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Inside the customer's mind

May 2, 2017

Internet giants like Amazon are winning market share. Why? Because they understand a fundamental point – Customers like offers that are tailored to their needs. To do this, it is necessary to understand customers at the very beginning of the customer journey, knowing what they want before they know it themselves, and having the right offer in terms of pitch, recommendation and price. Big data in commerce does not mean letting technology distract you from your customer.

Retailers need to take decisive action so they can continue making the right decisions in increasingly competitive markets. They must discover their customers "digital genome" – their individual personalities as revealed by the footprint they leave behind them on the Internet. And they must learn how to use this customer intelligence to their advantage. We show what retailers must do to get this process started and how they can sift through the mountains of data to secure rapid success.

The customer's digital genome is based on a complex understanding of the customer across three levels:

  • Buying behavior (e.g. brand preferences, price preferences, choice of outlet)
  • Value system (e.g. safety, simplicity, quality)
  • Personal worlds (e.g. hobbies, favorite artists, political views, vacation preferences)

To decode the digital genome correctly, retailers need to combine all three levels of customer understanding. The key questions are: Who is the customer, and what does the customer buy? But other questions are also important, too: What does the customer like? Who influences the customer? What is the customer's lifestyle? What does the customer care about? What stage of the purchase process has the customer reached? Where is the customer located? Which channels does the customer like? Retailers can find answers to many of these questions by looking at the customer's behavior online, their use of social media, and how they access apps on smartphones and tablets.

Users often give answers to many of these questions through their behavior on the internet, the use of social media channels and the access to apps on their smartphones and tablets. Essentially, it is about acquiring an individual understanding of the customer based on the historical relationship between retailer and customer and supplemented with data that allows you to predict their future behavior.

Shopping experiences will become highly customized. The digital genome helps companies to get inside the minds of their customers. This has two obvious advantages. The more accurate the profile of individual customer is, the better the offer can be tailored to his or her concrete needs. Services that lack impact fall to the wayside and with them the accompanying costs.

The crucial thing is not how you segment your customers, which only goes so far – it's how you individualize them.

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Think:Act

Inside the customer's mind

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Internet giants like Amazon are winning market share. Why? Because they understand a fundamental point – Customers like offers that are tailored to their needs

Published May 2017. Available in
Portrait of Tobias Weisel
Principal
Dusseldorf Office, Central Europe
+49 211 4389-2919
Portrait of Thorsten de Boer
Senior Partner
Munich Office, Central Europe
+49 89 9230-8526