Demographics don’t change much, but man, when they’re wrong they can cost you a lot of money. That’s why I’m trying to understand why marketers have spent years showing me Spanish language display ads.
I was recently able to take a look at the data two of the largest marketing data providers in the U.S. have on me and I’m listed by several data providers as Hispanic. I’m not—but now I realize I should’ve paid a lot closer attention in my high school Spanish classes! They also think I have one child. Nope, I have two sons (who eat like three). Speaking of eating, for some reason, these large data providers are convinced that I’m into hunting. While I love venison, I have no desire to be an active participant in putting it on my plate. If they banked on having my psychographics right, they certainly fell short!
So I say to marketers who are using this data: If the only way you’re targeting me is via demographic and psychographic data, you’re missing your opportunities with me by a wide margin. And I’m not the only one. Relying solely on this data to try to target your marketing is expensive, inefficient, and very costly in terms of waste and questionable effectiveness. It’s also a leftover from a previous era where this type of data was the best that was available. Not anymore.
Next generation data companies are enabling brands to engage with people exactly when they are shopping to understand their behavior, their desires, and to be able to make the right offer at the right time, in real time.
Making Complex Buying Decisions
In the world of purchases like buying a car, marketers need to understand the deeper consideration required versus that for impulse buys (like shoes). These decisions, what we call major-life purchase decisions (MLP), are complex buying decisions that have a high degree of financial and emotional complexity. Consumers take lots of time researching their decision, both online and offline.
In fact, 88% of car buyers use the Internet to shop, according to the 2016 Car Buyer Journey from Autotrader and Kelley Blue Book. These shoppers are evaluating cost, quality, and safety with the end goal of securing a vehicle that they feel good about emotionally and financially.
In a time when 80% of customers say the experience a company provides is as important as its products and services, the best product doesn’t always win—the best marketers do. An automotive marketing strategy needs to encompass a wider view of the customer, which include understanding who is disengaged, interested, serious or has already purchased.
Creating High Customer Lifetime Value
The MLP marketer’s job has evolved to meet the auto consumers when and how they want. And with consumer expectations hitting an all-time high, shoppers are more than willing to take their spend elsewhere. Meeting these rising expectations requires new capabilities. A simple, yet effective, a framework will help ensure high customer lifetime value for your business. This includes:
- Targeting people, not devices or opaque audiences. Access to strong identity resolution is a must.
- Concentrating on consumer behaviors as signals of where consumers are in their buying process. Demographics can help also but not nearly as much.
- Making the shopping process helpful to the customer—not spammy, annoying, or intrusive.
- Keeping customers and your business safe, avoiding risky or non-compliant interactions
Developing a Deeper Understanding
Marketers need to develop an understanding of how and where consumers are navigating these complex purchase processes. Car buyers spend 59% of their time online, according to the 2016 Car Buyer Journey. While they use a variety of sites to shop, more of them use third-party sites than any other site, and 56% of car buyers say that third-party sites are the most useful sites, according to the 2016 Car Buyer Journey. Third-party sites, manufacturer sites, dealer sites, and search engines complement each other during the shopping process. Therefore, automotive marketers need to have a broad yet integrated marketing strategy, including a strong presence in the online inventory marketplace, to effectively reach and influence shoppers wherever they are shopping online.
As an MLP industry, auto is unique: shopping journeys can be long (research indicating up to 3 months), consumers are picky (consider how many makes and models are available), and not every consumer is a fit or qualified for a particular vehicle (think luxury cars).
Demographic and psychographic data is important, but the clearest and most concise indicator of being in-market is actual behavior. Ultimately, access to, and effective use of this data is the key to major-life purchase marketing. By fully understanding the behavior of a prospect in real time, marketers are able to create relevant engagements and experiences that are more likely to lead to a sale and happy customer.