Finding Your Best Customers in the Data

Finding Your Best Customers in the Data | The Sterling Woods Group

If you run a business, you probably think you know your ideal customers. You imagine the traits they have in common and why it is that they all adore your brand. You develop new products and services based on what you think they’ll like.

But where is this image of your ideal customer coming from? Is this something you’ve dreamed up, or did you create a sketch based on data you have on existing customers?

If you’ve conjured up this image from your own imagination and presuppositions, you could be missing some big pieces of the puzzle. Sometimes, our ideal customers surprise us. They behave in ways we couldn’t possibly predict, or they’re part of an unexpected demographic.

That’s why it’s critical that you create the image of your ideal customer based on actual data. It’s this data-based approach that allows you to speak most effectively to your actual best customers rather than talking to your dream customer. Let me share some examples of companies who have turned to customer data to craft a clear and compelling picture of their best customer and how it’s powered their organic growth.

Selling Posh Baby Bags to Regular Moms

Lily Jade sells premium leather totes, backpacks, and diaper bags for the mom on the go. The bags are not cheap; they retail in the $300 to $400 dollar range. Keeping in mind that price point, Lily Jade’s owners might be tempted to assume that their target customers are trendy, urban moms earning well into the six figures annually.

But when co-owners Meggan and Landon looked that the data, they discovered something different. Their best customers were, in fact, women they termed “Target moms”—customers one can usually find at Target, looking for a good bargain.

But they also value quality, and they see these high-end leather bags as an investment. Instead of buying a cheap vinyl bag that rips and needs to be replaced every few months, they’d rather spend more upfront for a quality bag that will last them until long after their little one is out of diapers.

Once the co-owners realized that their target customer was not who they might have assumed, they made business decisions aimed at providing the best possible customer experience for their “Target moms.” They introduced a Klarna payment option, allowing buyers to purchase the bags over four interest-free installments, instead of having to worry about throwing down hundreds of dollars all in one go.

Since making that change, they’ve seen their sales quadruple year over year. And they wouldn’t have known that price was a potential pain point for their customers if they hadn’t looked at the data to discover who their customers really were.

Making a Classic Luxury Brand Exciting for a New Audience

In the example above, we saw how a new brand spoke effectively to its target audience using customer data. But what if yours is an established brand, and you’re looking to open yourself up to new market opportunities?

The data still needs to guide you. Take, for example, the case of Häagen-Dazs. They’ve long enjoyed their position as the luxury ice cream brand, but several years ago, they began to worry that the brand was feeling outdated and out of touch.

Millennials, a much-coveted consumer group, reported that the brand felt old to them. They associated Häagen-Dazs with dessert at their fancy grandmother’s house; it wasn’t a brand they’d purchase themselves.

The Häagen-Dazs marketing team sprang into action. Using the word “Instagrammable” as their guidepost, they began to revamp the brand. They introduced new, brighter packaging that incorporated the brand’s signature burgundy color, but they also worked in “Millennial pink” and other colors aimed at a younger demographic.

Häagen-Dazs also redesigned its stores to make them feel fresh and trendy. The brand undertook testing with its existing customers, plus the Millennials it was hoping to attract, and found that the new look was popular with all.

When discussing the process of testing the new look, Jennifer Jorgensen (global brand director for Häagen-Dazs) revealed they had gone so far as to name their ideal Millennial customer, Lily. That name suggests there’s a lot of strong market data to back up their decisions. They’re not just aiming to attract a generic Millennial customer. Rather, they’ve created an ideal customer so specific that they’ve named her.

How to Find Your Ideal Customers

Now that you’ve seen how two businesses have successfully used data to better their brands, you hopefully feel inspired to give it a try at your organization! So where do you start?

The first step is to make sure you’re collecting data on your customers in an organized manner. The good news is that just about every digital marketing channel you use—from your website to Facebook and Instagram to Google Ads—has analytics baked in. The bad news is that all of that data can be overwhelming, and when it lives in disparate places, it’s unlikely ever to be useful.

So the first step is organizing all of your data. A customer data platform is a great place to start. These systems are designed to pull all of the information you have on each customer into one centralized location so that you have a complete picture of their behaviors and interactions with your brand.

Once you have a clear picture of who each customer is, you can begin to hone in on the shared characteristics of your best customers. Keep in mind that for many brands, there are a handful of ideal customer profiles—your fans aren’t one homogenous group! That’s where segmentation comes in.

Breaking your audience down by demographics (traits like age and gender), psychographics (shared attitudes and beliefs), behaviors (actions, like how they browse or buy), and geographics (where they’re located) allows you to establish a composite sketch of each of your ideal customers. After you’ve built this portrait of your ideal customer, it’s up to you to develop products, create marketing campaigns, and implement sales tactics that are most likely to get your desired results and grow revenue.

You may think that the first step to growing your business is creating a killer product or designing an eye-catching marketing campaign, but there’s something even more essential that must happen before all else. You have to understand who your customer is.

Without that fundamental understanding, you’re trying to reach a shadowy figure rather than a clearly drawn sketch of those most likely to love your brand and what you do. The only way to truly know these customers is to turn to your data for answers.

About the Sterling Woods Group, LLC

The Sterling Woods Group’s mission is to help clients make sense of their data to predictably grow sales. We apply data science to help you optimize your sales funnel, improve your marketing ROI, launch new products successfully, and enter new markets profitably.

We use a hypothesis-driven, data-supported methodology to discover insights that no one else is paying attention to. Then, we help you assemble the right sales strategies, marketing plans, technologies, and resources to seize this opportunity.

About the Author

Rob Ristagno, founder and CEO of the Sterling Woods Group, previously served as a senior executive at several digital media and e-commerce businesses, including as COO of America’s Test Kitchen. Starting his career at McKinsey, his focus has always been on embracing digital technology and data science to spur strategic growth.

Rob is the author of A Member is Worth a Thousand Visitors and is a regular keynote speaker at conferences around the world. He has been featured on ABC, NBC, CBS, Fox, and Digiday.

He holds degrees from the Harvard Business School and Dartmouth College and has taught at both Harvard and Boston College.

Rob lives outside Boston, MA with his wife, Kate; daughter, Leni; and black lab, Royce.