As the digital landscape continues to evolve at a rapid pace, marketers must adapt their approach to understanding and engaging with customers. The traditional method of “knowing your customer” through the collection and analysis of consumer data is becoming increasingly obsolete. Consumers are now taking an omniscreen approach to shopping, using multiple devices and platforms to research and make purchases. This presents a significant challenge for brands to predict the digital identity of potential customers and tailor their marketing efforts accordingly.
Furthermore, the data-privacy movement is gaining momentum, with consumers demanding greater control over their personal information. But marketers need more urgency in evolving, just a few years ago 94% of executives identified that consumer data was a top priority for their business. Brands that want to build trust and improve their long-term ROI must look to new technologies that can understand consumer sentiment without relying on personally identifiable information.
Fast-forward to 2023, consumer behavior is unpredictable and digital transformation continues to see rapid acceleration. To gain a competitive edge, marketers will have to leave the outdated way of ‘know your customer’ behind in favor of a modern approach.
Why ‘knowing your customer’ is outdated
Today’s consumers take an omniscreen approach to shopping. Tech is embedded in nearly every device we own, and consumers rely on smartphones, laptops, and smartwatches to access the internet. And what consumers are doing on these different devices can change depending on the browser or social media platform of choice.
This toggling between devices, browsers, and social media platforms presents a difficult task for brands to predict the digital identity of potential customers by relying on third-party cookies from different sources. It’s not uncommon for the average consumer to be served an ad on YouTube while on their mobile device, before researching the product on their laptop through a guest profile, and finally completing their purchase via a third-party seller, like Amazon or Walmart, to get the best price. Even more, 87% of consumers in the U.S. use at least one privacy tool for their online activity, a pattern regulators and major tech brands are taking notice of. In 2021, Apple gave iPhone users the ability to choose what level of data they want to share with apps that have historically relied on user data for advertising purposes. And Google recently announced a goal to phase out third-party cookies from its browser by 2024, leading the way for the majority of internet users to a cookie-free future.
The path toward a new approach
The data-privacy movement is gaining traction, and users expect increased levels of control over their personal data. Rather than investing in other ways to curtail tracking consumer data online, brands who want to gain the trust of consumers and improve long-term ROI must look to new technologies that can understand consumer sentiment, which don’t require a reliance on personally identifiable information (PII). Here are a few ways to make that happen.
1. Tap into your anonymous audience: Using the power of real-time analytics, brands can take it a step further and implement tools that can analyze micro-behaviors to increase conversations without prior historical data. Essentially, tools, like in-session marketing use the best of AI (Artificial Intelligence) capabilities to identify on-the-fence site visitors to nudge a transaction over the edge. Let’s look at a real-life application. An eCommerce brand can present a group of on-the-fence consumers with a customized offer, such as 20% off their first order, based on the real-time analytics of their site visit, promoting the likelihood of purchasing.
2. Turn towards real-time analytics: By abandoning the over-reliance on historical data sourced from PII, marketers can look towards investing in real-time analytics. Through real-time analytics, brands can track sentiment in-the moment to spot trends within your audience, providing your team with the most up-to-date information for targeting. Investing in real-time analytics is the most accurate way to track rapid changes in consumer sentiment, enabling brands to jump on trend cycles and opportunities before they fade out.
3. Invest more of your budget in SEO and less in paid search: After the retirement of third-party cookies, brands will no longer be able to laser-target customers using Google Ads. Once Google officially sunsets its third-party cookie tracking, brands will lose access to targeting consumers based on their history in Chrome. For paid advertising, only two options remain for marketers. Marketers can spend more to target consumers with a wide net, or they can accept results with less impact. But there’s a third option – SEO. An easy way to start leveraging SEO is by allocating the budget from paid search towards SEO to attract organic traffic via keyword search. Research shows 69% of marketers invested in SEO in 2021, and 50% say keyword rankings with organic traffic are the top markers of SEO success.
4. Expand your budget for influencer marketing initiatives: With consumer tracking on the decline, social media influencers provide marketers a direct line to reach consumers through a trusted spokesperson. A hand-picked group of micro-influencers with a community-like following goes a long way in connecting with consumers that closely align with your target market on popular platforms like Instagram and TikTok.
5. Invest in a live chat solution: Providing consumers with quick access to commonplace pre-purchase questions – such as sizing – is crucial in today’s endless options for retail purchasing. This means consumers won’t wait around for an email response or for someone to answer their phone call. This is where live chat, through a chatbot, can step in. But, it’s important to know who your consumers are because there are steep generational preference differences when it comes to chatbots. 20% of Gen Z consumers prefer to use a chatbot, whereas Boomers would prefer to stick to other channels. The best use cases of live chat options seamlessly transfer AI-driven chatbots to human agents, who can effectively handle high value inquiries relating to cancellations or stock updates, for example, while reducing the overall resolution time.
6. Create a rewards program: Brands have a higher chance of selling to an existing customer than selling to a new customer, by a 60% margin. This means investing in winning over and retaining customer loyalty is worth the spend – and creating a rewards program is a great way to show consumers the impact their purchases can have on their bottom line. Even further, research shows that 70% of consumers are more likely to recommend a brand if they have a good loyalty program.
The core lesson? When a way of marketing falls out of favor, a new one opens up to unlock greater opportunities. While the era of ‘know your customer’ has reached its end point, new technologies are empowering marketers to embrace a new approach that relies on in-the-moment micro-behaviors of consumers, responding to their desires without capitalizing on their identity.
