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January 18, 2018

A Blueprint for Using Audience Insights in Marketing Strategies

This article originally posted by Yes Lifestyle Marketing uncovers where marketers’ don’t understand their audience as well as they think and identifies ways to bridge those gaps. Team L&P LOVES it! We are taking down the stereotypes, cutting through the noise, and genuinely getting to know our audience. 

What marketers get wrong about each generation of consumers, and how they can revamp marketing strategies accordingly

Marketing initiatives are only as effective as the audience insights used to power them. Without accurate understanding of what
their target audiences expect across all channels, marketing becomes a shot in the dark.

Most marketers think they already know what different groups within their audience want and expect. But often, they rely
on stereotypes about consumer segments which might overgeneralize and lead them astray. For example, it’s common for
marketers to believe that Millennials and Centennials have ditched physical stores in favor of ecommerce, but the truth is
younger consumers still value a good brick-and-mortar experience.

Yes Lifecycle Marketing surveyed 300 marketers online and during the Shop.org conference in September of 2017 to uncover
exactly where marketers’ understanding of their audience falters, and identify ways to bridge those gaps.

One such gap uncovered by the survey was about personalization. Nine in 10 marketers report that they do not have the
capabilities to personalize marketing content in real time. Yet many consumers say they want and expect higher levels of
personalization — particularly Millennials and Centennials, who continue to gain purchasing power as more of them come of
age.

Overall, the gap between what marketers think their target audiences want and what consumers really want creates a missed
opportunity to engage and maximize ROI.

Marketers Are Confused About Generational Channel Preferences and Behavior

To better engage the various age groups that make up their target audiences, marketers must understand the expectations and
behaviors unique to consumers in each generation. Consumers today span a handful of generations that have vastly different
experiences and preferences for engaging with brands. Marketers must understand these nuances to maximize engagement
and conversions.

The Shop.org survey found that what marketers believe they understand about generational differences doesn’t quite match up
with what more than 1,000 consumers reported in Yes Lifecycle Marketing’s recent study “A Marketer’s Guide to Reaching Each
Consumer Generation.”

For the purposes of this report, we’ve defined the generations as follows: Centennials (age 18-21), Millennials (age 22-37),
Generation X (age 38-52) and Baby Boomers (age 53-71).

Price consciousness:

According to the Shop.org survey, marketers believe Centennials are the most price-conscious generation, with 29% ranking
them ahead of all other generations when it comes to price sensitivity. Marketers also ranked Baby Boomers last (only 9%
ranked Baby Boomers as most price-conscious).

However, the 1000-person consumer survey analyzed in its consumer study, “A Marketer’s Guide to Reaching Each Consumer
Generation” found that the opposite is true. Centennials are more likely than other generations to value quality over price. In
fact, 57% of Centennials said the quality is the most influential factor in their loyalty to brands, which ranked higher than price.
Boomers, by contrast, are most likely to make purchase decisions based on price – 62% said price influences their loyalty.

what marketers are getting wrong

Email:

Only 16% of marketers who say Millennials make up a large part of their audience believe Millennials are most influenced
by email when it comes to researching products prior to purchase. But Yes Lifecycle Marketing’s consumer study found
that Millennials, by far, find email more valuable than any other generation does. According to the consumer survey, 67% of
Millennials find email valuable when researching a purchase, compared to a 58% average across all generations.

influence of email by generation

Direct Mail:

Marketers are also wrong about the importance of direct mail. More than two-thirds (78%) say they believe direct mail is not
influential for any age group, and 53% say it’s not a top three channel for Baby Boomers. But according to the consumer survey,
56% of all consumers find direct mail influential when researching a purchase with 59% of Baby Boomers reporting that they
are influenced by this channel.

In-Store:

Marketers are also off about the value of brick-and-mortar. Eighty-two percent of marketers didn’t rank in-store among the
top three most influential channels for consumers. This is a missed opportunity especially for those targeting Centennials and
Millennials. The consumer study found that 81% of all consumers value the in-store experience when researching a purchase. And
nearly one in five (18%) Millennials and Centennials say they are loyal to brands because of quality in-store experiences. Further,
30% say they shop with retailers other than Amazon because they enjoy the in-store experience.

Ranking of channels

What Marketers Get Right

Loyalty:

Almost a quarter (22%) of marketers believe Millennials are more loyal than any other generation. This is consistent with
findings from Yes Lifecycle Marketing’s consumer report, which found that Millennials are more likely than any other
generation to say that their loyalty to a brand influenced their most recent purchase (70%). Additionally, the consumer report
found that 22% of Millennials consider rewards a major driver of brand loyalty, and 15% say rewards motivate them to make
purchases. This degree of loyalty is higher than any other generation.

brand loyalty

Social Media:

Nearly half of marketers (45%) whose target audience is largely made up of Millennials or Centennials say social media is the
most influential channel for those generations. This is consistent with the consumer report – both Millennials and Centennials
are significantly more likely than older generations to find social media valuable for their shopping journey. According to the
consumer study, half of Millennials and 42% of Centennials find social media valuable in researching a purchase, compared to
a 30% average across all age groups.

Personalization is key, especially for younger audiences, but markets are stuck on the basics

Personalization – the use of data to customize and add relevance to the way customers experience a brand – is another
way marketers can increase engagement among consumers of all ages. Personalization is especially important for brands
targeting younger generations. The consumer study found that 45% of Centennials and 49% of Millennials consider the level of
personalization within a brand’s emails influential when making purchases.

However, the Shop.org survey found that brands and retailers are still stuck on the simplest forms of personalization. Many are
missing opportunities to improve their efforts and therefore increase conversions.

About a quarter of marketers (27%) say they can execute basic personalization tactics like including a subscriber’s name
or birthday in an email. Another quarter (26%) can personalize based on additional data beyond name and email (such as
browsing history), but say it’s tedious.

And 17% have issues with collecting and analyzing data – they either haven’t started or lack the right tools to collect, analyze
and derive insights from their data. Just 11% claim they can personalize all content in real-time, indicating that about nine in
10 marketers have room for improvement.

Select the statement that best describes your current
ability to personalize marketing content.

personal content

There is nothing wrong with personalizing content using basic data points like name and birthday, but for marketers to stand
out, especially when it comes to Millennials and Centennials who have higher expectations, they must explore more advanced
options, such as personalizing by age or behavior.

Marketers have access to a wide variety of data about consumers. This information can help deepen their understanding of
who their audience is, which can nurture customer relationships and drive more conversions long-term.

Here are 9 standard types of data your brand can use to personalize marketing initiatives:

Additionally, triggered emails increase relevance by using specific milestones and behaviors to interact with subscribers. These
emails emphasize a brand’s knowledge of each subscriber and help build rapport in an age when consumers are bombarded
with blanket promotional content. Despite the fact that triggers account for only 2% of all marketing emails, they generate 10%
of all email-driven revenue, according to Yes Lifecycle Marketing data.

Triggers can be powered by lifecycle events like anniversaries, birthdays and loyalty milestones, browse behavior like
abandoning a cart and viewing specific products or transactional events like purchase completion, shipping notifications,
account changes, and more.

Marketers are right to prioritize email, but should supplement with other channels

Email continues to be a staple for marketers, even as social and mobile become more effective for reaching younger
generations. This makes sense as email drives significant revenue for marketers. In fact, every $1 spent on email marketing
generates an average of $38 in ROI.i And according to Yes Lifecycle Marketing’s consumer study, it is a major driver of
purchase decisions for consumers of all generations.

It might come as no surprise then that marketers identified email as one of their top three priorities this year, followed by web
and social. Nearly 9 in 10 (89%) marketing professionals surveyed at Shop.org listed email as one of their top three priorities
for 2018, with 45% designating it as their top priority.

Additionally, web was high on marketers’ priority list, which is good news for brands because consumers of all ages reported
that a brand’s website was important in their purchase decision process (80%). Social, however, should be tailored more
towards younger audiences. As noted previously, Millennials and Centennials are more likely to find social media influential in
purchase decisions than their older counterparts.

While marketers are on the right track when it comes to email, web and social, they are missing out on opportunities to
improve the in-store experience. A majority of consumers across generations (81%) said this channel was influential for their
purchase decisions, yet only 10% of marketers plan to prioritize it in 2018. Despite the growth of e-commerce in the past year,
many consumers still prefer to shop in-store (nearly two-thirds according to Pew Research).ii Many brands are finding success
by offering in-store experiences that veer from the norm.

Nordstrom, for example, opened several stores in 2017 that carry no actual merchandise, but instead focus on the experiential
component of in-store shopping by offering tailor services, wine, manicures and the ability to make orders while there.iii The
goal is to encourage customers to shop through a relaxing experience.

This approach can be tweaked given a brand’s target audience. A sporting goods retailer could offer shoppers the ability to test
shoes on a track or virtually swing golf clubs, for example. Alternatively, an art supplies store could host painting nights.

Marketers are missing an opportunity to personalize content based on demographic information

Given what we know about channel preferences for each generation, a clear opportunity emerges for brands to tailor marketing
content based on demographic data, particularly a consumer’s age group. However, according to the Shop.org survey, 41% of
marketers don’t personalize content based on age, period. Of those who do, two-thirds use email.

percent of respondents personalizing by age

Informing marketing content based on age can be challenging, but email is certainly the best channel for this tactic because it
is flexible, easy to test and drives significant revenue.

To tailor content to different generations, marketers can incorporate different subject lines, headers, featured products, and
even images that cater to a subscriber’s age group. The below example shows emails tailored to female consumers of different
ages. You’ll see that the content and imagery change slightly based on the subscriber’s age. An older recipient gets an image of
an older woman and email copy that broadly pertains to her unique reasons for following the brand. Additionally, the featured
products vary based on age.

Tips for reaching consumers by generation across all channels

Consumer habits across age groups vary dramatically. In “A Marketer’s Guide to Reaching Each Consumer Generation” Yes
Lifecycle Marketing found that Centennials are more interested in quality and experiences over price, Millennials are more loyal
than other generations and older generations are price conscious, and prefer more traditional channels. Additionally, the study
revealed that younger consumers are more likely to expect personalized content and be put off if marketers do not deliver on
this expectation.

Contrastingly, the survey of marketers at Shop.org revealed that brands’ beliefs about consumer preferences do not quite
align with what consumers report. That means many marketers are missing opportunities to better personalize content to
subscribers of different age groups and maximize conversions. Tips for marketers to reach each generation effectively include:

Centennials

Centennials value social media more than email. So supplement your email strategy with creative social media campaigns that draw attention and drive engagement. Since they also crave unique in-store experiences, offer them something of value instore that they can’t get digitally. For example, Netflix launched a campaign in 2016 that combined social media and in-store marketing to promote the launch of its new series, “Gilmore Girls: A Year in the Life.” The brand worked with coffee shops around the United States to recreate the coffee shop at the center of the show’s storyline. In addition, in any one of the pop up shops, consumers could scan coffee cups to gain access to exclusive Snapchat filters, created specifically to pay homage to the show.

Generation X

Generation X consumers do not expect personalization as much as their younger counterparts, so marketers can stick to the basics by personalizing components like first name and product recommendations. Still, Gen X-ers are a bit more tech savvy than Baby Boomers so they value email and are more inclined to shop on mobile devices. Old Navy does a great job of engaging Generation X subscribers with email coupons that can be easily redeemed in-store from a mobile device. In the following example, the subscriber is offered two clear options: click through to shop online or present the email to be scanned in-store (either via a mobile device or a physical printed copy).

Baby Boomers

Like Gen X, Boomers have low expectations for personalization and are more motivated by price. When communicating with this age group across all channels – from direct mail to in-store to email, marketers should make the offer very clear. The Bed Bath and Beyond email example clearly states the offer right away in the email, before diving into any more content. This approach to layout is key for Baby Boomers who might not have the interest or patience to search through a long email for the offer.

Additional Survey Findings

Goals for 2018

When asked about the primary goals of their marketing communications, 40% of marketers surveyed said driving revenue is
their top priority, followed by 24% who said they’re focused on acquiring new customers.

While driving revenue should always be a priority, it’s important to understand what marketing activities tend to be most
effective in driving revenue. Investing in getting to know their audience to better engage them is one of the best ways for
marketers to achieve bottom-line revenue objectives.

Technology priorities
When asked what they need from partners to improve marketing communications, 44% of respondents said they need
technology innovations, followed by 37% who said they need analytics services.

This data shows that marketers know they need innovative solutions that enable them to collect and analyze data to inform
their marketing strategies and seamlessly execute them. As consumers across all generations continue to expect crosschannel
interactions with brands – whether through email, social, direct mail or in-store – marketers will be smart to invest in
full-service partners offering end-to-end cross-channel marketing solutions that incorporate both technology and services to
help brands execute their vision and meet their business objectives.

Conclusion

Consumers today are consistently bombarded with marketing communications – from ads on the train on their morning
commute to hundreds of marketing emails a day to subtly promotional social media posts blended in with their newsfeeds.

To add more fuel to the fire, the age of a consumer significantly influences the way he or she will engage with a brand. Given
the rate at which technology has impacted marketing over the past few decades, older consumers have vastly different
preferences and comfort levels when it comes to technology than younger consumers do. Still, each generation is not always
what marketers might expect, so relying on stereotypes can lead brands astray.

Marketers who cut through the noise will be able to get to know their audience, anticipate their needs, and understand their
channel preferences and usage.

Sources

1 – https://www.mobilemarketer.com/news/study-email-marketing-revenue-hits-record-growth/445565/
2 – https://www.pewinternet.org/2016/12/19/online-shopping-and-purchasing-preferences/
3 – https://www.cnbc.com/2017/09/11/nordstrom-to-roll-out-small-nordstrom-local-shops-with-no-inventory.html

About Yes Lifecycle Marketing

Yes Lifecycle Marketing generates superior results by turning data into action through its cross-channel marketing platform
Yesmail360i and expert agency services. By combining technology and professional expertise, we transform brands into true
insights-driven businesses and empower them to make better, smarter, and faster decisions.
877.937.6245