, use technology platforms and [collect data using] the correct permission.”
Story first appeared on the Marketing Week website – https://www.marketingweek.com/2016/03/04/why-marketers-are-failing-to-target-consumers-at-key-life-events/