by Benoit Grouchko
The world of digital marketing presents an unprecedented opportunity for targeting. Particularly for retail marketers, advanced targeting is crucial, and can now include real-world and digital actions. Despite there being a treasure trove of targeting opportunity, at the end of the day it’s performance that tells you how well your tactics are working.
How do you measure if your targeting is relevant and working? Simply by looking at performance. Here are a few reasons why retail marketers should put their focus and resources on performance over everything.
Focusing on Performance Expands Your Reach
There are multiple factors and combinations that may make up the ideal consumer, but no two customers look the same. A targeting strategy that includes a narrow definition of the ideal buyer is missing out on a world of potential. Being overly discerning with targeting can certainly limit your reach by shrinking the pool of potential customers that you’re reaching. This is a scope problem.
Too much targeting can leave retail marketers with a limited reach. This scope problem is particularly evident for those marketers running exclusion and inclusion lists. For example, any form of “blacklisting” can cause you to miss out on a large segment of high-propensity consumers.
So even if you’re a retail marketer who knows your target customer to be within a certain age range, gender, and shopper profile, it’s easy to make the mistake of overly limiting your scope. While the cost per acquisition might be lower for consumers who fit certain profiles, retail marketers need performance strategies that scale. No matter what targeting is in play, the most important factor in any digital marketing strategy is to understand how that strategy stacks up to your KPIs and performance.
Human Bias Can Play Positively and Negatively
Marketers often build customer profiles through a combination of empirical and analytical observations. Any empirical model for building a customer profile is subject to human error and bias. As marketers, the profile we build for our target customer may not be the profile that performs best.
Humans tend to over simplify customer profiles down to easily observable or clearly defined traits (like age or gender). We are not as qualified at understanding patterns as we think we are, especially when these patterns are complex. In reality, an ideal consumer might be a semi-fluid and highly nuanced combination of characteristics with some traits being more heavily weighted than others. To get a complete customer profile, it’s necessary to fully flesh out every measurable data point and understand its impact on shopper propensity. Yet, this quickly becomes unwieldy. And marketers can lose vision of the ideal customer profile as it gets complicated.
Another way human bias plays into targeting is through anomalies. Humans tend to explain away anomalies through the lens of personal experience. That makes us prone to overlooking the data in favor of the story. Focusing on performance primarily gives you the insights to better target later.
Performance Keeps You Relevant
When the end goal is performance, you pay less attention to who your target customer once was, and more attention to building your reach to optimize for conversion. When you focus your targeting on segments that you know work, you’re living in the past. You’re optimizing for what used to work. Although it may still be useful, there’s a host of factors that can change your top performing audiences.
As brands change, so do customer profiles. Pop culture, seasonality, the age of ecommerce – all of these affect how people shop in-store. Using an approach that emphasizes targeting does not account for this real-world, real-time changes.
It’s an exciting time in the world of retail marketing. Marketers have so much data, tech, and opportunity for robust and precise targeting. But, at the end of the day, targeting is a means to an end. And too much of a good thing (targeting) can detract from retail marketers’ ultimate goal, which is performance. As long as marketers keep performance at the forefront of their retail marketing strategies, targeting is and will continue to be a boon to performance.