• by Neil Rosen , July 10, 2012

You’re hearing it here, if not first, then at least loud and clear: demographic data is dead. Over. Fini. And that’s great news for customer relationship management!

Marketers used to collect amazing amounts of demographic data in an effort to better serve their customers. Known as target marketing, or market segmentation, this approach focused on information about specific groups of people. Demographic profiles narrowed groups of customers into a series of traits that included …

• gender
• race
• age
• income
• mobility
• location
• home ownership
• and many, many more refined categories.

And that worked well for a very long time. It certainly offered massive advantages over non-segmentation. You didn’t market geriatric products to the under-30 segment, or home-heating systems to renters. Email marketing companies began offering better and better segmentation to their clients, and even search marketing got in on the act. 

Demographic segmentation was a necessary step in the evolution of customer relationship management; but we’ve gone beyond it now, leaving demographic data behind in favor of the use of live data.

What exactly am I talking about? Live data is the information that your customers are giving you on an ongoing basis that will help you market to them more effectively. We’ve borrowed the term from information technology, where it referred to actual data employed during testing—as opposed to fictionalized “test” data. And in a way, demographic data really is test data: it makes assumptions about people based on a few known factors about them. 

But assumptions don’t make for good CRM. Let’s look at the examples I gave above, the consideration of marketing geriatric products to the under-30 segment, or home-heating systems to renters. What if a 28 year old is taking care of his aging parents? What if a renter is deciding whether or not to buy a certain house based on the price of a new home heating system? The demographic data you used for customer segmentation would have lost those sales—and those opportunities for good customer relations.

Live data gives you myriad opportunities for the best possible customer interactions, because you are responding to your customers, not the other way around. Live data is all about customer actions—customers who click on a link, who open an email, who visit a page on a website, who abandon a shopping cart, who make a purchase, who leave a comment. This is the data that you really need: it’s a constant stream of very specific information about very specific customers, and should trigger an immediate response from you, the marketer.

And live data enables chatter marketing, which—as I often argue—is precisely what puts the relationship back into CRM. Chatter marketing is the execution of live data: it’s that immediate response to something that your customer did, wrote, said, responded to, looked up, communicated. 

It’s up to you, of course, to be prepared to analyze and respond to the live data as it comes in. 

Live data was historically the bread-and-butter of traditional offline customer relations. Shopkeepers knew their customers, their likes and dislikes, what they might be tempted to buy, how to keep them happy—and how to soothe them when they were disappointed. That’s brilliant use of live data. It’s been trickier in the online world, but it’s still just as relevant, and we now have myriad sources from which to obtain this data: through our customers’ actions and participation in social media forums and sites, through customers’ actions on our own websites, and through customers’ responses to email marketing.

Note that it’s all about what the customer does. That’s the crux of chatter marketing, and the central tenet of great CRM as well. Being aware of and responsive to what your customer does and needs is the best way to make sales … and keep your customers happy through your use of live data in chatter marketing.