The first-party data landscape for many traditional CPG brands can be challenging as most brands lack possession of the transactional relationship that fuels consumer data and is often preserved by grocers and big-box retailers.
At the other end of the CPG spectrum are direct-to-consumer (DTC) brands that sell directly to their customers without relying on a retailer. Given the direct access to transactional data via customer connections, DTC marketers can more readily deliver individualized experiences through personalized offers, promotions and messaging.
In a marketplace where consumer relationships are gold, how can marketers narrow the divide between traditional CPG and DTC marketing?
The answer for solving this data disconnect: identity-based marketing.
Leveraging an identity-based platform is a key factor in delivering more engaging customer experiences with measurable results. An October 2019 Forrester Consulting study commissioned by Epsilon reported that “Today, only half of brands at best are capable of fundamental identity resolution capabilities like finding customers across devices, controlling messaging frequency and sequencing, and building a unified customer profile.”
With that in mind, let’s walk through the three key steps for CPG brands to leverage identity resolution for their own marketing programs.
Three key steps to identity resolution:
Step 1: Make identity resolution an enterprise-level priority
Putting identity at the center of an organization’s marketing initiatives is not a trend, it’s a business requirement. The same Forrester study further identified that the absence of coordination among various corporate silos “can exacerbate the measurement and performance problems… because it can lead to a lack of true understanding across teams. Brands with misaligned identity resolution are left with broken customer experiences, wasted marketing spend, and lost opportunities to expand customer relationships with relevant cross-sell and upsell offers.”
Think of the scenarios in which an inability to identify your consumer at the individual level wastes valuable marketing dollars:
- Promoting a product that’s irrelevant to the customer or prospect
- Featuring a product that someone’s already purchased
- Treating existing customers like new prospects
- Tailoring messages to the wrong person (e.g., a spouse) who shares the device
- Exposing someone to the same ad, over and over, across their devices
- Messaging someone after they’ve opted out of brand communications
Any of these scenarios can lead to not only to significant marketing inefficiencies but also result in a poor experience for the customer.
Step 2: Take steps toward personalization
Although it takes time and resources to build an identity platform from the ground up, leveraging data from identity-based partners gives brands access to real-time demographic, attitudinal, behavioral and transactional insights in the absence of their own first-party data.
For example, a CPG brand with a variety of meal-time solutions can customize messaging to individuals based on insights gleaned from an identity-based data source to:
- Identify an individual who entertains often and responds to messaging aimed at how to host the perfect party.
- Identify a millennial mom and infrequent brand buyer who might consider purchasing more of a product if she’s inspired by easy, kid-friendly recipes for lunches.
- Identify an individual who is a frequent purchaser of a competitive brand and might consider converting if they are served an incentive or offer that incites trial.
Some brands are already taking the initial steps in personalizing their messages through data. Conagra has put data at the heart of their media planning to better personalize their “always-on approach.” In leveraging a data solution, Conagra can be more strategic in what relevant offers and brand messages they send to their consumers.
Step 3: Focus on the quality of the data inputs to produce better outputs for measurement
Fewer than half of the marketers in Forrester’s research reported the ability to leverage identity resolution against online and offline marketing performance. The result: When the quality of the input cannot connect individual exposure to in-store sales, marketers are left with an inability to gain insights and drive better business solutions in the future.
Partners like Epsilon that employ an identity-based solution can often measure as much as 80% of the impressions served and connect those ad exposures to actual in store sales. Non-identity-based measurement solutions can typically only “see” 5-10% of impressions served and result in less reliable modeled attribution. Although many partners use this method, it’s not the most accurate way to measure a campaign’s effectiveness.
To help understand if a partner can provide the measurement you’re really looking for, ask these questions:
- What percentage of your impressions were matched to in-store sales?
- What dollar amount can be directly attributed to the impressions without modeling or extrapolating? I.e. What is the actual measured spend from your campaign?
In the end, organizations that shift focus towards identity-based marketing solutions end up with increased scale, less marketing waste and greater insights for activating future programs.