How the Smartest Retailers Use Data to Increase Online Sales


Data is all around us and growing at an exponential rate. The idea of big data is exciting and if you read the headlines trumpeting the arrival of ‘The Age of Big Data,’ you would think every business must be using data to predict customer behaviors and craft compelling offers.

Behavior prediction can be determined with enough data, but for most retailers the biggest return on marketing dollars is creating an offer so attractive that it motivates prospective consumers to take action. The goal is to gather enough data about your ideal customer and craft a message so powerful and customized that it appears as if the message was written for them and them alone.

When hiring a data scientist is not an option, the question many retailers have is “how do we, with our limited resources, collect meaningful data and extract actionable insights?”

It is a complex question with a simple answer: start with the end customer in mind and use a technique borrowed from military planners called backwards planning.

Military planners developed backwards planning as a way of simplifying their planning process. Accomplishing military objectives can be complex and backwards planning helps planners quickly design a framework around their ideas. They envision an objective and begin asking the question, “what important step must occur just prior to this outcome?” They continue asking the question until it reveals all of the major events that must occur before accomplishing the objective with a tentative timeline.

For retail marketers the objective is generally a sale of some kind. Assuming you already have a general idea of who your target market is and a demographic description of them, the process is straight forward. Your goal is to determine what data is needed at each step of the buyer’s journey and to use the self-selected data to craft the proper message for that step.

This process of learning more about individual prospects is called progressive profiling. The data planning process is the same as it is for military planners but the question is slightly different, “what information do we need to know about the prospect in order to move them forward in the buying process?” The data gathered through progressive profiling helps marketers make bolder more comfortable marketing decisions because they are working with real data.

Target is famous for their ability to use data to profile potential customers and then follow up with them. In his landmark 2012 article, How Companies Learn Your Secrets, Charles Duhigg told the story of how Target – well before her own father knew – was able to accurately determine a teenage girl was pregnant just by her behaviors. The methodology Target used was more sophisticated than most companies are able to do, but the idea is the same. Gather data and apply it to your messaging in order to increase sales.

Marketing strategies for retailers - such as the methodology used in the Target example - can be applied physically, or digitally where retailers will ask site visitors for information in exchange for something such as a digital download, or coupon. Progressive profiling helps retailers accelerate the buyer’s journey and boost conversion rates by giving marketers key information about the interests and demographics about site visitors.

Digital progressive profiling is accomplished by integrating your website with software, usually a marketing automation system such as HubSpot, to capture information on visitors. When a site visitor completes a form to download a piece of content, or requests more information, they become a lead. The software captures their IP address and utilizes browser cookies to track them on subsequent visits to your website. When they return, the system remembers what information was already collected and serves up different questions to ask before their next download. The answers they provide will help you segment them further.

For example, if you already have their name and email address, then your system can ask them another demographic question, such as job title, or household income. The data gathered will help determine what is the next relevant message you can create for this type of contact and focus on the problems that your brand can help with the most.

For instance, maybe your site visitors will self-identify as single mothers in their late twenties, struggling to manage going back to school on top of the responsibilities of child care. A smart marketer would craft all subsequent messaging for this type of buyer.

Your ability to profile visitors is determined by the value you offer visitors. If your offers have a high perceived value, they will be more likely to volunteer information about themselves. It is important to test how much data you collect at each juncture and what types of data against their willingness to give it. If you ask for too much data too soon, visitors may abandon your pages and not give you what you need. On the other hand, if the content offer is valuable and timely, they may give you an enormous amount of data. You must test the messaging and track the response rates over time.

Gathering and creating insights from big data is beyond the capabilities and resources of most retailers, but progressive profiling can be applied to great success with a small investment in software and developing valuable content targeted at personas.

 The Retailer's Guide to Inbound Marketing

Anthony Butler

Anthony Butler

Anthony Butler is the author of Primal Storytelling and the Founder of Can-Do Ideas

TOPICS: Technology Marketing, Inbound Marketing, Sales, Customer Service, Retail

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