It’s obvious that one of marketing’s widely used crutches – the segment-centric approach – isn’t up to the job anymore (but when was it ever). Given that the top 20% of customers typically represent 80% of the profits, companies cannot afford to treat people – especially their most valuable customers – as segments.

“I’m not a segment!”

Let’s not forget customers’ growing frustration with the way they are treated. For example, the websites of many retailers and brands take a one-size-fits-all approach – they offer a flood of options that cause many customers to simply abandon the pages and go elsewhere to get information or make a purchase, according to research from Accenture Interactive.

The same research tells us that half of the customers in the US and UK have never(!) bought something recommended to them on a retailer’s website. This is customers’ way of telling brands, “I’m not a segment!”

At the same time, people constantly share what they want and need. It’s in each of the choices they make, the products they buy, and the way they contact and comment on companies and brands.

Brands should hone their abilities to decode these interactions und use the information to the benefit of the customer. This is no longer just a matter of technology. Rather, it requires shifting the focus from the ‘What’ to the ‘Why’ – from identifying correlations of consumers’ socio-demographics and purchase histories to understanding motivations.

From customer segments to living profiles – and true personalization

Brands can accomplish this by getting from segments to individual, ‘living’ profiles of their customers.

Customers base their buying decisions on various aspects such as features, ratings and reviews, and brand name. These product attributes make up the product’s DNA.

In addition, each interaction a customer has with a brand (such as mobile app usage, email responses, social interactions, poll submissions, in-person events attended, etc.) is also characterized by descriptive attributes that shed light on their unique preferences, motivations and passions.

Combining attributes across all interactions creates a living profile of the most unique aspects of each individual as they evolve in real time.

For example, as a customer decides to purchase new clothing her living profile may reveal preferences for a casual fit, scoop neck shirts with motivational sayings, that are machine washable and also goes well with jeans.

This approach takes customer insight way beyond segments and the ‘people who bought, also bought’ logic. From here, it’s only small step to offering experiences to customers that are personalized in the true sense of the word, starting with recommendations that are much more accurate and relevant.

The opportunity, however, is much bigger. Think of offering what you know about your customers back to them, as a digital service acting like a personal assistant or shopper. Building living profiles of your customers can also help you drive innovation not just in marketing but in business, including the development of new products, services, and, most importantly, experiences.

Brands’ biggest battles for a place in customers’ lives and hearts are fought with experiences. And the best experiences are when a brand knows us better than we know ourselves – and makes it easier for us to engage with what we want on our terms versus theirs.

The author would like to thank Jeriad Zoghby, global personalization lead at Accenture Interactive, for his contribution to this post. 

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