Marketers are inundated with data of all sorts from many different sources. It is vital to have a clear vision of what data is really needed to design an effective marketing strategy and plan. And then one must be careful to find an accurate and reliable source of the data that is considered essential.
This two-part series will review these various issues and, hopefully, provide information that will help you prioritize the data you really need and what you should look for when sourcing the data.
The content of business and marketing media is heavily slanted toward the many options for gathering and using “big data.” Many suppliers of data and data analytical tools would have you believe that big data is the silver bullet, or “the be all, end all” that marketers need in order to perform their job well.
Of course, these vendors are understandably promoting a self-serving agenda. There is no question that big data can be very useful, but big data can really only provide a portion of the research that marketers of high-end products need in order to understand and effectively market to the affluent and luxury consumers.
And by the way, there is research demonstrating that affluent and luxury consumers are two distinct market segments that have only a little overlap. Many affluent consumers are not buying what most in the industry would consider to be true luxury products. In fact many affluent consumers — the 12.2 million wealthiest U.S. households based on a minimum $1 million net worth — have limited knowledge of the price points and brands of true luxury products.
Big data gives you the potential to track, step by step, the behavior of individuals online and in stores. With this data, you can try to deduce why they act the way they do. Of course, you don’t know for sure which of these people can afford your product. Many, if not most, may be either “luxury voyeurs” or “hopelessly aspirational” (two similar but different groups). This means you could easily be chasing people that cannot currently afford your product or service and others who may never be able to do so.
A New York Timesarticle about nine problems of big data merits your consideration.
It is only natural that marketers would be skeptical about whether the deductive conclusions derived from big data would be about people who could actually afford their product. And marketers might well doubt whether the historic actions of these people are reliable predictors of their future behavior.
Marketers need to know what their best prospects say is important to them and what the prospects say is their interest in and spending plans for both their product and that of their competitors.
To truly understand the consumer, marketers need to ask and listen to how people explain their thinking and their behavior. Of course marketers should focus on the people who can actually afford their product and might be persuaded to buy it.
This kind of insight into your target market is available through well-constructed surveys. Survey methodology is the subject of part two of this series, because much of current survey research among the affluent is based on a methodology that is of questionable accuracy and reliability.