Today we are going to start a new case study example on YOU CANalytics. In this case study example, we will examine different facets of marketing analytics and customer relationship management (CRM). We will use the example of online retail to explore more about marketing analytics – an area of huge interest. However, the learning from this case could be extended to many other industries.
As a part of this series for marketing analytics, we will talk about identifying opportunities among the existing customer base for cross/up sell. We will design experiments and A/B testing schemes to learn about managing campaigns. We will also explore other scientific ways to learn more about the customer for organizations to strengthen their business relationship with their customer base. But before we start we need to understand a bit more about the science of..
Incentives and Influence
Social Behavior & Marketing Analytics – by Roopam
OK, in this section of the article I have a task for you. You want people to cut down on their electricity consumption by switching from air conditioners to ceiling fans. I have listed down a set of reasons you could offer to them through advertisements. Arrange the following reasons in order of their influence on most people to cut down on energy consumption.
- Benefit to Society – share the saved power with deprived sections of the society
- Save Money – cut down on electricity bill
- Follow Others – everyone else is doing it and so should you
- Protect Environment – reduce the burden of power generation on the environment
Have you taken a stab at the task? Then read ahead!
The above question is a part of research work carried out by Dr. Robert Cialdini, author of international best-selling book ‘Influence: The Psychology of Persuasion‘. He did a survey and asked people the same question about what will motivate them among the above factors to save electricity. The following is the result from the telephonic survey:
‘Protect Environment’ was ranked on the top followed by ‘Benefit to Society‘ and ‘Save Money‘. This leaves ‘Follow Others‘ at the bottom of the list to influence people to reduce their electricity consumption. In a survey, you capture the order of responders’ aspirations. The results from the survey carried out by Dr. Cialdini make sense since who wants to follow the herd. We are all free thinking creatures, aren’t we? But the question is whether people behave the way they think.
To test whether people’s money is where their mouth is, Dr. Cialdini did a set of experiments. He placed a message on the doorknobs of people’s houses with either one of the four reasons to save electricity. Then he measured the electricity consumption patterns for all these people. The results will surprise you for sure. The group that received ‘Follow others‘ message outperforms every other group by a huge and significant margin for reduced consumption of electricity.
The roots for the success of ‘Follow Others‘ strategy are in evolution. From the evolutionary standpoint, for species ‘Follow Others‘ is a far more superior strategy for survival than any other. Imagine a prehistoric human in a dilemma to choose one of the two roads in front of him: one the road well traveled and safe, and other with little information about it. There is high risk on the road less traveled, and risk taking is an aberrant behavior from the evolutionary point of view.
If you still have doubts about the results from Dr. Cialdini’s research and the evolutionary argument, try to fight the temptation of looking in the same direction where a group of people staring at some incident on the street.
You like it or not but humans involuntarily behave like other similar humans around them. We all follow an involuntary pattern and this pattern detection is precisely the idea behind marketing analytics. If your next door neighbor buys a new car you are immediately tempted to buy a new car. You may not believe how we live our lives around these constant involuntary temptations and mostly succumb to them. The task for marketing analytics is to identify groups of people similar in their attributes to learn more about them. This method is also referred to as look-alike-modeling. This helps businesses to devise a sound marketing strategy for different groups of people based on their needs and consumption pattern.
To get a quick feel for workings of marketing analytics, consider the following schematic. You start with the unexplored customer portfolio and then using data mining and advanced statistical tools try to identify hidden but interesting patterns in customer spends behavior. Eventually, you superimpose business knowledge and rules on top of this classified portfolio to formulate sound business & marketing strategy for business growth.
Marketing Analytics Modeling: Schematic by Roopam
We will get a better understanding of the above process in the following case study.
Case Study Example – Marketing Analytics
You have recently joined in as the chief analytics officer & business strategy head at an online shopping store called DresSMart Inc. that specializes in apparel and clothing. One day you had the chief marketing officer of the company come rushing to you office looking unusually worried . The board of directors has given him hefty targets for sales and slashed his marketing budgets into half at the same time. You immediately identify that you are dealing with a common business problem of improving business revenue with reduced cost. You have also realized that this is a great opportunity for you to establish analytics practices in the company since there is a quick opportunity for you to improve the P&L (income statement).
Additionally, the CMO informed you that last year they had carried out marketing campaigns with different offers on the product catalog. A direct mailing product catalog was sent to some hundred thousand customers from the base of over a couple of million customers last year with the response rate of 4.2%. The direct mailers were later followed up with SMS and email messaging.
To explain your strategy to the CMO, you drew a quick and dirty campaign P&L statement on the white board in your office. The following is a version of your drawing
The objective essentially is to maximize cumulative value generated by customers while minimizing total mailer cost. You explained that the analysis will have an impact on the variable component of the campaign i.e. you will reach out to the right set of customers and generate maximum value. Additional there is an intangible benefit of this exercise i.e. reduced customer dissatisfaction from unsolicited offers.
The CMO left you as a much less worried man than when he entered your office. However, you know that you had your work cut out, and you need to think of the right approach to solve this problem. You are up for the challenge!
Coming back to incentives and influence, you have enough incentives to work on the above problem since it will establish you and your practice in the company. Additionally, you will also influence the right people in the company since you will improve the income statement of the company. The primary task while initiating an analytics project is to clearly define the end goals/objectives of the exercise. The projects that influence the financials of a company goes a long way. Hence it is a best practice to link the end goals/objectives of your projects to the financial influence. See you soon with the next part of this case study example.
“A quiet personality sure isn’t what you need to attract attention”
Bill Budge, video game programmer & designer
What are brand personalities?
A brand is a type of product manufactured by a particular company under a particular name. Carefully chosen logos, slogans, colours, trademarks, design, products and symbols all help to build a brand. But what about personality? People love to give human traits to non-human beings – we all know the hare is arrogant, the tortoise is humble and that computers think. Brands are no exception; they are given human traits and a personality.
According to psychologist Carl Jung, twelve universal characters exist in all our unconscious minds. Like so many other psychological theories, Jung’s ideas have been developed into the world of business and marketing, leading to the idea that there are twelve brand archetypes – that is, a brand’s personality can be one of twelve possible characters.
Each character comes with a set of distinctive traits which detail the brand’s personality.
Figure 1: The twelve Brand Archetypes and their descriptive personalities.
It’s easier with an example. Take Apple – forget products and just think about the personality of Apple, the way Apple makes you feel. Apple’s personality is about imagination, innovation, passion, inventiveness and charisma. Apple’s archetype is the Magician. Johnson & Johnson’s personality is about caring, trusting, protecting and being compassionate. Johnson & Johnson’s archetype is the Caregiver. Some brands take more care than others to develop and maintain their brand’s personality. Carol Pearson and Margaret Mark, authors of books on brand archetypes, claim that the most successful brands have clear, consistent and identifiable archetypes.
But why are brand personalities important, and how do they lead to improved success?
Differentiate from the competition
A strong, clear brand personality allows a brand to stand out from competing brands. Take Apple again, for example. Apple make computers. So do hundreds of other brands. But Apple made themselves different; they differentiated from their competition by offering a brand with a creative, innovative, modern, passionate personality. A brand can set itself apart from the competition not in the product or the service it offers, but in its personality, and this can be a key selling feature.
Attract a certain consumer
Offering a certain personality can attract a certain consumer or demographic. Different people like different traits, it’s the exact reason why John’s personality attracts Sam but not Ryan. For some, traits like creativity and imagination attract them, others find rebelliousness and wildness more appealing. Consumers will be drawn to brands that display traits they value, traits they find exciting or traits they wish they had themselves. If your brand personality oozes power, confidence, luxury and hints at elitism (think Rolex), you are going to attract consumers that value, and want to live these traits. If you want to target the eco-friendlies, probably best for the brand personality to focus on innocence, optimism, honesty and genuineness.
Help consumers understand the brand
If your brand personality is consistent and clear, it can help you deliver clear messages about who you are, what you are offering and how you offer it. This means that consumers can understand you better. They understand what to expect from you, in terms of products, practices and services. This leads to better brand awareness.
Help consumers feel connected to the brand
We’ve all met someone with ‘no personality’, and you can’t really connect with them, right? That’s because people connect with personalities, and this is true for people and brands. Having a brand personality provides an opportunity for consumers who value your personality to build a connection with you, to feel like they know you. People are more likely to buy from a brand that they feel they know and trust.
Help consumers feel emotion
A strong brand personality can make a consumer feel. A brand’s personality can make a consumer feel safe, valued, excited, confident, glamorous, rebellious. And the great thing about people is that they don’t always purchase logically. On many occasions, people purchase because of the way they feel.
Help consumer loyalty
Chances are that if a consumer feels connected to a brand and the brand personality makes them feel something positive, they will be more loyal. After all, a survey of over 24,000 Great British consumers found that 65% say that once they find a brand they like they tend to stick to it.
Figure 2: Popular brands and their archetypes.
Consumers buy into the brand
When people feel connected to a brand, they are likely to buy from that brand, but it’s not just about the product anymore. When they feel they understand and know the brand, when the brand personality is everything they value, everything they wish they could be, they are not just buying for the product. They are buying into the brand. Think of Mercedes-Benz – they have spent years boasting the Ruler archetype – control, leadership, excellence. When people buy a Mercedes, they aren’t just buying a car, they are buying into the brand’s personality – they want to be part of the Mercedes-Benz club.
Your brand personality is what it is perceived to be
With all the benefits of having a strong, clear brand personality, many brands invest much time, money and effort in it. However, what they often forget to do is to check how their brand personality is being perceived by most people. In reality, a brand’s personality is not the one they have created, it is the one they are perceived to have. Best case scenario, these two match, and the brand can reap all of the many benefits. Worst case, there is a mismatch. The brand is trying to give off a certain personality, but it is being perceived as a different personality. This creates problems between the consumer and the brand – the consumer will have expectations about practices, products, price and services that are not being met by the brand. Consumers may start to feel the brand promises things that it doesn’t deliver. The brand may find itself attracting consumers that they weren’t expecting. Consumers may think the brand is pretending to be something it’s not. Imagine for a moment that a new computer brand
comes out and wants the Sage personality – the expert, the professional, the advisor. Even worse, imagine that they strongly believe they do have that personality, and are unaware that the general consumer believes they have the Explorer personality. The consumer is going to have expectations that the brand is not even aware of so is never going to fulfil. The brand is going to offer consumers they are attracting things that they don’t want or care about. If the brand never assesses their perceived personality they will run into trouble, and they may not even know why.
How we help
At Retail Marketing we gather detailed data about brand personality. Through qualitative analysis we can discover how your brand personality is perceived, where your brand fits in with the twelve archetypes and if people feel that your brand delivers according to its personality. Through quantitative analysis, we can discover who is attracted to your brand’s personality and what this means in terms of purchase behaviour.
At Retail Marketing, we help you connect better with your consumers. For more information contact us: email@example.com