At stage R in the STRATEGY framework, the focus is on reach. In this stage, the focus is on discovering your existing customers and target audience.
Companies and organisations must adapt to their customers’ constantly shifting preferences, aversions, and actions, or else they risk losing their business. Consider location tracking as an example. Many people found it unsettling when the concept of an app being able to locate you initially surfaced. However, as soon as this technology started to benefit customers, such as when Uber used location tracking to deliver comfortable vehicles directly to people’s feet, people became more comfortable using the service. Given that so many rely on location-tracking technology, we are often left bewildered and upset when Google Maps cannot pinpoint our whereabouts accurately.
Instead of being viewed as “creepy,” this technology is now considered normal and necessary. We used to be concerned about location-tracking technology, but now we depend on it. This highlights the significance of value as well. We are more inclined to recognise the benefit of giving my location and voluntarily give that information if doing so will enable a taxi to arrive.
The Hierarchy of Needs
Another viewpoint to explore is to question the psychological needs that your offering satisfies, as this will play an essential role in marketing your communications to engage your target audience and existing customers.
Let’s explore the Uber example further. Maslow’s Hierarchy of Needs is a triangular diagram with five levels that show the position and relative urgency of human necessities.
(Tiffany, 2021)
Each level’s requirements must be met before the person advances to the next level.
The second tier includes the necessities for feeling secure and safe. This is where the demand for Uber might be used. Customers choose the convenience, speed and safety of a digitally tracked and located taxi over a traditional taxi hailed from the curbside or by telephone to fulfil their needs. There is also the convenience of determining the price before entering the taxi or arriving at the destination without the additional requirement of carrying cash. In doing so, the customer addresses this psychological requirement by using Uber’s services.
So, for your own product or service offering, identify what needs are to be fulfilled at each stage and how your offering benefits your customers and target audience. These findings help to identify key themes in your marketing communications as they are directly related to what your audience needs from your organisation. The focus here is on the audience, not solely on the product or service’s features but on the benefits of utilising those features to fulfil the audience’s needs.
The value exchange
Determining the value your offering provides your existing and new customers is as important as understanding how much your audience values your product or service. Your customers will be willing to pay for something they think will benefit them, known as the value exchange because, in turn, the value comes from the consumption or use of the product (Day, 2000; Fill, 2015).
In the value exchange of marketing, the customer changes their valuable attention to the information about your offering. So, by identifying a specific audience, now is the time to dive deeper into who that audience is. Learn about them. Understand them. And think, while you’re doing so, of the kind of marketing message that would engage them.
This is where data comes in. Data will provide insights into your customers’ interests, behaviours, needs, and wants. It comes in various types and can be gathered from multiple sources, such as social media, website analytics, and direct customer feedback. However, it is important to remember to collect and use data ethically. Let’s go back to the Uber example. A lot of behavioural data will be available within the Uber app, such as most visited locations, frequency of bookings, average order value and duration of the trips. This provides valuable insights to Uber, which can tailor its marketing messages and offers based on what will be useful to that customer. For example, a free vehicle upgrade could be provided for the next trip when five are booked in a row to encourage repeat usage.
The STP approach structures your findings: segmentation, targeting, and positioning.
Segmentation is a useful way of categorising large customer bases into smaller groups based on similar characteristics such as behaviour, geography, and demographic information. This can then be expanded upon further by developing a customer persona. A persona is a way of effectively building a character, a person, that resembles your customer or a future customer. The profile details their likes, dislikes, habits, behaviours, etc. It can also be based on a real customer, which is even better as it utilises accurate data. Research and data from outside of the organisation can be used to inform your persona, especially if this is a new customer type, as this creates evidence to support your findings. More about how to create a customer persona here.
Then, once the segment has been defined, the targeting of that segment is spoken based on the characteristics that define the group, e.g. behavioural: purchases monthly trips to the airport, geographic: based in central London, demographic information: aged between 30-40 years old. The targeting messaging can be focused on creating comfortable and convenient trips to the airport and offering partnership offerings that may be available when they arrive at the airport, such as free access to the airport lounge.
The aim is that this all develops a positioning in the target audience’s mind of the organisation and its offering. The positioning can be influenced by the way in which the product is defined by consumers, including important attributes such as price, quality, features, reviews, and so on, depending on the product.
Why is all of this important?
Understanding the customer allows your marketing to be tailored to that audience because you now know a lot more about them. It also enables your organisation to build a competitive advantage. More about this next month. Happy researching!
Exclusive offer, 20% off!
