Increase Your Returns with a Customer Model
Background
According to Gartner's CMO Spend Survey 2019-2020, CMO's plan to spend, on average, 16.0% of their budget on Marketing Analytics and 13.2% of their budget Marketing Research and competitive insights.
In total, CMO's are spending ~30% on increasing their decision-making capacity.
It shouldn't, therefore, be surprising that the same study showed that 81% of marketing leaders expect data to influence the majority of their decisions by 2020.
Unfortunately, it seems that most CMO's perceive their analytics capabilities as underdeveloped.
Gartner found that "marketers continue, at least for now, to invest in the foundations of their analytics programs. There are indications that those investments are showing returns. Although in-house teams continue to spend significant time on basic data tasks such as data management, integration, and formatting, there has been a marked increase in the past year in more advanced activities and skill development."
Based on their continued investments on the basics, CMOs seem to feel that they are not able to realize an adequate return on their research spend.
From my experience, robust, well-functioning analytics technology, a strong team, and making research a priority, does necessarily translate into actionable customer insights.
Data, no matter how pretty graphs make it, is still just data without a powerful customer model to turn data into returns.
Further, I believe it is possible to know your customers so well that high performing creative almost writes itself, new customer tribes reveal themselves, and your team's work becomes more fulfilling.
Extreme results require a unique approach with which you may be unfamiliar.
For example, if you're a marketer and you want to improve the performance of your campaigns, you typically turn to optimization. You might try different headlines, images, button colors, or an entirely new design. If all that fails, you might look for a guru to throw some best practices at you.
I believe the best marketing gurus are your customers, and if you ask the right questions, no one's going to give you better advice.
Unfortunately, you can't just ask them directly, that's a classic recipe for failure. Most people are not self-aware enough to give you an accurate answer. As humans, we are terrible at knowing what we will buy and why we bought it. The reason: most of our motivations and purchase behavior are subconscious.
However, I believe there is a way to learn about your customers in such a way that you can accurately and reliably predict their purchase behavior.
What you will learn in this post
In this post, I will attempt to share the following:
My specific definition of a customer model
Why I believe a customer model is useful
How I use my Cognitive Customer Model
Why the model works.
How my customer model differs from other persona-based approaches.
How my Cognitive Customer Model might be useful to you in your marketing work.
My specific definition of a customer model
For this discussion, I will use a specific definition of a customer model: a customer model is a representation of the particular beliefs of a customer or prospect that are key to their purchase decisions.
How do models differ?
There are many approaches to modeling prospects and customers.
Models typically differ in the following ways:
Scale
Ability to Integrate into Tech
Ability to Integrate into other Frameworks
Scale
Some models focus narrowly on a sub-segment, and some attempt to apply more broadly by addressing the entirety of a company's market. I designed my customer model to scale flexibly from very narrow customer sub-sub segments to include all prospect & customer segments a business might address. If you are building a model from scratch, I highly recommend doing the same as it tends to future proof your model.
Ability to Integrate
In general, most customer models are what I call "implicit." That is, they only really exist in the minds of the CEO or marketing team. This difference can lead to a lot of trouble when people have different but unspoken beliefs about customers.
Sometimes customer models are codified in design briefs. Occasionally, you will find customer models integrated into spreadsheets or embedded into analytics applications.
I have been very intentional about designing my Cognitive Customer Model using structure (i.e., schema) that is easily integrated into technology. I have historically used a spreadsheet. This approach has allowed my teams to access the information, debate differences of opinion, leverage our collective beliefs in our decisions, and to update our operating assumptions about the customer in real-time.
Framework Integration
Some customer models don't adapt well to other frameworks used in a company. This lack of interoperability is particularly noticeable when there is a desire to connect to financials.
I think there is substantial value in making sure your model integrates nicely with other frameworks. From the beginning, I made sure that my Customer Model worked with my other models (e.g., my Purchase Consideration Model, my Creative Testing Framework, my End-to-End Customer Purchase Model, and my Inclusive Marketing Team Management Framework).
When used with other frameworks, my Customer Model and yours become a powerful platform to manage a marketing team & rapidly increase returns.
Why I believe a customer model is useful
I have found that using a customer model fundamentally improved my marketing. Its impact is broadly felt in my every marketing decision and creative idea. Specifically, a customer model does the following:
Creates a knowledge platform for collecting team intelligence.
Provides insight that inspires new creative & product ideas
Team Intelligence Platform
You know a lot about your customers. Now go try to explain all that you know to a coworker.
I have found myself in that and similar situations far too many times. I wanted to explain, for example, what causes a parent to buy a specific toy for their child to a coworker, and all I could rely upon was a vague analogy.
That's a missed opportunity.
If you have a lot of experience with a customer segment, your insight is extremely valuable to your team.
For example, you need to launch a new campaign, how is your team going to leverage your experience? How is the group going to leverage each other's intelligence?
A good customer model provides a central location where everyone's customer knowledge can be housed, debated, and refined.
Creative & Product Inspiration
Ideation for creative and new products is a challenge every marketer faces.
Typically, a planning or brainstorm meeting is scheduled, and people debate ideas back and forth. "Well, customers typically like this… and don't like this… and these colors usually do well…" or "Last year we did this, and the return was substantial."
This unguided, collective approach can work, but it lacks two characteristics I believe are essential:
Objective, customer-informed guidance
Contribution to the collective customer understanding
Objective, Customer-Informed Guidance
Before using a customer model, creating a campaign felt like trial-and-error.
I had seen what worked in the past. Still, I didn't know how to use that information in any meaningful way, so my campaigns became variations on my original campaign, which means, I wasn't getting any truly fascinating new ideas.
Even if I learned what worked, I didn't understand "the why" and so I never really understand why customers we acting the way they did.
Since using my Cognitive Customer Model, I've come to realize that success in marketing is either luck or it's knowing your customer's unconscious.
A good customer model provides objective, customer-informed guidance because it helps you understand why a customer is behaving in a particular way. With this information, you can predict all sorts of other behavior:
Which existing creative in the pipeline has a high likelihood of success?
Through what other media, can we be looking for prospects?
What other product features and new products could be exciting?
What other new sources of prospect tribes can we address?
Taken together, a good customer model gives you the power to generate ideas for new, high-potential creative due to:
Greater reach through the discovery of new customer tribes
Increased creative & campaign success through better designs & collaboration
And happier and more fulfilled teams through greater participation
Contribution to the collective customer understanding
Your knowledge contributes to your ideas, so too, your ideas have the potential to expand your knowledge.
If you frame your creative as a test of some aspect of your customer model, the results of your campaign can validate the assumptions you've made about your customers and prospects.
With each campaign, you gain more and more insights that have the potential to create outsized returns.
How I use my customer model
Neuroscience, in the form of neuromarketing, provides marketers with unprecedented decision making power.
The challenge with neuromarketing is that there multiple neuro & cognitive models used by different marketers. Further, different situations call for different models. What works to optimize for UX isn't necessarily the most effective model for marketing.
Over the last 12+ years of refinement, I have found that the most effective way of structuring the model is at the level of the beliefs. At this level, the model works like this:
Roles > Relationships > Goals > Skills > Desired Feelings > Marketing
Here's the model in more detail.
Roles
We all born into the world playing specific roles:
Human
Daughter
Sister
The choices we've made in the past further influences the roles we take on. For example, if we have kids, we now take on the role of parent. If we decided to get a job, we take on the role of employee.
Relationships & Goals
Each of those roles brings with it a particular set of goals concerning various aspects of our lives.
For example, as a parent, I might have the following goals in relation to my child:
Guide my child
Protect my child
Educate my child
Love my child
Inspire my child
Each of these goals is important at different times, and they are contextual. So protection might mean different things in a car versus at a park.
Attributes & Skills
Each contextualized goal has attributes or skills that are needed to accomplish it.
For example, to protect my child at the park, I may need:
Physical strength
Awareness
The wealth required to purchase a cell phone
Knowledge of CPR
Desired Feelings
Each of these attributes or skills brings with it a certain desired feeling. For example, the need to be physically strong to ward off a potential creep brings with it the desire to "feel strong" or perhaps the desire to "feel in control."
Marketing Starts Here...
Once we understand a customer or prospects desired feelings, we can effectively market to them.
After all, marketers do not sell products. They sell feelings in the shape of products.
Therefore, it is our job, with our campaigns, to remind customers of their desire to feel these feelings.
Using this model, you, as a marketer, have an exact road map to inspire a purchase. If you can show the customer how your product & creative can authentically elicit their desired feelings, they will purchase from you.
Reflection time…
Okay…Look at where we've been with my Cognitive Customer Model.
We've gone from a potentially very specific target customer through to the feelings they desire and have found a place for us, as marketers, to inject ourselves into their decision-making process.
Throughout that process, we have made several substantial assumptions. Firstly, we have assumed that our target market identifies themselves in a specific role. Secondly, we have assumed that our market believes that those roles require particular attributes. Thirdly, we've assumed that those attributes create certain desired feelings.
Using this customer model, we have created several testable hypotheses. Previously, we mentioned that one of the benefits of a customer model is that it adds knowledge to the ideation process. This knowledge comes from testing these assumptions.
For example, you might validate what "protection" means to your prospects by comparing imagery of a parent standing up to protect their child versus imagery of a parent knowing the instant their child is in danger.
Also, we previously mentioned that the customer model could bring out the collective genius of your team.
I'm sure you can see how the above process could be highly participatory.
Imagine sitting down in a meeting with your team, and instead of randomly throwing out campaign ideas, you debate which Roles your target market share. Or you discuss which Attributes your team thinks customers perceive they need in order to accomplish their goals. Once you've gone through your model, you can generate campaign ideas to validate your assumptions.
Going forward, you can ground any future debates about creative, campaigns, or products in actual customer data or the desire to validate assumptions.
Another Example…
Here's another example of how you might use the model to gain deeper customer insights. Let's say our team believes that parents have the goal of protecting their child, and we are selling a GPS tracker for children.
Let's say we decide our campaign should include banner ads. We would then tie the visuals & copy of our banner ad campaign to our customer model. Integrating the customer model then gives us the capacity to gain critical insights, for example:
Do the parents we are targeting have the Goal of "protection" in a playground context? Some cultures may just assume safety.
Do we understand how parents represent the Goal "awareness?"
Do we understand the feelings our target parents seek in association with awareness?
With these questions on the table, we can develop several creative options to validate or reject our assumptions.
How Customer Models Increase Our Reach
As we fill out our model, we can use it to discover similar customers.
For example, if we discover that a specific target group of parents seek a "feeling of awareness" to perceive that they are protecting their child. We might, by evaluating the skills needed to accomplish the customers' role-based goals, surmise that another set of parents seeks a "feeling of strength" to perceive themselves capable of being protective.
We can then develop a campaign where the creative shows our product being empowering. To be clear, we aren't fighting these two campaigns against each other to see which performs better (i.e., an A/B/N test); we are creating a separate campaign that will target a new psychographic group of customers. Ideally, this new customer group won't overlap much with our first target market, thereby giving us access to a whole new group of customers.
Continuing this approach can radically increase our reach. The key is to quickly and accurately evaluating new opportunities in the model. To accomplish this, your customer model must be robust. There are several ways to make your model robust, and I will discuss them in future posts.
How Customer Models Discover New Products
Once we have a tested, robust model, we can use it to discover new product opportunities.
Let's say, for example, our campaigns have helped us populate our customer model, such that we are confident that one of our target market's Goals is protection. Let's also say, again, through our campaign data, that we are convinced that our target market believes that "awareness" and "ability to respond rapidly" are critical skills. Finally, let's say we are already successfully selling a playground monitoring device that is helping parents feel "aware." Our customer model has highlighted that there is market space for products that provide the attribute of "rapid response." This insight might lead you to test a "Call the Police" device for parents' key chains.
Here again, the model has provided the roadmap for product testing. You know the customers. You know the feelings they are seeking. From that, you can develop problems to be solved and determine what solutions your business can authentically provide.
So what are the downsides of this approach
Using a customer model has several disadvantages.
Firstly, customer modeling takes time.
Secondly, there is a team learning & integration curve. It's very easy to revert to a "shoot-from-the-hip" approach, especially under time pressure.
Thirdly, every model is ultimately inaccurate in some way because no simplification of the real world can be entirely accurate.
For our customer model, the means that we are never 100% sure that the creative or campaigns we create, to validate aspects of the model, represents our model elements to our customers. For example, does the picture of a muscular parent we used in our banner campaign, truly represent "protection" to our customers?
I haven't found an easy way to test that connection. The best way, in my opinion, is with reaction time testing, which I cover in a different post.
With reaction-time testing, you can prompt a customer with your image and validate if the customer associates those images or copy with those concepts you are seeking to reflect.
However, reaction-time testing is a lot of work and requires investment. Typically, you can leverage some knowledge about your customers or just the culture to make some assumptions.
" So if we are using our 'gut' here, why not just go back to the old way?"
It is a fair critique that if we are making assumptions here, using the model seems like an unnecessary exercise. However, I believe the difference is that you are minimizing the number of assumptions you are making so that as many assumptions as possible can be validated with experiment.
And, if you think full validation is necessary, you can always use reaction-time testing.
Wrapping Up
I hope this was a useful insight into the power offered by a customer model to radically increase your reach, product ideation, and returns.
I've tried to simplify the use of the model to something digestible, but it is involved, so If you have any questions, I'm happy to answer them. Feel free to reach out, you can click here —>
Best,
Sean