How to create personalized experiences for your customers in the new consumer era
The old STP model of the marketing world must adapt to the new eCommerce ecosystem. How do I create personalized experiences from segmentation, targeting and positioning in this new consumer era?
We live in the "Age of the Consumer". Post-pandemic digitalization has greatly increased the competitiveness between companies. Today, we are all fighting for the same customer, which has led to a dizzying increase in the cost of attracting new customers.
Converting a prospect into a customer costs 5 to 20 times more than retaining an existing customer, which leads most companies to consume most of their marketing resources on finding new customers, even though most of the return comes from existing customers.
From out of every 10 new customers acquired by a company, only 3 return to the business ? Adobe Article
Customers have more information and purchasing options available to them than ever before and expect personalized and relevant experiences, so making marketing communications more targeted, relevant and personalized has long been a challenge for companies. With this goal in mind, well-known marketing professor Phillip Kotler developed the STP model in the 1990s.
80% of shoppers are more likely to buy from a company that offers personalized experiences, and 71% of customers are frustrated when a shopping experience is impersonal ? Forbes Article
What is the STP model?
STP in marketing stands for segmentation, targeting and positioning.
These three basic steps dictate how marketers can:
- Identify the right customers
- Delivering the right message
- Provide them with the information they need
To be competitive in this new consumer era, companies must be able to understand the customers they already have in order to develop contextualized and relevant conversations with their best customers and prospects.
For this reason, segmentation is a key step in the STP model.
It was originally designed for market segmentation in order to develop "Go to Market" strategies, which required intensive research work before creating segments.
Today, companies can analyze the immense amount of data available, which is generated in interactions with their customers through the different channels available, in order to understand their customers and create the right segments for their strategies.
Another challenge brought about by the digital economy is the need for companies to communicate with their best customers across multiple channels and in a consistent manner, i.e., sending messages with content that is relevant and contextualized to their interests and preferences.
The STP model must adapt to the new consumer, for that, we can add three steps:
- Data ingestion: collection of data generated by interactions between customers and the business.
- Customer profiling: grouping customers with similar characteristics into "types" of customers. This step is prior to segmentation.
- Insights activation: Coordinate conversations with customers through the different channels of a company. This step is subsequent to positioning.
In conclusion: this model continues to be a crucial tool for marketers to develop personalized conversations with the most valuable customers.
