Consumer behaviour: An appetite for new insight

Understanding consumer behaviour is one of the most daunting tasks facing chief marketing officers today. New technology is creating a sea of data about who their customers are and what they’re doing, but CMOs risk drowning if they fail to get a grip on where the most useful information lies.

Even the humble TV is becoming an enormous mine for unearthing behavioural insights through ‘smart’ TV platforms, following the pervasive growth of internet-connected devices. Online connectivity and services like video on demand are repositioning the television as a hub for all forms of media consumption, and viewers’ usage habits are more trackable than ever.

Samsung and LG, for example, unveiled upgraded versions of their internet-connected sets at the influential Consumer Electronics Show in January, indicating a further push by smart TVs into interactive functions more often handled by smartphones and tablets. Meanwhile, BSkyB is preparing to roll out its AdSmart platform later this year, promising to serve different ads to different groups of households and to offer marketing insights based on viewing behaviour, while Channel 4 has a new set of data tools to interrogate its 6.5 million registered online users.

Jennelle Tilling, vice president of marketing at KFC UK and Ireland, welcomes the introduction of more sophisticated forms of behavioural targeting through traditional media. The fast food chain runs an extensive and complex TV advertising strategy throughout the year, which incorporates general brand messages, product-specific ads and spots aimed at different demographics. Tilling says she is interested in the potential of connected TV advertising platforms to match messages to specific consumers.

“The more targeted you can be the better,” she argues. “Because we generally run four layers of advertising at any one time, it’s exciting if I can have mums seeing one ad, young adults seeing another and teens viewing another – particularly as we have a constant flow of [advertising] work going out.”

TV viewing data can also provide behavioural insights into how likely viewers of Coronation Street or EastEnders are to shop at Asda rather than Tesco, for example.

But while Tilling is keen to adopt new technology to enable better targeting, she also reveals that KFC draws on time-tested research techniques when gathering its own behavioural data. For example, rather than running mass focus groups or surveys, the brand uses what Tilling calls “immersions”. Research teams observe a small group from a specific demographic, or a single family in an everyday situation, in order to get deeper insights into what makes them tick. “When people are actually with their family and kids they are much more likely to be open and honest,” she suggests.

Diary of lifestyle habits

In addition to immersions, KFC runs a ‘diary’ scheme in which it asks research subjects to keep a log of particular lifestyle habits and their thoughts and feelings around them. Tilling says these insights feed directly into KFC’s advertising. For example, its latest spot to promote its Family Feast meal was devised around the notion that mothers like to appear less domineering in front of their children at the weekend, making them more inclined to treat them.

“The idea is that on weekends, mums want to reverse the rules and let the kids be in charge,” she explains. “We’re saying that Family Feast is the best product we have in our range to enable mum to have that kind of feeling with her kids. And as you’d expect, there are lots of insights around value that go into it too, because of the recession.”

Anatoly Roytman, EMEA managing director of Accenture Interactive, says that marketers should not neglect these traditional techniques. He argues that some brands have become obsessed with thinking about what behavioural data they can collect from their own digital platforms, when they should be trying harder to understand the wider market of potential customers that haven’t even visited their website yet.

“Many companies think of themselves as the centre of the universe, where everybody has to come and visit their website even if they sell soap or shampoo,” Roytman says. “In other words, they think of themselves as a destination for their target audience of single mums or working mums or whoever it might be.

“That’s the wrong way to look at it: brands need to forget about this inside-out approach and look outside-in. That means considering the value that they can offer to make people engage with them in the first place.”

Matt Turner, vice president of marketing at Onefinestay.com, says that a crucial element of his job is to ensure that the business understands the needs of travellers who are looking for places to stay, as well as the hosts that use the site to let people rent their homes (see case study, see page 40). His challenge is to develop both sets of customers at the same rate, so that supply and demand are broadly matched.

However, Onefinestay holds much more personal information on hosts than it does about guests. For example, it knows hosts’ occupations, where they live, what their properties look like and their motivations for joining the service. Data on its guests is limited to the kind of information that people would provide when checking into a hotel, but rather than restricting the company, this simply means it must focus more on developing a behavioural, as opposed to a demographic, understanding of them.

“We’re able to target guests more as individuals and less as segments,” he says. “That’s simply because once they come to the website, we’re able to see what they’re doing, what properties they’re looking at and how they’re searching. Therefore once we continue the conversation, whether it’s off the website or still on Onefinestay, we’re able to provide them with messages that are specific to the types of properties they’re looking at.”

Map-based searches

He also points to the potential of using mobile behaviours such as map-based searching to identify localised marketing opportunities in New York and London, where the network of properties currently exists. “The more that we can bring our properties to the surface, particularly in those neighbourhoods that are under-served by hotels, the more we can present ourselves as a really interesting choice or option,” he says.

Roytman at Accenture Interactive argues that CMOs and senior marketers must become guardians of these rapidly growing behavioural data sources to ensure the right balance is struck between business goals and consumer needs. He suggests that the role of the CMO is changing into that of the “chief customer experience officer”, as brands increasingly target different consumer behaviours.

“This role is much more prominent than just marketing because it involves bringing together all the other departments that are involved in customer experience, including sales and service,” Roytman says. “Basically the CMO has to become a steward of the interchange between the consumer and the brand.”

Kimberly Kriss, senior vice president of marketing at AEG Europe, has put behavioural data at the heart of her strategy since joining the live events business last year. One consequence is that the company, which owns The O2 and other sport and music venues, has developed a technology system that uses ‘algorithmic audience modelling’ to create a single view of its customers across all channels. That includes an extensive “social listening” operation through which the company listens and responds to consumers on social media.

Kriss, who has previously worked for PepsiCo and Reebok, explains: “Many companies in the live events space get excited because they have a database of, say, 2 million customers and they believe it’s enough to send them a blanket email telling them Justin Bieber is in town. We’ve decided to adopt a model of understanding customer behaviour that goes beyond the transaction.

“So we’ve combined the knowledge we have of our customers from the transactional data with geo-, socio- and psychographic data to enrich our knowledge of what our customers are doing. That not only leads to more satisfaction and loyalty, but it allows us to be smarter with our marketing spend and capitalise on cross-selling opportunities.”

For example, AEG Europe has used this internal data monitoring system to devise British Summer Time: a new event that will take place in Hyde Park this summer. Kriss claims the 10-day festival, which will incorporate music concerts, poetry recitals, comedy and games, is a direct response to the huge amount of behavioural data the company has sourced and analysed.

“The event is going to be completely different because we’ve listened to what consumers are asking,” she adds. “It has come from doing in-depth research to understand how many festivals people have attended, the impact of the recession on attendance, what they didn’t like about festivals in the past, the kind of food they’re eating at those festivals, the kind of merchandise they bought and so on. We’re really starting to understand customers’ intimate behaviour.”

Similar insights are now available to brands in many industries, whether their business is primarily online or offline. But for virtually all of them it’s becoming more necessary to understand which types of behaviour are most important to track before taking a deep dive into the data.