For years, businesses tended to collect only a person’s name and address for their marketing lists. They might occasionally ask for phone numbers and, later on, emails, but few really went beyond this. Most marketing experts didn’t yet understand the value of collecting more data. Instead, marketing campaigns were simply blasted out into geographical locations with the goal of hitting everyone there. The idea was that in order to hit the most people who would like your product, you needed to advertise to everyone.
Today, we know that’s not the case. This type of broad marketing campaign has become more and more expensive, and it doesn’t always get the results you want. Instead, it’s become more important to first enhance your audience data so you can better target potential customers who are more likely to buy your product. Narrowing down the focus and personalizing email campaigns have become the best way to save money, learn about your market, and convert potential customers into paying ones.
Case Study: AirBNB
Airbnb was on its way to failure early on. The company went over three years before it began showing a profit. While the company began in 2009, it wasn’t until 2014 that anyone could truly say they were a success. As the chart on this page shows, Airbnb brought in next to no profit in their first three years. Today, however, they’re pulling in 40 million or more a year. The company did this by looking at what their customers wanted. They collected data on the customer experience, listed to what customers wanted, and responded.
One way they have done this is by creating a dynamic pricing algorithm. Using data from hosts, customers, rental demand, and location, the service has created an algorithm that takes what customers and hosts want and distills it. Hosts can see what the optimal price for their rental will be based on what customers want, when they want it, and other factors. Without collecting enhanced data, this algorithm would have very little to work with.
Airbnb also understands that many of their customers have a set budget for their rental. Thanks to the algorithm that runs off enhanced data, though, there is very little guesswork that goes into setting the perfect price for a rental. Everyone involved – Airbnb, the host, and the renter – finds more success and is overall happier thanks to this information.
Personalizing the Experience
The company also looked at personalizing the experience. By creating personalized information and making the entire process easier, they were able to improve bookings by 25% simply by improving the referral process. The company invested time and money to optimize this process and improving performance by 300%, and it paid off. If they had not been tracking performance via enhanced data, this would not have been possible.
By gathering information on potential customers via referrals, Airbnb was better able to create an experience these potential customers would enjoy. This included marketing specifically to individuals based on their needs rather than using a standard template. By investing the time to do this, their conversion ratio improved much higher.
Reviews also help provide this customized experience by providing potential customers with real-world examples of what was good and what was bad about each rental. Airbnb was also able to take this enhanced information and work it back into their algorithm, helping to improve suggested rentals and even indicating what pricing may be appropriate for certain locations.
Finally, Airbnb has used enhanced data to optimize their webpage. As a software engineer explains in this blog post, the company has over 75 million searches every day. However, the Rails system used to run their website has only been upgraded over the years rather than redesigned. Users would have to click through four different standalone pages in order to make a booking, something that was not a fluid, easy to use system that adjusted to the user’s experience.
While this undertaking was by no means easy, the result created a more personalized experience for audiences that was driven by audience response and experience. This type of change can be used online to improve websites and reach new audiences, but it can also serve as a map for marketing campaigns, too. Using enhanced data from customer experiences can result in designing entire new campaigns based on what customers want.
Using Enhanced Data to Reach Your Audience
Enhanced data, or first party data, can play a significant role in your own business. As shown here, marketing experts rely more on data they collect themselves than on information purchased from someone else. That’s because they know first-hand data is useful, real, and authentic. With second or even third-party data, that may not always be the case. However, second-party data can be useful in reaching out to new customers, so you can’t immediately discard it. By using data another company has gathered on their audience, you may be able to reach a new second of your target demographic.
This data can be used in a number of different ways.
Truly Know Your Market
With enhanced data, you can really focus in on certain types of people. For example, if you have a bookstore, you can look for potential customers who have stated that they enjoy reading. If you’re a store that sells costumes and accessories, you can look for people who have attended comic book conventions or other events where they might want to dress up. Having all of this enhanced data can allow you to know exactly who might want your services and find those individuals.
It allows you to narrow down your dataset, too, by removing any records for customers who do not fit your profile. This not only means you can focus on your market, it also means that it takes less time to prepare reports, analyze data on your market segment, and more. You’re able to do everything faster and more effectively because your data set is so much smaller.
Create Unique Marketing Campaigns that Speak to Your Audience
There are four different reasons why a unique marketing campaign aimed at a specific audience is important. James Pasmantier outlines these in a blog post he wrote on Innovation Excellence:
- Campaign Investment. They motivate upper level executives to invest in the campaign because it’s focused and driven to meet specific customer needs.
- Communicates Objectives. It identifies and communicates objectives to potential customers, helping them understand how and why they should be interested in what the campaign is offering.
- Campaign Definition. It defines the problem, shows the objectives, and drives the implementation of the solution you’re offering home to customers.
- Urgency. It creates a sense of urgency, especially if there is a deadline or limited number of products available. Potential customers feel as if they must act quickly or miss out. It also provides a sense of urgency to your team, putting deadlines in place and driving your employees to meet those deadlines.
These focused campaigns are not possible without enhanced data, providing the information needed to truly narrow down the sector to be marketed to.
Effective Campaigns Over Massive Campaigns
Overall, building effective campaigns that target a higher quality customer that doesn’t waste your marketing budget has become much more important than building massive campaigns that hit a wide general audience. Airbnb has shown that by using enhanced data, it’s possible to reach potential customers in a way that meets their needs and provides them with a personalized experience. Other companies have done this as well. As Forbes reported, Nike, Red Bull, Beats by Dr. Dre, and Prudential have all created ad campaigns that make use of enhanced data to show audiences why their products and services are needed. By following in their footsteps and putting enhanced data to work for you, you can do the same