Luma Partners’ Terry Kawaja had quite the provoking title for his presentation at the recent Association of National Advertisers' Masters of Marketing Conference:
“Fire Your CMO.”
Despite the alarming title, the always inspiring Kawaja had a good point. DTC brands are kicking traditional marketers’ &%$ because of a superior
distribution model built on convenience. More importantly though, they are succeeding because they prioritize collecting and growing their own intellectual capital. In other words, they are not afraid
to challenge deep-seated marketing myths about data. Perhaps the most egregious myths are the following:
- Consumers won’t give us information willingly, so we have to
buy it.
- Past-purchase data is enough for personalization.
- We have an effective segmentation strategy.
Let’s follow the DTC brands’ lead and do some myth-busting right here, shall we?
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"We have to buy consumers’ information, since they won’t
give us info willingly." DTC brands have proven all you have to do is ask and you shall receive — as long as you provide a strong value proposition in return, that
is. And that doesn’t mean just discounts. Value comes in many forms: a better experience, a shortcut to what the consumer wants, the offer of a great piece of content or just the
prospect of some fun.
There have been enough stats out there that prove consumers will and do provide information in exchange for value and an improved, more personalized
experience. AND they would rather give their information directly to brands they trust rather than to third- party aggregators and resellers who in turn offer their
information to anyone who will buy it.
"Past-purchase data is enough for personalization." DTC brands know that why someone purchased is much more
important than what they purchased. And now, we are heading into in the worst time of year for collecting this type of inferred past purchase “dirty data.”
I bought my friend a Viking shirt for Christmas, but you better not start showing this diehard Patriots fan Viking gear for the next six months.
Simply asking
“Is this a gift or for you?” “Friend or family?” and “Who is your favorite team?” avoids the risk of being annoying and even flat-out wrong. Brands can
turn what could have created a negative brand perception into a brand experience that “gets me” and has permission to continue the conversation with me in a relevant way.
The more a brand understands about WHY a purchase was made, the more the conversation can unfold in a mutually beneficial direction.
“We have an effective
segmentation strategy.” I’ve been spending a lot of time with brands recently, and the most consistent statement I’ve heard is “We really do not know our
customers.”
That’s because customers’ preferences change all the time. DTC brands understand that consumers’ motivations, preferences and
interests shift on a daily (maybe even hourly) basis.
Segmentation strategies that are built on annual demographic appends and past purchases just don’t work.
You no longer need to spend millions of dollars for an agency to tell you who your segments are. Instead, now brands can constantly “feed the machine” and analyze and interpret
direct sources of consumer data to define real-time targets and segments that drive real action. And that “in the moment” segmentation data can only be captured by asking consumers
directly.
So what does this all add up to? Let’s add another “D” to DTC: direct-to-consumer data. As it turns out, that “D” is the secret to DTC
success.
This is how brands can actually get to know their customers and prospects and deliver relevant messaging. It is how brands build consumer engagement, trust
and loyalty today.
How do they make all that happen? They just ask.