A few weeks ago we wrote about holiday shopping predictions for 2020, which include a longer shopping season, an increase in online shopping “back to basics” gifts, and reimagined shopping experiences. With the holiday shopping season now underway and these predictions becoming reality, retailers’ must now be focused on executing marketing campaigns that cut through the noise and show customers why it’s your brand they should be shopping with you and not your competition.
The most effective way to make this happen is to engage your customers with personalized messages and offers tailored to their interests and behaviors. This is known as customer-centric marketing, and it has become an extremely effective and popular marketing approach in the retail space as more and more businesses have prioritized customer experience in all facets of their business operations.
However, the holiday shopping season poses a unique dilemma for retailers looking to carry out such a strategy: most consumers aren’t buying for themselves this time of year, they're buying for others. This means that sending them targeted offers based on their previous interests and/or past purchases is likely to be far less effective and not yield the type of results typically seen in personalized marketing efforts during the other 10 months of the year.
So what can marketers do to ensure their holiday marketing campaigns are still customer-centric while having to rely less on hyper-personalization?
Customer segmentation is the key to overcoming the personalization problem
Just because you can't target your customers with specific product recommendations or based on prior purchases doesn't mean you're stuck sending bland, boring, one-size-fits-all marketing materials to them. By analyzing your existing customer data and performing customer segmentation, you can identity groups of customer based on their shared behaviors and/or traits that go beyond just purchases. High-level examples of this are age group, gender, and area of residence, while more sophisticated customer segments might include:
- Customers who have made a purchase in the last 60 days
- Customers who have not made a purchase in the last six months
- Customers with an email open rate greater than 50%
- Customers who purchased most frequently and/or spent the most during the calendar year
- Customers who purchased from you last holiday season
Once you’ve determined the customer segments you want to engage, you can then get creative with your messaging and promotions and target various segments with different promotional offers. Perhaps your frequent purchasers receive an exclusive "buy one, get one free" offer that thanks them for their loyalty throughout the year, while customers who haven't purchased from you in the last six months get an offer for free shipping on Cyber Monday to entice them back.
These are examples of personalization that, while not as hyper-specific as purchase-based recommendations, are still meaningful to consumers and that are likely to resonate with them much than a generic "Shop with us on Black Friday" email or flyer ever could. And while there's nothing wrong with a good old-fashioned sale promo, it's clear that personalization works and that today's consumers expect it from the brands they do business with. Retailers would be wise to use customer segmentation to ensure their customer-centric marketing efforts truly cut through the noise this holiday season.
Trustworthy customer data is the key to accurate customer segmentation
The holiday season often presents a number of challenges for retailers, and the 2020 holiday shopping season is likely to be one of the most challenging and unpredictable in memory due to COVID-19. As we noted in the early days of the pandemic, segmentation is important during ordinary times and even more so during challenging ones. But 100% accurate customer segmentation is only achievable when it's been carried out with customer data that is also 100% accurate, which is why customer data platforms (CDPs) like QuickPivot have become such critically important technology for modern marketers.
The QuickPivot CDP is designed to integrate with your existing MarTech systems and bring all your customer data (both historic and current) together in one place to provide you with a real-time, unified view of your customers. Using QuickPivot, you can quickly and easily create specific customer segments that you can then target in your campaigns, or analyze this data to identify previously unknown segments that may be responsible for driving your marketing efforts (or that are lagging behind).
Customer-centric marketing doesn't have to be another challenge marketers face during the holiday season, even with the diminished impact of product-based personalization, as long as they're able to segment and target customers in other meaningful ways. So if meaningful customer segmentation is a struggle at your organization, reach out to us today to learn how the QuickPivot CDP can simplify and enhance your segmentation efforts and help you better understand, target, and engage your customers during the holiday shopping season and beyond.