Kennebec Valley Chamber

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Friday Report ~ June 26, 2015

Big Brother or a helping hand? - Did you know I was recently shopping online for an outdoor fireplace? If not, that’s weird. The internet clearly knows, and I am getting ads for fireplaces on every page that comes up! I am both impressed and disturbed by this.

It’s one thing to get an email from that prince in Nairobi who needs a place to hide his millions or that plea for help from your friend who got mugged overseas (I certainly hope that was fake). When I buy online tickets for a movie and then get blasted by Marvel Avenger memorabilia, I feel like my privacy has been slightly invaded. It is even more challenging to buy a surprise gift for your wife when you share the same computer and the ads start popping up.

So why is it happening? Because it works. Targeted internet marketing is one of the most productive tactics available today. Instead of blasting a region with ads for high heeled shoes, you can specifically target the people who recently looked at shoes and steer away from the guys who are shopping for chainsaws.

But what is happening behind the scenes is also kind of cool from a scientific standpoint, and it’s not just online. Almost every major retailer has a “predictive analytics” department. In fact, according to a NY Times article in 2012, Target gives every person a Guest ID that tracks your purchases, visits and online interactions to one file. The business side of this is genius. Here is a hypothetical scenario from that article:

Take a fictional Target shopper named Jenny Ward, who is 23, lives in Atlanta and in March bought cocoa-butter lotion, a purse large enough to double as a diaper bag, zinc and magnesium supplements and a bright blue rug. Predictive Analytics say that there is an 87 percent chance that she’s pregnant and that her delivery date is sometime in late August. What’s more, because of the data attached to her Guest ID number, Target knows how to trigger Jenny’s habits. They know that if she receives a coupon via e-mail, it will most likely cue her to buy online. They know that if she receives an ad in the mail on Friday, she frequently uses it on a weekend trip to the store. And they know that if they reward her with a printed receipt that entitles her to a free cup of Starbucks coffee, she’ll use it when she comes back again. The real success here is that if Target gets “Jenny” as a customer when she is pregnant, there is a VERY good chance she will shop there for many years to come.

Part of me is intrigued and would almost prefer that I don’t see ads for high heeled shoes when I am online. I certainly enjoy getting coupons for the things I buy and not for the ones I don’t. I compare this new science to the way Disney has mastered customer service and their ability to predict your needs and ensure your enjoyment. I will admit that it’s a little creepy that companies like Target have a file on me, but at the same time, I have nothing to hide, so why not?

I certainly am not suggesting that you hire a “predictive analyst” but I would suggest even the smallest of businesses in our region look at what your customer’s habits are and how you are reaching out to them. Are you handing out coupons to encourage a return visit? Are you keeping any sort of database on who is visiting your business and marketing in areas that the demographics support? You would be amazed at even the smallest statistics, like home address, and what they say about who is shopping with you. Marketing dollars are tight and you should watch where you spend them. If 80% of your customers are coming from other towns, you should review where you place your money.

After the initial “pregnancy predictions” were tested at Target, and one very angry father who put 2 and 2 together based on the coupons in the mail, (his daughter was in fact pregnant) they decided that it would be more successful if they simply sent out a booklet of coupons and threw in enough other items (lawn mower, patio furniture) as camouflage, no one would suspect and the coupons would get used. They were right. Sales went from 44 billion to 67 billion in 8 years, credited mainly to mom and baby growth.

So find out who is shopping with you. Take the time to figure out what it is they like, and provide it. Your competitors will if you don’t.