Using the right data to understand consumer behavior

Leveraging the right data has never been more important for marketers. COVID-19 has created a shopping environment unlike anything we’ve seen before.

Customer journeys are increasingly varied, with people at home either spending an increased amount of time online to find the best deals, or, on the other end of the spectrum, and not shopping at all due to economic uncertainty.

This is an especially sensitive time for consumers who are in the middle of a major-life purchase (MLP)—or big ticket items that require high consideration, such as insurance, a car or a home.

As they navigate these experiences online, the role of targeted, informed communications from marketers are that much more vital.

According to Forrester, marketers who craft messages that match customer expectations and build trust will be more successful at connecting with consumers in a COVID-19 world.

In other words, marketers need to understand consumer (Read more...) to craft an accurate message in a safe and compliant way. The best way to do that? Understanding the right data.

Using data to guide customer journeys

Data is increasingly being employed by marketers. However, with so much data available it can be difficult to separate useful insights from noisy data points.

Traditionally, marketers start with first-party demographic data (i.e. age, income level and occupation) to build an ideal customer profile (ICP) and understand their target demographic.

Marketers can use data from their current customers to estimate behaviors and needs of potential customers, however, this strategy falls short in a time where behaviors fall outside of the norm.

Unlike demographic data, third-party behavioral data shows consumer activity in real time for both current or prospective customers. It gives marketers insights—not estimates—on behaviors that are constantly changing and evolving, especially now during a pandemic.

Jornaya data shows that mortgage and insurance shopping journeys typically last as long as six months, but COVID-19 has dramatically changed that.

Consider these two situations featuring individuals who were both in-market prior to the pandemic, but who’s journeys were impacted differently:

• Situation A: This person was shopping for a new home prior to the pandemic but ran into some financial trouble and decided now is no longer the right time to make a major-life purchase. Reaching out to this person to talk about a purchase when they are suffering financially may harm a potential customer relationship. Instead, marketers can wait until behavioral data indicates this person is ready to continue their shopping journey.
• Situation B: This person was casually exploring the housing market, but with the pandemic’s impact on interest rates they want to take advantage of the market and accelerate their buying journey. This would be a perfect opportunity to conduct timely, targeted outreach to see how you can help this individual get across the finish line.

Identifying these real-time shifts in in-market behavior can save marketers significant time and resources. Recent data shows that shopping journeys have either slowed down to a complete stop, or sped up considerably depending on financial security.

Because of this flux, it is imperative for marketers to be thoughtful when choosing who they market to and how they drive outreach, and to be available to consumers who are in-market looking for guidance.

With great data comes great responsibility

Recently significant emphasis has been put on consumer privacy, but it is nothing new.

With the Federal Trade Commission’s Fair Credit Reporting Act of 1970 and the Telephone Consumer Protection Act (TCPA) of 1991, privacy regulations have long been in place to protect consumers. This doesn’t change in the face of a pandemic.

Enforcement of the California Consumer Privacy Act (CCPA) which was enacted in 2018 to give California consumers control over their data, is still set to begin on July 1, 2020.

This means that businesses who are currently busy facing uncertainty around COVID-19 must also ensure they are compliant with CCPA by July to avoid heavy financial penalties.

Forrester indicates consumers that feel a brand is putting them first during COVID-19 are more likely to trust that brand to keep them safe, recommend that brand to family or friends and favor it over others.

A majority (85%) of consumers reported they will take their business elsewhere if they feel a company isn’t handling their data responsibly. One data breach or data compliance lawsuit is all it takes for a brand’s trust factor to be tarnished.

So what steps can be taken to ensure compliance and customers’ privacy and trust?

• Provide transparency: Be clear about your guidelines on Personally Identifiable Information (PII).
• Know where your data is coming from: If you’re working with a third-party vendor who gives you compromised data, it won’t be them facing charges.
• Storage and Access: Discuss where you are storing your data and how you are accessing. For example, if it’s in the Cloud, what security measures are in place? If not, where does the data live and how is it protected?

These regulations are a positive thing for consumers and marketers alike. Consumers gain the privacy and data protection they deserve, and marketers get the opportunity to build a relationship of trust with consumers. The more trust you can build, the more success you will have in the long run.

Looking to the future

For business leaders and marketing experts, it’s important to realize old marketing strategies might not work under these new market conditions. What won’t change is what should always be at the center of your strategy: the customer.

Marketers have always been programmed to put the customers’ needs above all else. As these needs shift rapidly, it is essential to consider how  to support them now and in the future, and how to maintain trust between the organization and individual.

The more you know about your customer, the better you can serve them in these changing times.

Ross Shanken is a digital technology business builder, thought leader, and patent holder who founded Jornaya (originally LeadiD) in 2011 after a 13-year career at TARGUSinfo. Ross now spends much of his time collaborating with customers, advisors, and thought leaders to evolve Jornaya’s platform to best meet the needs of the broader digital marketing ecosystem.