The Coming Consumer Revolution

You might not realize it but there is a huge shift happening in the world of digital analytics. For years people in this industry agonized over visits and page views and extrapolated behavior from these markers of engagement. This made it difficult to understand consumer behavior because it was so fragmented. But all this is about to change. 

 
Companies have always collected consumer information. Demographic marketing areas, zip code data, and income levels – none of this is new. What is new is the sheer amount of online "big data" swirling around that is just now starting to become connected to individual consumers instead of households or zip codes. 

Before, offline personas did not match online behavior, but that has changed. Companies know much more about you than you realize. So, what does this mean? We’ll see this the effects take shape in various ways:

1. Consumers will Game the System.
If you've ever shopped on an ecommerce site, put an item in your cart and not bought it in hopes of receiving a coupon to help convince you to purchase, then you've gamed the system. My husband recently had a similar experience on Amazon when he put an item in his cart, went to a competitor to check pricing and, suddenly the Amazon price dropped to be lower than the competition. As corporations try to more tightly control consumer behavior, consumers will quickly figure out these controls and use them to their advantage. 

2. Consumers will become stronger Partners.
I am not a big fan of sharing my data. In fact, I'm probably more resistant than most because I know how valuable it is, so I typically won't give it away unless the exchange is worth it to me. However, when a site like BlueKai presents me with all the information that's been aggregated about me, my desire is not to blow it away, but to reasonably correct it. My theory is that if I correct it, good things may come to me. I want Nike to know I'm a fan of their shoes but that I think their women's clothing is unoriginal. I want K2 to know I love their skis but I haven't bought a new pair in several years. I want them to know this because I want to be treated as special by these brands. And why not?

3. Companies will be more selective.
In a unified data world, a company might realize that their best buyers with the most lifetime value are actually in select zip codes. Why run specials in all geographic locations when there is an opportunity to be more surgical? Or even better, why not just specifically invite these high-value consumers to come in? An early example of this can be found at casinos who mine their customer databases for the high spenders and then attach personal sales reps to each one to individually call and invite these folks to come back along with free rooms, dinners, etc. Could you imagine being such a valuable consumer of say, United Airlines travel that they would pick you up and personally drive you to the airport? As companies slice the data, I believe "surgical service" for high value consumers will become part of the marketing game. 

4. Consumers will be pressured to stick with brands.
Once companies have identified you as valuable, and started to sweeten the benefits you receive, it will become harder to switch, assuming the consumer continues to find value in these benefits. And that will put more pressure on companies to keep you until they reach a point of optimization where the value you bring in (say your purchases over one year) does not exceed the cost of keeping you. Then the pressure switches back to the consumer to stay in the high-value zone or accept fewer benefits.  


Companies have more to gain than they realize by becoming more transparent with their consumers about how they market to them and what they know. Consumers have more to gain as well. Beneath it all is the overarching need for transparency and that's only a matter of time.