With more companies trying to catch up to Digital 3.0, the issue of audience identification becomes critical. Pre-pandemic versions of traditional customer segmentation have been set back by changes in the fortunes and preferences of the general population. A better way to go might be the more recent digital marketing development: personas.
The best way to explain the use of personas is through a hypothetical example. Suppose a new organic food startup – eCommerce-based – sets out to find its first round of customers. Disregard the normal cost prohibition about acquisition – it’s a necessary step and should be a major part of the retail budget. Before the pandemic, finding the right audience to promote the new company would have been fairly easy. At a demographic level, organic food breaks down along general lines for whites, Latinos, Asians, African-Americans, etc. Geographically, several studies say it breaks down into heavily Northeast and West Coast areas. On an income basis, organic food skews toward the higher-income groups.
So, pre-pandemic, retailers could literally order up the right customer segment from a digital audience provider like BlueKai or other partners that trade in anonymous customer records. Suppose that order looks like: “Can we see active shoppers in the New England region who earn more than $120,000 per household?” Further analysis might show that the audience requested overindexes on Facebook usage and daily regional newspapers like The Boston Globe and New Hampshire Union Leader. Before the pandemic, these were solid guides – reliable digital breadcrumbs that could serve a startup well. In January, the economy was solid and the unemployment rate was low.
Now, take that exact same situation on July 20, 2020. First of all, the salary requirement for the audience has become unreliable due to new unemployment dynamics. Second, the media consumption dynamics are skewed because consumers are getting information from social media and from retailers like CVS. And third, because organic food consumption and shopping has shifted to digital channels, it’s quite possible that other tactics can work well for acquisition.
Now let’s look at it from a persona perspective. Customer personas are important because they require the assigning of needs, values and preferences. Perhaps there’s an organic food shopper who is buying more products due to safety concerns. Maybe there’s a consumer who will only buy fresh food from the market. And maybe there’s a segment of this market that has a negative persona – the household that buys less organic food because it’s more expensive and they’re cutting costs. Unlike the audience segment approach, personas are as fluid as the market. And let’s face it: There has arguably never been a more fluid retailing market.
Persona identification can come from expensive market research or from digital marketing templates like the one HubSpot offers. But it should be noted that in the preceding exercise, personas match motivations. They get to the “why” behind the purchase. They assume absolutely nothing about the marketplace. Personas, from the shoppers’ perspectives, are earned just like reputations.
Here’s a live example that can be applied to the organic food startup, this one from PYMNTS. It’s a series of COVID-19 research studies that showed a bend toward health and virus avoidance as the deciding factor in retail behavior. One of the more recent COVID-19 trackers shows four shopper personas.
The first category is social shifters: consumers who have gone online to make retail purchases, but are most likely to return to physical stores and engage in activities outside. This would be far more effective in guiding a startup, because this shows there is a shopper who will buy products online during this portion of the pandemic lifecycle, but may switch later.
The second persona is safety shifters: those who have embraced digital channels and are more concerned about contracting the virus than other consumers. This tells the startup that some of their new customers are ordering online and will not come back until a vaccine is developed. This would also enable the startup to advertise to online consumers with confidence.
Thirdly, there are convenience shifters. These are consumers who put a premium on speed and convenience. This would be the second argument for advertising online and marketing heavily against this persona.
Fourth are the office shifters: consumers who have shifted to working from home and want to go back to office environments. It’s hard to tell where this would be useful to the organic food startup, but it also proves the utility of the first three personas.
As the newest form of audience identification, personas are not perfect. But they do provide a better read of the market than broad segmentation. Surveys and digital behavioral modeling can still be an important part of this identification, and research will always be an essential part. But as the pandemic rages on, consumers are a brand-new book – and personas could be the best way to read them.
Selected by Fintech Tube