June 15, 2016 | Written by: Michael Dobbs
Categorized: Consumer Experience
10 years ago a price sensitive shopper spent her Sunday afternoons clipping coupons to make sure that s/he was getting the best deal possible. Not a great use of time! Everyone got the same deals on the same product. Today companies use Promotional Data Personalization to make sure that consumers get the right product in the right channel at the price they are willing to pay. This new form of personalized Marketing is great for the company and their consumer.
Companies today are targeting their promotional offers. They do this by getting to know their consumers even better on a 1 on 1 level. What just 10 years ago was SciFi is a Best Practice today. Companies can use Big Data Analytics to combine learning from their internal data (i.e. Sales Data) with external/unstructured data (i.e. weather, local events, social media information) in order to really understand a consumer. This allows companies to offer consumers the product that they want in the channel that they are shopping.
Deal Personalization is the next step in this progression. A few years ago companies worked off of averages. They used historical data on their marketplace and know the average redemption rate of a coupon at $1.00 off of at $0.50 off. After choosing the best deal, they would budget it and distribute the coupons. But not all consumers are motivated by the same deal. What if the company knew, based on consumers’ previous purchase behavior, which consumers require $1.00 off and which would make the purchase if they only got a $0.50 or even $0.25 deal? Assuming the company doesn’t lose sales, this pricing personalization can maximize top line sales and bottom line profits.
I’ve been doing some work with an IBM Partner on this: Exchange Solutions. They are doing some great work around “Smart Targeting.” This is basically Analytics Algorithms that understand individual consumers Price and Promotion elasticity across individual product. They have worked with major retailers to maximize sales and profitability. Combining this with the Big Data Analytics mentioned above, and companies can really achieve Consumer Personalization at 1 on 1 basis.
How could this be good for the consumer? S/He is potentially getting smaller deals on products that they buy. Marketing Personalization allows the consumer to get the product they actually want at a price that they are willing to pay. They no longer have to make due with whatever product is on sale. How many times have you really wanted to buy Coke and only Pepsi is on sale? If you are a Coke consumer, did you buy the Pepsi anyway, or did you wait a week? That week can represent lost sales to the retailer and a disappointed consumer!
Data Personalization is the future of marketing and it’s here today. Want to know more? Reach out to me!
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