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Selling Lipstick to Your Dad

September 6, 2016 | Contact Author | By: Matt Segal, Clutch
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Shoppers who receive personalized marketing efforts will spend more, shop more frequently and be more loyal to their beauty brands.

Abstract: The pitfalls of one-size-fits-all marketing.

In today’s “show me that you know me” marketing world, it’s imperative that beauty brands understand and engage their shoppers on a personal level. Obviously, that’s easier said than done.

Dads still get emails about lipstick. Moms still get offers for men’s shaving cream. These are examples of marketing plans from companies that ignore the diversity of their client base and the behaviors behind purchases.

One-size-fits-all marketing is, unfortunately, all too common. Through careful data analysis and the use of a consumer management platform, companies can unearth consumers who are passionate brand advocates and weed out those who only respond to the discounts.

“Having a 360-degree view of our customers’ shopping behavior provides us insight into the consumer mindset like never before."

More importantly, consumer management platforms help brands integrate data across a retailer’s systems by matching social media profiles to the point-of-sale system (POS) and e-commerce sites. Integrating these data points helps companies to develop granular insight that improves marketing efforts by personalizing communications. 

Research shows that 80% of profits come from 20% of a company’s existing customers—the most valuable customers (MVC). These are the ones you should build and strengthen relationships with. To do that, you need to get personal.

Putting Personalization to the Test

According to research from Marketo, nearly four out of five consumers will not engage with an offer unless it is personalized and relevant to them. One of our clients, a luxury personal care brand, deployed a data-driven experiment to test the power of customized communications.

In an A/B test, the company sent offers to two groups of consumers via direct mail and email. One group was targeted with personalized content based on established preferences while the other group received the generic campaign.

Shoppers who received the personalized offer spent 15% more than those that received the generic offer. The personalized direct mail campaign saw a 20% engagement bump over the generic offer.

“We’re looking at it from a whole new perspective and are adapting our processes and approach to interaction with our customers,” said Mary Harrington, senior CRM and loyalty manager for Crabtree & Evelyn, which has adopted a data-driven loyalty program focused on personalization. “We’re developing entirely new ways to provide them an integrated and seamless experience.”

Data That Goes Beyond Stereotypes

We all know brands that have tailored their marketing to target customers in a niche, only to see consumer views change around them. Think of companies that see themselves as selling “old lady” perfume.

The preconceived notion of their clients can devolve into stereotypes. Relying on incomplete customer profiles is the very opposite of showing the customer that you know them, and ensures that brands will stagnate.

Multichannel data contains precise information on ages, genders, locations and buying behaviors that can be compiled to generate customer profiles that go beyond stereotypes. Here are just a few sample customer personas beauty brands can build using the data at their fingertips:

The Familiar Face

She comes in once a month and purchases an array of products. She trusts the staff, follows the brand on Twitter and is all about being pampered. Her average purchase value is approximately $65; lifetime spend is about $1,822.

The Gifter

He shops a few times per year for special occasion gifts for his wife. He might not buy frequently, but when he does he likes to go the extra mile. Average purchase value is about $110; lifetime spend is $776. Last visit was 82 days ago.

The Stock-up Shopper

She’s always on the go and only shops online for larger than average quantities. She’s buys three tubes of her favorite mascara and lipstick without fail every quarter. You can always count on her to share a picture of her shipment over Instagram. She spends about $90 per visit; lifetime spend is $1,955. Last visit was 23 days ago.

The Periodic Purchaser

She shops sporadically at the outlets, typically buying for herself and her daughters. The purchases tend to vary with each visit. She spends about $75 per visit; lifetime spend is $2,466. Last visit was 400 days ago.

“Having a 360-degree view of our customers’ shopping behavior provides us insight into the consumer mindset like never before,” said Harrington. “Not only how they’re shopping and what they’re buying, but why they’re making the decision to buy in a specific channel and what their motivations are.”

Incentivizing Goes Beyond Dollars and Cents

Without the ability to tap cross-channel, data-based insights on their shoppers, many marketers target customers with discounts or coupons that train them to hunt for bargains. A personalized campaign yields better results and protects margins. Instead of discounts, consider exclusive perks.

Have a number of customers engaged through social media? By integrating social profiles into a customer management platform, brands can use surprise and delight to thank customers for sharing content with their followers. A direct message back to the customer with a special code for a free gift, or a simple reply to a post can go a long way in building loyalty.

During the holiday season, shoppers might be incentivized to make purchases from stores offering free gift wrapping and pick-up or drop-off services. For shoppers, little bonuses can melt gift-giving stress and simplify their lives.

Other shoppers might value exclusive invitations to events or “sneak peaks” of upcoming products, which give them access to new merchandise or special edition products that have celebrity ties. Companies should also consider using unique content, such as tutorials led by industry experts, to thank their MVC.

Tapping Data to Create Loyal Customers

Using the sample personas and A/B testing above, beauty brands are better able to understand the motivations behind their MVC, who have an outsize influence on their bottom line. Developing a data-driven MVC engagement plan requires four key steps.

1. Identify your goals.

Integrate the data captured from the customer profiles (detailed above) during lifetime spend in both e-commerce and in-store, along with social usage, average spend and last visit. The goal is to both increase sales and the number of member transactions, while also decreasing the time between customer purchases.

2. Use all available data.

Merge multichannel customer data to create actionable insights. One brand—relying solely on in-store traffic data—believed that its typical customer was a middle-aged, upper income woman. Imagine their surprise when they learned that their online customers included millennials who tended to spend three times what their “typical” customer did.

3. Be prepared to go back to square one on marketing materials.

Sending targeted offers to consumers is much different than using one-size-fits-all campaigns. The path from generic to customized design requires a team that can tap insights from data to develop communications that resonate.

4. Evaluate, measure and prepare to readjust.

The ability to measure consumer response should be wired into a consumer management platform. But don’t sit still. MVC will change over time, and businesses need to be able to act accordingly.

Insight from data guarantees smarter marketing decisions and improved customer engagement. By properly identifying and targeting MVCs, brands can reap rewards, turning occasional shoppers into brand evangelists, and bargain hunters into lifelong consumers. It represents one of the true win-wins in marketing.

Matt Segal, vice president of health and beauty solutions for Clutch, helps brands identify, understand and motivate their customers to earn genuine loyalty with advanced customer technology and expert marketing strategy. Segal advises leading brands across the industry, including Bluemercury, Crabtree & Evelyn, NARS Cosmetics and The Body Shop, on strategic customer solutions. Prior to Clutch, he served strategic roles with agencies and consulting firms that focused on delivering solutions to an array of industries from sporting goods and video games to mobile and consumer electronics.