While the formation of a company may, in some cases, take nothing more than a founder’s vision and a growth blueprint, successful product execution requires the feedback of those it is intended to reach.
Consumer data has the power to inform businesses of shortcomings and opportunities or help define a future strategy according to broader consumer trends and values. A 2017 McKinsey study found that leveraging customer behavioral insights can help organizations outperform their competitors by 85 percent in sales growth, and more than 25 percent in gross margin.
That’s a statistic that local Head of Marketing Science Gary Stentz, Jr.. likes to see. Stentz leans on a mix of lifetime value models and retention rate models to understand the particularities behind customer behavior at MuteSix, a full-funnel digital and creative agency. For one of MuteSix’s clients, recently identifying exactly where in the purchasing cycle their customers fell off helped to reconfigure marketing strategy across numerous channels, leading to successful reengagement.
“As a result of leveraging consumer insights and customer analytics, we were able to increase retention rates approximately 30 percent across the board for that particular client,” Stentz said.
To keep pace with competitors, when developing brand strategy and outreach campaigns, marketing teams depend on behavioral data. We met with two local leaders to learn more about how consumer insights inform their marketing strategy, and how it has led them to success.
When supporting numerous brands in their product strategy, MuteSix develops lifetime value models, macro and micro analysis, and buying behaviors for each brand’s consumer base from pre-purchase to post-sale.
What’s an example of an issue you have been able to solve using consumer insights?
Our brands face a lot of headwinds in the e-commerce landscape, specifically around growing their business and acquiring new customers, as well as retaining old ones. Consumer insights and customer analytics are at the core of how we can alleviate some of those headwinds. One way we’ve done this recently for a client (whose returning customer rate was diminishing at an unhealthy rate) is we leveraged customer analytics and built a few lifetime value (LTV) models by monthly cohorts, as well as retention rate models at the monthly cohort level to better understand at what point consumers were falling off and not repurchasing.
Once we understood that consumers were dropping off rapidly in months three and five after initial activation, we were able to close the feedback loop and inform our marketing strategies across email, SMS, Facebook and Google in order to allocate retention marketing buckets toward those customers to try and re-engage them and make sure they didn’t churn. As a result of leveraging consumer insights and customer analytics, we were able to increase retention rates approximately 30 percent across the board for that particular client.
Grasping what happens after the initial purchase and what happens during that customer’s life cycle is key...’’
What technologies or techniques do you use to gain insight into a consumer's journey and motivations?
We look at everything at the macro level and then at the micro level. In terms of extracting macro-level insights into the customer journey or consumer intent to purchase, we typically look at platform-level trends on the marketing side and what’s happening before the point of purchase. We look at macro-level indicators across lower-funnel channels like paid search as an indicator of consumer intent to better understand what a consumer is searching for and what’s top of mind in terms of executing a purchase. We also look toward paid social trends to better grasp how our consumers are interacting with creative and specific products and to learn what types of visuals or messaging are resonating with them.
To really comprehend the nuances of the customer journey leading up to the point of conversion, we use many different technologies — predominantly site analytics, multi-touch attribution and algorithm models. We also leverage media-mix models for a cross-channel, holistic perspective as to the effectiveness of different channels in driving a customer to eventually make a purchase.
How have consumer insights changed the way you view your business’s customer base?
Within the agency model, our portfolio of clients is nuanced — no two clients are exactly the same. However, there are general tactics and trends we can extract from understanding consumer insights so as to get a snapshot of what our clients’ customer bases consist of. We learn about them through everything from demographic-type data to their individual buying behaviors. Grasping what happens after the initial purchase and what happens during that customer’s life cycle is key, so we deploy LTV models to analyze how they’re moving throughout their customer journey after the initial point of conversion. We use retention models to understand churn — if we’re retaining customers and, if we’re not, whether it’s a matter of the product, pricing or other relevant factors.
These types of analytics have allowed us to better comprehend the customer profile in a much more robust way because we have a wealth of customer data on our hands, so we can slice and dice through the data to determine our most valuable customers.
Every consumer’s individual journey is different. With the goal of empowering people of all walks to reach financial security, Core Digital Media synthesizes particularities into cohesive trends.
What’s an example of an issue you have been able to solve using consumer insights?
At Core Digital Media, our mission to empower people to live financially secure lives. But as you can imagine, financial security means something different to everyone. The financial needs and challenges of a college student look completely different from someone preparing for retirement. So how do we help people to make financially sound decisions if we don’t have insights about what motivates them, how they think through financial decisions, and who or what influences their financial thoughts?
A recent project we undertook involved understanding the mental model different consumers hold about their finances and how technology can positively impact their financial decisions. We needed to understand exactly how different consumers used technology to manage their money and how people felt about mixing social media with their money management. We conducted a one-week Google design sprint that concluded with rapidly prototyping a product that could potentially address both issues. Consumers tested our prototype and we interviewed them to gather data, while looking at secondary industry research to analyze our findings.
We always start with consumer insights to create our user segmentation strategy.’’
What technologies or techniques do you use to gain insight into a consumer’s journey and motivations?
We employ a mix of quantitative and qualitative research tools to help us understand consumer behavior during different stages of the funnel. Examples of qualitative research techniques we use include user interviews, usability testing, card sorting and in-field observational research.
For our usability tests, we use an online tool that tracks research participants’ sentiment and frustration points as they interact with our website and app prototypes. We also use online survey creation technologies to craft, distribute and measure survey results.
On the quantitative side, A/B tests help us understand our client’s preferences and what they respond to more. We also leverage our website analytics to gain insights about how our users interact with our web properties, what search terms they use to find the information they need, and how relevant they ultimately find that information. We’re also able to understand in what areas they get hung up on in their journey. Tools like heat maps help us to quickly understand the most important parts of their web or mobile property. Lastly, the information our users tell us about themselves most directly impacts what we understand about their journey.
Research tools
How have consumer insights changed the way you view your business’s customer base?
Consumer data directly informs how our company views our customer base. We always start with consumer insights to create our user segmentation strategy. From there, we’re able to build out our customer personas. These personas then directly inform our understanding of how we provide value to various consumer groups. Our assessment of our customer base has evolved significantly.
Most recently, through consumer insights we were able to successfully target one of our key customer bases that we accurately identified as knowledgeable about financial topics but needed help to effectively achieve their goals. This key insight helps us in our mission of improving the financial strength of our customers by providing tools that directly address their needs.
