Customers are for life, not just for Christmas

Christmas Segments from VisualDNAMany brands and retailers face Christmas with both excitement and fear. Excitement for the possibilities of peak, and fear that seasonal discounting may hurt the bottom line.

In the run-up to Christmas, brands and retailers traditionally spend on marketing and discounting via generic festive messages they hope will convert enough potential buyers to beat the competition. But budgets could be spent far more effectively if it were possible to understand customers and prospects – and the Christmas buying experience they’re after.

People engage with Christmas shopping very differently: some have it all wrapped up by December 1, while others are still rushing around like headless turkeys on Christmas Eve. There’s Bargain Hunters who scour the web for the best deals, Family Shoppers who browse and browse to find perfect gifts for their nearest and dearest. There’s The Early Birds who enjoy a clinical Christmas and The Bohemians: those who buy big for a shock and awe season.

Conventional data might reveal what online customers are doing, where and when but it glosses over the fact that every consumer – offline and online – is a living, breathing human being with a lifetime of experiences and a distinctive set of character traits which shape their behaviour. Personality plays a huge role in governing how people respond to products, brands, advertising, promotions, onsite design, selection, pricing and much more besides.

If brands and retailers’ ultimate aim is to reach prospects on an emotional level – for Christmas or at any other time – then personality is vital information for advertisers to segment customers based on who they are, how they’ll shop, and what message will best resonate.

New approaches are now emerging that can provide a much broader picture of each online consumer, including insight into their psychology. As a result, a growing number of brands and retailers are now taking their first steps into a new world of market segmentation based on what truly motivates people and on what drives their purchasing behaviour. Researchers in psychology have spent decades building rich models based on the “Big Five” personality factors – Openness, Conscientiousness, Extraversion, Agreeableness and Neuroticism.

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Psychtech ‘outsiders’ challenge research insiders to change

This article was originally posted on research-live.com.

outsider

There are much better tools and theories to understand people today than there were in the years when focus groups, shopper panels and use and attitude studies were first devised. Big data allows us to capture observational truths as opposed to claims. And psychology has moved on from psychoanalysis and behaviourism, to decision theory and behavioural economics. 

This shouldn’t be news to anyone in the research industry.  But it’s also true that despite what is discussed in the research journals and blogs, industry insiders definitively lag outsiders in the tech industry when it comes to putting new advances to work.  Why is this?

Some, like Dr Benny Cheung, a director at Decision Technology, suggest many don’t understand the limitations of the old approaches and so don’t see the advantages of these emerging techniques.

“As psychologists we know that two key pillars of existing approaches to market research – asking consumers to extrapolate decision making outside of its natural context/environment, and asking them to tell us why they acted in a certain way – are both flawed. Humans simply are very poor at doing these things.”

People can’t explain their behaviour, but there are tests that can accurately measure an individual’s personality in terms of the ‘big five’ traits, which in turn can predict their future behaviour. [Read more…]