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BizReport : Advertising : November 12, 2013


Expert advises: Know your customers this holiday season

In retail, data has become a huge influence in how campaigns are created and how ad space is purchased. Still, there is a lag between truly engaging campaigns and customers - and that lag in many cases is due to inferior targeting, according to one expert.

by Kristina Knight

Kristina: Timing optimization - we know Tuesdays and Fridays are generally the best days to send out email offers, but does this change around Cyber Monday? For this particular retail event, is Saturday better than Friday? Does the optimum time of the day change as well, particular given that many people are shopping from their office?

Jerry Jao, Co-Founder & CEO, Retention Science: We think Cyber Monday (or even the Holidays in general), the days might matter less since it's about the deals you provide. The savvy customers will be looking out for the best deals and since most merchants have those deals for 12 hours, 24 hours, 2 days, or while supply last, the day of the week will matter less vs. how much inventory you have left. More importantly, if it's a Cyber Monday sale, you will at the most send out a sneak peak the weekend before, but the actual sale still does not go on until Monday, so measuring whether or not Tue or Fri works better is less relevant for these day-specific type of campaigns.

Kristina: Should retailers design different offers for different demographics during the holidays? If so, what's the ideal way to do this?

Jerry: The ideal way to set up your offer strategy would be to implement a Probability-to-Purchase model for each of your customers/subscribers. Once you've identified the segment with high to moderate purchasing intent you'll need to determine which of two strategies is best for your business. (and you can use Retention Science for this specific need, while most businesses will not be able to do this in-house). You can either maximize margins by reducing the discounts that the group will receive or maximize the number of conversions by delivering them the richest discounts.

Kristina: What about small retailers who may not have the resources to dig deeply into customer data?

Jerry: For retailers without the resources to determine real-time purchasing intent, there are less sophisticated ways of establishing an offer strategy for this holiday season. Segmentation based on past purchase history can help to identify the level of discount needed to entice a conversion. For example, customers that have only made discounted purchases will probably require a richer offer over the holidays while a customer that purchases new arrivals will probably need a lesser offer to convert.
If 1-to-1 communication is not possible for this holiday season, simple segmentation will still prove more effective than a blanketed approach across your entire customer base.

You can read part one of my chat with Jerry, including how to engage deal-conscious shoppers, here.






Image via Shutterstock

Tags: ad targeting, audience segmentation, Retention Science, targeted ad campaign








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