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Drilling down to individual consumer segments

(Photo: Flickr user Bruce Stockwell)

Whether you’re working in the food retail, restaurant or consumer packaged goods industry, customization and personalization are likely terms you’ve heard before. In fact, personalization has become a hot topic across many industries, and to achieve personalization, companies must first think about targeting different consumer segments.

For retailers, restaurants and manufacturers to really achieve consumer segmentation, it’s all about building data into “segments of one,” according to Jed Alpert, vice president of marketing for 1010data. To do this, companies need to collect as much data as possible, which is becoming easier thanks to today’s technology. Once that data is captured, it can be used to define customers as individual segments.

“Build an individual model, an individual forecast for every single one of your customers,” Alpert said. “All of that data can be used to build a complete profile of that person, and ultimately get down to that segment of one.”

Defining consumers in this way and delivering one-to-one marketing not only gives companies insights into how consumers are going to interact with their own businesses, but it can also help them understand how consumers interact with competitors and businesses outside their industry, according to Alpert. And it is creating a complete picture of who their individual customers are that allows retailers and other businesses to really send out targeted marketing messages.

“All of that goes into the need for retailers to really understand who their customer is and how to reach them,” he said.

A key component to having the ability to define and target customers is to figure out how data from different channels works together to create a whole picture of a consumer, said Hillary Ashton, vice president of customer analytics, marketing and pre-sales for Manthan. She said that retailers, restaurants and CPG manufacturers are good at collecting data that comes from different channels like social listening, relationship management and e-mail, but they have to take it a step further to really get through to individual consumer segments.

“Trying to be relevant to that consumer is not just going through a single channel, but understanding social context of the broader customer,” Ashton said. “So what are they doing in other places? What are they talking about? And then leveraging that information, making sense of that information…to be able to understand what they really mean.”

The important part, Ashton said, is figuring out whether consumers like your product and the reasons behind that. And sometimes, thinking outside the box can really help companies drill down to find that information and tailor their businesses to be relevant to different groups of consumers.

That’s how one new and innovative concept, Sampling Lab, came about.

The storefront in Portland, Ore., was created by Jeff Davis to give CPG brands a new and innovative way to find out how their products resonate with a specific consumer segment. For brands, Sampling Lab serves as an out-of-the-box marketing tactic, while for consumers, it’s a way for them to try different products out for free.

“Sampling Lab is far more than a place to just hand out free stuff. I want brands to think of us when they’re launching a new product or doing research on a new product,” Davis said. “No one else is doing sampling and feedback the way we’re doing it.”

Davis launched Sampling Lab as a way to help CPG brands figure out how to target millennial consumers in particular, but Davis said that since the concept launched in November, it has drawn many different types of consumers. As of the end of last year, Sampling Lab had nearly 4,000 members that the company drew in through mostly word of mouth marketing and social media. Members get to take home products from Sampling Lab’s storefront and once they’ve used them, they must answer surveys developed in collaboration with the brands before they can return to try another product. Brands, who are mostly testing food items, pay a fee to to put their products in the store for about a month.

Davis said that he came up with the idea for Sampling Lab because he found traditional sampling methods to be “a missed opportunity” for brands looking to target specific segments of consumers. Traditional store sampling does not allow for consumers to give brands feedback on their products, so it’s not the learning experience it could be, he said.

This is especially true of millennial consumers, who make up about 75% of Sampling Lab’s member base, according to Davis. He said that millennials are interested in trying new things and sharing their feedback, especially with so many channels at their fingertips, so part of Sampling Lab’s goal is to give them a forum for their feedback so that brands will hear it and learn from it.

“The fact that the brands are in our store sends a message to consumers that the brands are anxious to listen to them,” Davis said. “Consumers want to voice [their opinion], they like to voice it and they’re looking for different ways to do it.”

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