Customer Engagement

How Lookalike Modeling Can Help You Market to the Right Customers

Brands need to use data to create the customer experience customers expect. Lookalike modeling can help.

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Chris Jacob leads product marketing and thought leadership for Salesforce Marketing Cloud, part of Salesforce Digital 360. This post is part of our Moment Makers series, which takes a deep dive into how marketers use technology to build data-driven customer experiences that feel natural, relevant, and right on time. 

While the overnight pivot to digital offices, classrooms, and storefronts threw everyone for a loop in 2020, it also put a spotlight on what customers — both B2C and B2B — want most from the brands they engage with.

And what do they want? Personalized experiences that connect across every channel. Empathetic messaging at each touch point that shows you know who they are, what they value, and what they might need in the future.

These insights aren’t new. Months before the pandemic took hold, Salesforce research showed that 73% of customers and buyers expect brands to understand their needs and expectations, and 64% expect tailored engagement based on past interactions. And with shoppers buying online in unprecedented numbers, there’s a  renewed sense of urgency to address them as companies transform their digital strategies for the all-digital customer.

As we head into an unprecedented B2C holiday season and year-end B2B buying frenzy, our 2020 Consumer & Workforce Series Insights research shows that 62% of customers in both camps say that brands should move forward with their holiday promo plans. What’s the key to fulfilling their expectations amidst so much uncertainty and change? 

The answer is data. It’s your single source of truth for knowing your customer.

Every brand regardless of size, industry, and region should be using data to power their marketing and drive a holistic customer experience. Take a look at how four brands – Oars + Alps, AAA Carolinas, Casey’s General Store, and Pacers Sports and Entertainment – are using data to grow their business and connect with their audiences. You can find more data-driven insights by watching our second Marketing in Motion event.

Use data to find more customers like the ones you already have

Founded in 2016, skin care products company Oars + Alps is run by a small, nimble team — fewer than 20 people according to LinkedIn. Adopting a strategic approach to data is key to knowing their audience and engaging potential new customers in a thoughtful (and scalable) way. 

54% of customers and buyers say that companies don’t use data in a way that benefits them

Third Edition, State of the Connected Customer

One of the company’s data strategies is lookalike modeling. This practice pinpoints core characteristics of a target audience and identifies potential new members that display similar attributes or behaviors. 

You can do lookalikes if you have first-party data of what a customer looks like. “Let’s say I have a million customers that I have classified as high value,” said Oars + Alps co-founder and Chief Marketing Officer (CMO) Laura Cox. “Let’s find people that look like them based on different characteristics and send those people a direct mailer.”

Data-driven marketing techniques like these can help you identify potential customers and buyers with the highest likelihood of finding value in your product or service — and spare those who aren’t a good fit.

Vary your data sources to better understand your customer

As you plan for the data that will fuel your marketing for the rest of 2020, aim for a mix of first- and third-party sources to get a full picture of your customer. 

The amount of data marketers use is projected to grow 50% from 2019 to 2021.

Sixth Edition, State of Marketing Report

At AAA Carolinas, the number one metric is member retention, so the organization relies on a host of data to ensure every message aligns to their needs and interests. Core data sources include post-transaction polls, broader surveys that dig deeper into members’ interests and preferences, and third-party data to fill in any gaps.

A rich customer view is just one factor contributing to this Salesforce customer’s all-time-high renewal rates

“Put yourself in the consumer’s shoes. The more relevant the message is to you, the more satisfied you’re going to be with it,” CMO Chris Doyle said. “We don’t want to interrupt their space with things that are not valuable to them.”

Explore new ways to connect and amplify customer data

As you research the different ways that brands put data to work, it’s also a great time to think about the tools you might use to activate data in your own company. Laura Cox summed it up perfectly during Marketing in Motion: “We have so much data at our fingertips. A lot of what we do is trying to figure out how to prioritize, how to integrate, and how to be thoughtful with our time.”

Marketers have doubled their use of data management tools — up from three in 2018 to six in 2020.

Sixth Edition, State of Marketing Report

In response, marketers are turning to more complex combinations of data management technologies to address five core issues identified in the State of Marketing:

  • Quality: Ensure your data is accurate; only 37% of global marketing leaders are completely satisfied with this
  • Identity reconciliation: Connect customer information across all of your applications to build a complete profile; only 33% of global marketing leaders are completely satisfied with this
  • Consent management: Capture and honor all your customers’ preferences (not just the ones mandated by law); only 34% of global marketing leaders are completely satisfied with this
  • Integration: Bring together all the systems that capture data to build your unified view; only 34% of global marketing leaders are completely satisfied with this
  • Timeliness: Make data accessible as soon as you need it; only 34% of global marketing leaders are completely satisfied with this

In this same research, Customer Data Platforms (CDPs) ranked fifth among the most popular solutions used by marketers today to overcome these challenges. CDPs can help you connect disparate data sources and reconcile customer identities across those sources to provide a more relevant customer experience. For example, as a pilot user of the new Salesforce enterprise CDP, Casey’s General Stores, a chain of convenience stores in the Midwestern U.S., added new layers of personalization to its messaging and experienced a 16% lift in conversion rates on pizza as a result.

Artificial intelligence (AI) for marketing is also on the rise to support personalization efforts across channels — reported AI use in the sixth State of Marketing report compared to the fifth shows that global use is up 186% over the last two years. And the best use cases help marketers garner a unified view across all aspects of the customer experience. For example, as part of their digital-first engagement strategy, Pacers Sports and Entertainment uses AI to support personalization efforts in their fan messaging, and it contributes to their increased engagement year over year.

These are just a few ways you can take your data strategy to the next level. To learn more:

Marketing Cloud offers solutions for digital marketing, email marketing, social media marketing, customer journey mapping, marketing analytics, marketing automation, and B2B marketing to help you personalize customer communications across every digital touchpoint — from anywhere.

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