Marketers looking to up their personalization game have been embracing a new tack: creating personalized offers for consumer communities. The approach is called identity marketing, and it has a secret weapon that traditional segmentation strategies don’t: members of a consumer community are deeply connected. When they hear about a good deal, they spread it through their network.
Brands running identity marketing programs have seen ROAS as high as 25:1, and the key to their success is understanding what a consumer community is and how to pick the right one. In this interview, Sai Koppala, SheerID’s chief marketing officer, lays that bare and explains how brands can discover their community and take personalization to a whole new level.
Q: What Is a Consumer Community?
Sai Koppala: A consumer community is a group of people who share a deep-seated attribute. These attributes can be anything rooted in a person’s identity, such as their life stage—students and seniors are a good example of that—or occupation, like teachers, nurses, or first responders.
Consumer communities can also be formed by a common affiliation, in the way that service members, veterans, and their families are all part of the military consumer community. Even people joined together by a shared passion, such as members of the Sierra Club, can be a consumer community.
Q: Aren’t Consumer Communities Just Another Name for Segments?
Sai Koppala: Yes and no. Consumer communities and segments are both subsets of a brand’s audience, but the biggest difference is that members of a segment are unknown to each other. They may share common demographics, like their gender or age; or, they may share purchase behaviors, like a product they bought. But they aren’t part of a social network built around an identity attribute.
Consumer communities also share common traits. For example, teachers are so dedicated to their jobs that 99% of them spend personal funds for school-related purposes. And they’re savvy shoppers when it comes to stretching those dollars: 94% will go out of their way to shop at a company that offers a teacher promotion.
Nurses are another good example. Most of them have flexible hours and earn good wages—more than $100,000 in some states. But they’re also uniformly overworked. A recent survey revealed that 62% of nurses felt regularly burned out in their jobs, and more than half said their workload had negatively impacted their mental health.
College students often share a love of fashion, music, and technology, and those who belong to Gen Z care a great deal about their privacy. And when you look at the military community, you see a consumer community that is five times more likely to travel, and more than twice as likely to change addresses than typical Americans.
Q: How is Marketing to Consumer Communities Different Than Traditional Segmentation Strategies?
Sai Koppala: Segmentation strategies are helpful, but they have their limits. My colleague Bill Schneider wrote about that in his post, but it boils down to two things.
First, brands typically create segments based on inferred data that’s been collected without a consumer’s explicit consent—for example, when a shopper views a product page. A brand will then use that information to predict what message will most resonate with that shopper. The process is better than broadcast marketing, but it’s imperfect because it’s still a guess.
Second, individuals in a segment don’t know each other, which severely limits the word-of-mouth effect. That’s a high price to pay because having an offer go viral is every marketer’s dream.
Q: What Are the Advantages of Engaging Consumer Communities?
Sai Koppala: There are four main advantages. First, engaging consumer communities is pull-based marketing, which is transparent and privacy-friendly. Instead of “guessing” at signals, brands identify the community they want to reach, develop an offer they hope will be appealing, and invite the consumer community to enjoy it. Consumers choose to accept the offer, which launches a more authentic, trustworthy, and reciprocal relationship.
Second, it promotes sharing. Consumer communities are deeply connected. Think about how frequently teachers interact with each other, and how bonded members of the military community are. If a personalized offer is good, recipients will share it throughout their network.
Third, engaging consumer communities increases brand loyalty. When someone realizes an offer is truly exclusive to their group status, it makes the offer more attractive and makes them feel special, which creates a deeper connection with the brand.
Finally, engaging consumer communities launches a slew of mutually beneficial relationships: The member who shares an offer gains social capital, her peers enjoy the offer, and the brand acquires more customers.
Q: How Does a Marketer Know Which Consumer Community Fits Their Brand?
Sai Koppala: Deciding which consumer communities to target is an easy process.
First, you determine the attributes of your target market, such as age, gender, income level, how they spend their time, and any known preferences. Most brands already do this when they develop their target personas.
Then you map your personas to a consumer community you can reach through an identity marketing program. For example, home improvement brands such as Lowe’s want DIYers, who are often male and value self-reliance and independence. This makes the military consumer community a great fit.
Travel brands want people with the time, money, and desire for travel. This maps well to teachers, who have longer vacation times for exploring, and nurses, who—as I mentioned—also have flexible schedules and need to get away.
Consumer community can also be customized, and brands can get creative in identifying them. Take Icebreaker, for example. They’re a performance apparel company whose clothing appeals to elite athletes and consumers who seek high-quality alternatives to synthetic-based clothing. The company decided their consumer communities were groups like ski instructors and employees of outdoor equipment manufacturers and government agencies, such as the Forest Service. These communities were a great fit, especially because they’re in a position to influence many of Icebreaker’s prospects.
Q: Once You Determine Which Community Aligns with Your Brand, Then What?
Sai Koppala: The next step is to provide a gated, personalized offer that activates their sense of belonging. TIDAL, the music streaming service, recently launched a program giving high school students a 50% discount. This offer creates an emotional connection between TIDAL and its key audience—young listeners eager to share music with others in their community.
And the travel website CheapCaribbean.com ran a campaign offering 50 nurses free flights to a tropical destination, which was a great move because most nurses desperately need a vacation. Rewarding consumer communities with personalized offers that have meaning for them inspires great loyalty.
Once you launch a personalized offer to a consumer community, you nurture them to deepen the relationship. Lowe’s does this by automatically enrolling the military in its MyLowe’s loyalty program and marketing to them with special offers throughout the year.
Q: What Else Can Marketers Do To Harness the Power of Consumer Communities?
Sai Koppala: A personalized offer is just the beginning. Consumer communities want more than a discount—they want brands to support them and their values.
Brands can do this in many ways. T-Mobile provides tremendous career support for veterans, and Sprint makes a donation to a military-friendly non-profit for every new military/veteran account.
Companies like UNIQLO and Madewell leverage the power of cause marketing with socially responsible programs that greatly appeal to the student and teacher consumer communities they’re targeting.
And many brands go out of their way to recognize their consumer communities by providing special offers at key times of the year, such as Veterans Day, First Responder Day, Teacher Appreciation Week, Back-to-School, and Grandparents Day.
There are a myriad of ways to engage the consumer community that naturally fits your brand, and they all set the stage for a long-term relationship that profits both your business and your customers.