It’s a race, a race to collect data, but very few companies invest in the resources that would get them to the finish line. Why? These companies realize what prize lies at the end of the race – potentially winning over customers – but do they really know how to leverage this data?
We see companies struggling with a few issues. Those within the Consumer Packaged Goods (CPG) industry are increasingly gathering more data as a “catch all” and not driving insights from this data effectively. Additionally, there is a prioritization of collecting these insights over leveraging within omnichannel communications for the end goal to improve customer experience. The path to the end of the finish line doesn’t have to be tough, and we’re here to break it down to help you use your data a bit better, smarter, and hopefully savvier.
But first, let’s ground ourselves in some basics. There are three classifications of data: first-party, second-party and third-party.
- First-party data: Data you collect from your audience. This would be all the information you have via website activity, app usage, email and social media engagement, paid media performance, consumer feedback (reviews, ratings, surveys), and coupon redemptions.
- Second-party data: Your partner’s first-party data. Depending on your partner, their data sources vary; examples include a retailer’s in-store purchases (see a related Ansira blog for more on transactional data), Amazon’s website traffic or Facebook’s audience data, etc.
- Third-party data: This is aggregated data collected from multiple sources by an entity, such as Acxiom. This is often inferred data based on behavioral/demographic interests and patterns. (See this Digiday article for more)
While a combination of this data collectively can provide the insights, precision, and scale to elevate a CPG company’s brand experience, let’s take baby steps and keep our focus on first-party data – “What do we use it for?” The short answer is, to anticipate, address, and provide for our consumers’ needs. The long, and more valuable, answer is for the following:
- Jump Start Your Product Development
- Utilize your consumer data and insights in your product development process. Product innovation/enhancement should not be followed by trying to convince consumers to buy that product, but rather look at trends and what they already show interest in buying via aspirational feedback from customer interactions including ratings and reviews, social media comments and contact center conversations and use that as a starting point. You would want to look for any feedback that includes phrases such as, “I like,” I wish,” “I hope,” or “would work better if.”
- Leverage Competitor Feedback To Create Differentiation
- You have a valuable resource at hand, and it’s not just for your brand. Analyze customer feedback for competitor brands to help strengthen your product differentiation among your consumers, identify any gaps and gain a bigger market share by improving the consumer’s journey, from awareness to purchase and then advocacy.
- Get To Know Your Consumers Well
- Consumer needs are ever-changing and CPG companies need to keep up. Study your consumer’s demographics (sex, age, income, profession, household info, etc.) to help you wrap your head around what your segments look like. A better understanding for consumer needs will help you craft the appropriate and relevant messaging for your audience and deliver it when and how they expect to receive it.
- Focus On Data Driven Targeting
- Once you know your consumer and have the right messaging, your data will lend to more precise targeting of this content to your segments and help create budget/marketing efficiencies (increased ROI) by not including people that fall outside of your defined audience. Augment this understanding of your consumer to capture lookalike audiences and expand your funnel.
- Be All About Personalized Experiences—If you’re not doing them, then what are you even doing?
- As you start to know your consumers, ensure the data gets translated to their experiences, online and offline. 90% of Forbes Global 500 executives believe that improving consumer experience will be the key battleground. Consumers expect a value-exchange relationship with brands, where they readily provide information in exchange for personalized and curated experiences, saving them money and time, therefore building brand trust and loyalty. Take an omnichannel personalization approach, reflected in all the channels you interact with the consumer, be it website, app, email, social, print or SMS.
This brings us to the question, “How do we use it?” The answer is through activation against this first-party data and weaving it within your marketing campaigns.
- A study from Boston Consulting Group & Google shows that 77% of connected brands have their 1st-party data mostly/fully embedded in their marketing campaigns, with 30% of nascent brands using it consistently or frequently in most marketing campaigns.
Based on the brand’s level of data usage sophistication, the applications can be grouped into three key areas:
- Data activations that help brands to generate insights and develop a deeper consumer understanding to derive personalization. This would include activations that lead to extrapolating business insights as well as reaching a single consumer view.
- 85% of brands use data for activations that can help them understand consumer behavior.
- 3 out of 4 global marketers believe a single view of their customers is essential to achieving marketing goals.
- Marketing activity activations that help derive audience engagement. These activations would include various audience targeting approaches.
- 87% of brands use first-party data for audience definition by creating custom audiences, lookalike audiences, and remarketing campaigns.
- Activations that enable campaign measurement, effectiveness, and optimizations. Activations like predictive campaign scoring would be an application for this.
- 81% of brands leverage first-party data to understand campaign effectiveness.
- Third-party transactional data appended to your first party data can be used to determine ROI.
Digitally mature CPG brands with advanced technologies commonly deploy these four, more sophisticated activation methods for first-party data:
- Audience definition:
- This helps develop a deep key target segment understanding, enabling personalized communication
- Lifecycle marketing:
- This encompasses consumer engagement, be it relevant offers or appropriate experiences across the funnel that are strategically driven by the consumer’s stage in their lifecycle to help maximize the consumers’ lifetime value
- Personalization engine:
- This activation leverages machine learning (AI) and analytics to provide hyper-personal experiences to the consumers
- Advanced cross-channel lead management:
- This activation application seamlessly integrates the lead activity across multiple channels to enable lead nurturing via cross channel communications
Brands have seen great value in delivering holistic, relevant, and personalized experiences by customizing their approach to the different audience segments within their database. This has helped them drive campaign and budget efficiencies by reaching the audience segment that is more likely to take action on that communication as opposed to delivering generic content to a broad audience.
Some Big CPG Brands Doing Right By Data:
The world’s largest carbonated drinks company, Coca Cola (an Ansira client), is dedicated to continual innovation and has developed infrastructure that leverages data to collect consumer insights, allow the consumers to be heard and identify emerging product trends. Some examples are the tech they use and the ads they deploy. Coca Cola uses AI-powered soda dispensers to understand evolving consumer preferences, activates the data collected to improve product and user experience. The AI enables the machines to adjust the “mood” based on their environment, along with determining the beverages to promote, therefore serving drinks more likely to be purchased. Data from these dispensers is also used for product innovation—Sprite Cherry. In addition, Coca Cola uses data marketing to reach the people it needs to drive the business, creating lookalike audiences for display advertising and leveraging the best, most relevant content for the smartest investment.
Another example is Unilever which uses a very data-driven strategy to see a major uplift in the effectiveness of its marketing activity, spend optimizations and return on investment. Unilever has grounded its digital advertising brand communications in deliberate and data-driven audience segmentations along with a programmatic approach to media buying to maintain its campaign effectiveness.
To learn how Ansira can help your brand leverage data to elevate your customer experiences, contact us today.
