Founded in 1991 as a neighborhood business, the company’s early success came through its consumer relationships. CEO James Rhee shares that Ashley Stewart long thrived without the consumer data and analytics technology that is now the backbone of the retail and CG industries. Yet, it did so because of the way it treated its high-value consumers.
By focusing on the consumer needs through its work on breast cancer awareness or the education of the next generation, it didn’t matter if the retail company survived or thrived, according to Rhee. It was all about building that relationship first.
Of course, today, there’s no competing without data especially as the e-commerce boom lingers — 79% of consumers will shop online regularly for at least the next six months versus 57% in store. To get the most out of the trend, brands should assess what their consumers are worth.
#1. Focus on the Experience
Organizations frequently prioritize customer acquisition, or they hyper-focus on the average lifetime value of a consumer. The problem is acquisition is more expensive than retention, and if marketing is targeted mainly to the “average” consumer, then high-value consumers are overlooked.
This is a lost opportunity because high-value consumers often spend three to five times more. To focus on them, sellers must first look at their e-commerce site and ask:
- Is it capturing the right data?
- Does it have built-in analytics?
- Is it configured correctly?
- Are tags managed properly?
Again, this seems simple, but a simple error in tagging, for example, can slow page load time, which impacts the consumer experience. Then there’s conversion rate optimization. Everything from the right landing page, design elements, and text placement to the existence of consumer reviews can impact the shopper journey and, in turn, sales.
For example, e-commerce company Half Price Banners figured out that high impressions but low conversions meant its site was not properly navigable. With a new responsive website, featuring fresh graphics and streamlined language, the company increased conversions and maintains its No. 1 status in its category.
When optimized, web analytics will generate anonymized unique identifiers that show which products customers are buying down to the SKU level. Entry points and different touch points along the journey can be tracked — essentially the entire path to purchase is captured.
By analyzing the interactions — i.e., where the consumer comes from, how many visits before purchase, average price of products and order value, number of days between purchase, top purchased products, etc. — machine learning backed predictive modeling helps segment high-value consumers for targeting.
#2. Align Marketing Initiatives to High-Value Consumer Behavior
Whether a brand’s e-commerce efforts are ancillary to traditional in-store sales, or it is operating solely on a direct-to-consumer model, the trajectory of online shopping trends is expected to continue — and perhaps rise even further — post pandemic. Sellers now have the opportunity to better align their marketing strategies to target high-value consumers.
The beginning of success is the data streams set up in the previous step. You can’t target consumers without getting to know their behaviors and preferences. Meeting them where (and when) they are might not seem new, but it is foundational. And, after 2020, the foundation needs to be reinforced.
At the core, marketing initiatives must be based on the proven CG mantra: right product, right time, right place, right price. Essential insights to set up this strategy include:
- Top hour to visit (in local time): When are high-value shoppers most likely to be searching online?
- Top hour and day of the week to purchase: When are they most likely to buy?
- Latency: How long does the shopper take to make a purchase after the first site visit?
- Prior website visits: How many times did the shopper visit the site prior to purchasing?
- Mobile first visit percentage: What percentage of all site visits started on mobile devices?
- Mobile purchase percentage: What percentage of all purchases are made through mobile?
- Average order value: How much does the shopper spend per order?
- Items per order: How many items did the shopper buy per order?
From here, not only can retargeting be performed on known high-value consumers but look-a-like audiences can be created as well for new targets. The above checklist will also help prevent consumer churn.
#3. Integrate and Personalize
Anonymized data only goes so far; there’s more to targeting high-value consumers than just online behavior. To get the gold out of the mine, web/e-commerce analytics must be connected back to a CRM platform, which needs to be integrated with marketing software and more.
Bain and Company found that leaders in consumer experience invested in more tools than other organizations, and the tools with the highest adoption rate help manage the experience holistically including customer relationship management (CRM), customer feedback management and experience dashboard tools.
Interestingly, the firm also discovered the tools work best when connected to core systems, concluding that this “makes intuitive sense.” After all, these applications power the business. Just like CG companies strive to remove cultural cross-functional barriers, they need to break down technology silos that could inhibit customer experience.
While marketing may ultimately own the experience, a range of teams touch the customer — think sales, supply chain, fulfillment and more. Integration provides a more holistic view and broader access allowing the journey to be visible, and the relationship fostered, by all stakeholders through channels.
What’s more, integrated systems are a stronger foundation for integrated data streams, a key component of personalization. Consumers these days, especially high-value ones, expect brands to know them.
One such brand, Tapestry, recently invested in its personalization strategy. "Key principles of Tapestry's acceleration program are leveraging new capabilities and data, simplifying ways of working, and sharpening our focus on our customers," said Noam Paransky, Tapestry chief digital officer.
Paransky explained that it “allows us to better understand our customers and put actionable insights into the hands of our teams to drive experimentation and activation, enabling us to personalize the critical touchpoints our brands have with our customers.”
Nevertheless, companies must apply the age-old rule of “don’t deploy technology for technology’s sake” when considering their consumer data and analytics approaches and investments. Each use case will be different.
High-Value Consumers Will Make a Difference
In 2021, the intensified struggle for online market share persists. In fact, a McKinsey survey shows that four out of 10 Americans remain mindful of spending as they don’t see their finances returning to normal until at least the second half of the year, if not longer.
Additionally, the e-commerce boom that emerged as a result of the global pandemic has created an explosion of shopper data that has inundated CG and retail brands alike. These organizations can use this as an opportunity to invest in the technology and strategy needed to identify, segment, and ultimately create a more personalized shopper journey.
High-value consumers help guide better marketing decisions through disruption and beyond. By using this data to create the optimal marketing mix, organizations can create a more memorable shopping experience that will keep these consumers coming back for years to come.