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Which Customers Are Buying What? Here’s How To Tell

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Massa Inc - Know what your customers are buyingThere are three key questions that must be answered before you begin any marketing campaign. In Part 1 of this series, I talked about the first question, “Who is your customer?” In this post I’ll reveal the second question you should ask yourself, plus how to apply your answers to create a winning campaign that’s guaranteed to work with your customers.

The Second Question

Once you have a deep understanding of who your customer is, including demographic details like age, marital status, location, and income, you need to answer another customer-centric question:

What are your customers buying?

I’m not talking about a general understanding of what your customers are buying. If you sell shoes, we can probably assume that your customers are buying shoes.

I’m talking about gaining data-based insights into…

  • Who is buying what
  • When they’re buying it, and
  • What they’re most likely to buy in the future

In other words, which customers are buying which brands of shoes, and when?

Only when you know who is buying what can you develop marketing campaigns to effectively communicate with your customers in a way that is consistently profitable.

The Dad Who Shopped At Target

A middle-aged man kept getting coupons from Target in the mail. He was a regular Target customer, so he was happy to get the coupons. The problem was that he started to get coupons for baby supplies: 10% off diapers, 2-for-1 teething biscuits, and so on. You’ve heard this story, right?

Frustrated and confused since he did not have a baby, the man finally went to Target and asked what was going on. He wanted coupons, he said, but he wanted coupons he would actually use!

After looking at transactional data, the Target employee helping him discovered the mistake: baby coupons were being sent to his house because his 16-year old daughter had been shopping at Target too, and through this very targeted mailing from Target the father later learned his daughter was – gulp – pregnant. Ouch! That is how good targeted marketing can be!!

The Power of Transactional Data

This true-but-awkward tale has a lot to teach us about the power of transactional data. Target ‘knew’ who their customer was (an expectant mother) and what they were buying (pregnancy items). Based on that transactional data, they made assumptions about what their customer was likely to buy next (baby supplies).

Massa Inc Chart - Sales By Product Category
How to Tell What Your Customers Are Buying

When you know what your customers are buying, you know how to speak to them through your marketing communications.

But how do you find out when, where, and what they’re buying?

1. By looking at transaction-level data

Every time someone purchases your product or service, you should know who that purchase belongs to. If someone buys furniture, they’ll most likely have it delivered, which means they’ll provide you with their address. If someone orders online, they’ll at least give you their email address, if not their billing address and credit card information.

There is a lot you can conclude from having something as simple as someone’s address. You can append data about income, education level, employment type, and shopping habits, all of which can help you create better marketing campaigns.

2. By looking at purchase patterns

Are certain customer segments more likely to buy your products at certain stages in their lives? What about certain seasons? Your transactional data will also reveal purchase patterns, which can help you decide when and how to market to your customers.

For instance, if purchasing patterns reveal that single dads in their 40s stopped buying leather sofas five years ago and started buying upholstered loveseats three years ago, you can use that information to develop a strategic marketing campaign.

  • Single dads who haven’t yet bought a loveseat will get a campaign featuring a loveseat, because based on buying patterns, they’ll be likely to buy.
  • Single dads who’ve already purchased a loveseat will be marketed to with the next likely item on their purchase list, like an end table, a coffee table, or a lamp.

How do you know what comes after the loveseat? By looking at past purchase patterns to make future purchase predictions.

Food for Thought: Italian Pork Tenderloin

Pork tenderloin is one of my favorite go-to entrees. It doesn’t take long to prepare and it’s always delicious. I have one in the freezer right now! This Italian version is dressed up with prosciutto, sundried tomatoes and sage. You can make it in a sauté pan on top of the stove instead of the oven.

If the grocery store where I shop wanted to market their recipe to me, how would they know to target me? Would I be a good customer for their marketing campaign?

Absolutely. By looking at transactional data, they would see that I had purchased pork tenderloin in the past. Then, by looking at the purchasing behavior of other women in my demographic, they would see that women who buy pork tenderloin are highly likely to follow that purchase with a purchase of prosciutto, sundried tomatoes, and sage. Clearly marketing this recipe to someone like me is practically guaranteed to be successful.

Even better, Italian Pork Tenderloin will make your brains fall out!

By now, you know who your customer is and what they’re buying. But there’s still one more question you need to ask before you launch your marketing campaign. In Part 3 of this series, I’ll reveal the final question that can make or break your campaign.

In the meantime, if you need help figuring out who your customer is, what they’re buying, and how best to communicate with them, contact Bonnie at (312) 463-1050 or by clicking here now.

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About the Author:

Bonnie Massa is Founder and President of Chicago-based Massa & Company, Inc. She works with companies and nonprofit organizations to make the best use of their information about customers, partners, donors, and sponsors. She works with organizations to attract new customers, find the best ways to segment and reach out to existing customers, analyze customer behavior to predict future behavior, and increase the value of their customer base. Bonnie is known for being a good listener and for working hands-on with her clients. Her ability to establish rapport, both one-on-one and with large groups, has its roots in her passion for the theatre. Bonnie founded and operated a nonprofit performing arts company in her hometown of Cookeville, Tennessee and taught public speaking to barely tolerant freshman at Tennessee Technological University. She speaks fluent “geek” and is an effective translator between business executives and technology experts