The 4 Levels of Customer Understanding

As a marketer, nothing is more rewarding or lucrative than knowing exactly who your customers are, and being able to provide them with what they want, when they want it, and how they want it.

Achieving this type of business-to-customer relationship requires a significant amount of data-driven intelligence, as well as the willingness to embrace new advances in marketing and data management technologies. According to Teradata, just 18% of marketers say they have a single, integrated view of customer actions.

Some businesses are able to thrive by understanding their customers on a granular level, while others struggle to paint a picture beyond simple demographic data. One fact, however, is abundantly clear: the more brands learn about their customers’ identities, the more effective they are at marketing to said customers.

Let’s explore the four different levels of customer understanding, and dig into how organizations can break through the identity barrier to market to consumers in a more individualized fashion.

Basic User Understanding

At this level, organizations know almost nothing about their customers, and have not been able to get past the identity barrier. Customer data is limited to email addresses, and the data acquisition strategy basically boils down to either an email newsletter signup page, or the purchase of information from third-party data brokers. There is no real way to effectively target customers with relevant marketing messaging. In terms of database infrastructure, all customer data sits in different silos — one for email, one for mobile, etc. — which prevents the achievement of a single customer view.

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Basic Identity Understanding

This is the first level of customer understanding where brands are able to break through the identity barrier. By leveraging an acquisition strategy revolving around either traditional site registration or social authentication, organizations are able to capture, at the very least, demographic data. Users can be targeted with marketing messages based on age, gender, location, and perhaps a few other basic data points. Database infrastructure is unified, and the separation of customer data into silos is no longer a concern.

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Sophisticated Identity Understanding

At this level, customer profiles are much more extensive, and include demographic, social graph, and transactional data. Data is acquired via registration flows, social login options, and customer loyalty programs. The customer experience is much more personalized, and users can be targeted based on factors such as purchase history, detailed site preferences, or social profile information. Customer data is stored in an advanced database built with a dynamic-schema structure that is capable of normalizing both relational and unstructured data. All user data is kept private, in compliance with social network terms of service, and automatically up-to-date.

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True 1:1 Relationship

Finally, we’ve arrived at every marketer’s dream level of customer understanding. In this scenario, businesses are able to build complete customer profiles with demographic, social, transactional, and behavioral data, all while respecting user privacy. User data is compiled from registration fields, social profiles, onsite engagement tools such as comment feeds and product reviews, and supplemented with audience-based media buys. In addition to utilizing a dynamic-schema, the database is fully connected to existing marketing tools such as eCommerce platforms, email service providers, and recommendation engines for seamless data export. The level of customer understanding is so clear, that individuals can be targeted in real-time with optimized marketing messaging. For example, a user can automatically receive a push notification when a clothing item manufactured by his or her favorite brand comes available in the user’s size.

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The establishment of 1:1 relationships with customers and the creation of truly personalized user experiences are becoming more and more essential for businesses every day. According to Digital Trends, 73% of consumers prefer to do business with brands that use personal information to make their shopping experiences more relevant.

To learn more about how brands are taking advantage of new technologies to cross the identity barrier, download our free eBook “Achieving A Single Customer View: The Holy Grail for Marketers.”

– Reeyaz Hamirani, Corporate Communications Manager
@Reeyaz21

By Reeyaz Hamirani