It’s no secret getting to know your customers is essential for marketing success and data is a key element to achieving this. Marketers have long leveraged data to gain insight into the behavior of their customers and send promotional offers based on data attributes like past purchase behavior or upcoming celebrations (birthday or anniversary). But in the age of digital really understanding your customers is two-fold. Marketers need to first understand who their customers are, their demographics, past purchases and lifestyles. And they need to extend these insights to gain a deeper understanding a customer’s life stage – which research shows plays a large role in determining consumer preferences and behaviors. Going beyond more traditional data attributes, marketers must then look to gain a single view of their customers across devices, time and media to succeed in the era of digital.
Understanding life stage
Understanding a consumer’s life-stage allows for marketers to gain a more holistic view of each customer and develop marketing approaches based on the characteristics of that life stage or segment.
Research shows when marketing to millennials, age doesn’t determine preferences and behaviors. What matters is life stage. For example, millennials that live with their parents spend less of their share of wallet on rent and household expenses meaning they have more to spend on themselves and others. Millennials within this life stage spend 41% on apparel and accessories. While millennials who are getting married, starting a family and purchasing their first home, spend 1.4 times more than other stages on furnishings and decorations, like kitchen and modern contemporary décor. When we start breaking down purchase habits for things like luxury purchases or dining, studies demonstrate that there are wide differences as what people seek from retailers. For instance, research found that 13.7% of luxury buyers were under 34, which is not always who we expect to make large luxury purchases (spending on average $1,200 per purchase in specialty luxury stores).
Take another example in a study of the restaurant industry, which found that millennial moms are most dependent the drive-thru, while younger millennials and singles are more likely to eat inside a quick service restaurant. Lifestage also shapes their preference as to how they like to receive communications and coupons, where perhaps not as expected, millennial moms are less likely to get coupons from a deal site and much more reliant on direct mail.
Gaining a single customer view
Once marketers have the foundational insights required to know their customers, they must focus on creating deep customer profiles that are broad, accurate, rich and real-time ready. The ability to connect online and offline behaviors with persistency over time enables personalized digital marketing.
But customer patterns are growing in complexity and are less predictable. To truly provide great experiences, we must have the data management capabilities to know individuals, what they want and be ready to meet them in the moments that matter most.
So as you’re thinking about your customers in 2017, focus on data management and activating what you know about them in new ways to deliver integrated and personalized digital experiences. The industry has changed and moved from mass advertising, to segmenting and is now entering the true stage of 1:1 marketing.
To learn more about the stages of millennials and their spending behavior, download our research #marketingtomillennials: a guide to understanding today's millennials.