In our previous blog post, we discussed the importance of being customer-centric, and outlined some approaches to help you learn more about your customers.
Your next step is to put what you know — or rather, what you think you know — to the test. Until you do, you can’t truly say you know or understand your customers; all you have is a hypothesis.
Use what you know: Test with customer segments
If you’ve begun to implement customer profiles, as discussed in “Why you need to know your customers better — and how to do it,” you should have a good basis for your hypothesis. Your segments might look something like this:
• Fashionable Frankie: A high-income, high-fashion trendsetter, Frankie wants the hottest new items right away. She’s stylish, into bold colors and the latest trends; she’s charming and confident, and fashionable.
• Savvy Suzie: Suzie is casual, feminine and social. She likes to look stylish, but doesn’t need the latest fashions right away; she keeps her budget in mind and is patient enough to wait until what she wants is on sale.
• Consistent Katie: Katie is cool, likes to be in charge, and likes tradition styles — that will stand the test of time.
You believe these are your three shoppers but how do you confirm this hypothesis is correct?
Test your customer profile hypothesis: Setting up the test
Product attributes, at their simplest, are the characteristics of a product, such as fabric or color.
Customer attributes, on the other hand, define your customer, such as their preference for trendy or traditional fashion, or lifestyle casual versus active.
The mix of product and customer attributes help you determine how much of a product to buy. For example, for Frankie, Suzie and Katie, you may want to buy 50% fashion colors, 35% black, and 15% white. The more attributes you add — based on lifestyle (casual/work/active), textile (wool, cotton), style (v-neck, crew-neck), style (urban, traditional) etc. — the more you can refine what you buy.
Next, you’ll want to correlate the products with the sales channels that best deliver the right product to the right customer. Fashionable Frankie wants the latest and greatest right away and will be visiting your online store to find it; Savvy Suzie segment is more comfortable shopping in-store.
This understanding of what customers like in products as well as what they value when shopping leads to a more accurate merchandise mix — and to better, more targeted marketing and promotional campaigns, which we’ll talk about next.
The more attributes you add to your product database and correlate to your customer segments, the more effective your buying and planning will become.
Quantifying results: How to measure your test
A test isn’t worth much if you can’t measure the results and analyze them to see whether or not you’re correct and what areas still need improvement: Are you ordering the right mix, and assorting the right items to the right channels?
At this point you’ll need your planners to help you analyze the data and see if your percentages are right.
Confirm you know your customers: Executing the test
With your website, e-commerce platform and marketing automation solutions, it’s a snap to target specific messages to different segments. Simply prepare specific email messages and promotions to each group.
• For Fashionable Frankie, your message may be a sneak preview of upcoming fashions, and a specific date when your newest line is set to launch.
• For Savvy Suzie, the next sale or promo is what she wants to know about.
• For Consistent Katie, a “what’s new” approach should catch her eye — as long as you highlight the latest fashions in her color of choice.
This is a great short-term approach that helps confirm your hypotheses and a short period of time; you can also spread these same messages across different channels —such as social media or even direct mail — to test further.
Iterate and improve over time
Ensure you know your customers by segmenting them, adding product attributes accordingly, and implementing a targeted marketing approach. Once you have these processes in place, then you’ll have the opportunity to refine them and continually improve your planning and buying, delivering even more personalized shopping experiences that surprise and delight your customers.