Ask anyone in DM about using attitudinal information in customer targeting and you’ll probably get one of two responses. Either “it’s a waste of time” or “what you need to do is to project attitudinal segments onto your database”. Unfortunately neither of these answers is correct. The first is mistaken and the second is misguided.
Currently, agencies that do recommend to clients that they should include attitudinal flagging within their database targeting usually suggest one of three methods. Either to buy-in flags from a commercially available attitudinal or psychographic database, like Wegener’s Real Motivations, to create one’s own attitudinal segmentation and project that onto the database, or to contact as many people on the database as you can to gather information directly from them. This is then simply appended.
Despite this range of options, many in the DM industry remain unconvinced and we believe they are right to be so. The current approaches are all akin to using a fork to spread butter – they are just not up to the job. What each of these approaches are missing is a fundamental understanding of the key “Perceptual Drivers” that people use to compare the attractiveness of the various options open to them. These are the manifestation of attitudes as they apply to a particular company’s offer.
Based on RedRoute’s work in this area for a wide range of companies including supermarkets, DIY stores, mobile phone stores, petrol stations, utility switching web-sites and others, we find that these Perceptual Drivers can be grouped under 5 key headings. Knowing what these headings are can then ensure that you ask the right questions to find out exactly what you need to know in order to optimise both the tone and the content of your one-to-one customer marketing activities. Moreover, our clients have found that using the approach increases the effectiveness of their direct marketing activity by 50% compared with traditional targeting approaches.
To understand these 5 headings and how they work, consider the DIY market as an example. The first heading is “Relevance” and in a very simple sense there will be a clearly different level of relevance for someone who is renovating their whole house compared to someone who just needs a new light bulb. Understanding the level of interest and need someone has for the category is the very first step.
The second heading is “Identification” and by this we mean how well does the customer relate to your company or brand. If they have never heard of you they will have few opinions other than what you are presenting now but in a well-known market like DIY retail, consumers already have opinions on the major players such as B&Q, Focus, Wickes and Homebase based on those company’s previous marketing activities and the stores they have seen. Most men, for example, would expect B&Q to stock a much wider range of the more sophisticated DIY products than Homebase whilst most women will feel that Homebase is a more “shopper-friendly” environment. Clearly these perceptions will impact upon their likelihood to respond to the differing marketing communications from each company.
“Accessibility” is the third, and sometimes most important, dimension. There are typically several aspects to be considered. The first is physical accessibility. If you live in London, you are unlikely to travel to Scotland just to visit a particular brand of DIY store (unless it is the only store in the country that stocks what you need!). The second is financial. In the DIY market, your disposable income will dictate to a large extent the amount that you can spend on your house and, just as crucially, whether you do it yourself or pay someone to do it for you. This will affect your spending at DIY stores. Then there is your skill level. Not everyone feels confident in doing DIY jobs so this can add another barrier. Understanding each of the key attitudinal and physical constraints that may affect someone’s ability to take advantage of your offer is vital if you are to be able to use attitudes to make a worthwhile difference to your targeting.
The fourth consideration is “Value”, namely, their attitudes to life; to making sure they get good value for money every time they shop; to marketing; to offers and discounts and so on. In the DIY market, for example, some people may well possess the need, be happy with the company and have all the skills and ability they would need to do the job. The problem for them is that life is just too short. Doing DIY would get in the way of doing other more exciting things. For others, the need to “get a good deal” would make them readily switch supplier based on price alone.
The final area we consider is “Confidence” (or “Trust”). Ticking all the boxes above may still not be enough to get a response to your offer if past experience leaves the consumer with a doubt about the level of reliability of the service they may get. In the case of DIY, if past experience shows that half the bits were missing from the last piece of flat-pack furniture you bought from the store, you will have doubts about them next time. These are personal experiences but if you know your company had a problem with a previous product then the likelihood is that any customer that bought that product from you will be less likely to buy again. Including this in your CRM strategy and reflecting it in your communications can pay handsome dividends in terms of subsequent customer re-purchase and loyalty. People can be very forgiving but these days they expect that you will remember what happened to them last time.
Using this simple check-list to make sure that you have thought through all the sorts of information you may want to know about the customer will take you a long way towards defining the questions you need to put on your survey. Once these have been gathered, a Perceptual Drivers analysis will help distil them into the key criteria customers are using to compare your offer with their needs. Example drivers for the DIY market are shown below and the differences in the importance placed on each of these factors by differing customer segments is clearly visible (a value of zero on the scale means the score equals the average amongst all customers, less than zero means less than average and more than zero means greater than average).
This chart shows, for example, that those with a high interest in DIY are less concerned about simplicity, they actually get pleasure from doing the tasks themselves, whilst those with a low interest have the opposite opinion. On product quality, this is a vital “esteem” factor for those with high interest, but is not at all concerning for those with a general level of interest. They feel that provided the product does the job, any brand of paint will do. For those with low interest, product quality is more of concern as they wish to have the reassurance of using, for example, well-branded products. They do not feel they are expert enough in this sector to “trust” using cheap or unknown ones.
Such analyses make it much easier to think how to tailor the tone and content of differing communications to the needs of differing segments in the customer database. Moreover, the level of loyalty of each segment is directly related to how well you are able to match your offer at delivering on each of these key Perceptual Drivers according to the importance they place on them. For example, compromising on the Garden Range would be a significant problem for the High Activity group shown here and would produce a significant reduction in their loyalty. By contrast, stocking only those products suited for the most ardent DIYers would be a major problem for the Low Activity customer group.
Flagging customer attitudes on the database itself also becomes much easier. Correlations between the Perceptual Needs shown above and individual customer behaviours enables customers to be scored according to the importance they are likely to place on each key driver. This enables targeting models to be developed which include such variables for customer selection. The net result, as mentioned above, is to produce much more effective marketing campaigns, with higher response rates.