All Identity-Based Marketing Strategies Fall into 4 Categories

All Identity-Based Marketing Strategies Fall into 4 Categories

In today’s complex digital ecosystem, companies face unprecedented challenges in collecting and leveraging personally identifiable information (PII) to drive marketing success. With the depreciation of third-party cookies, the proliferation of consumer touchpoints, and the rise of omnichannel journeys, marketers are grappling with fragmented data sources and declining attention spans. In this landscape, many organizations find themselves at a loss: where to begin and how to craft effective strategies. This article introduces a comprehensive framework that categorizes identity-based marketing (IBM) strategies into four quadrants based on product involvement and sales channel type. By employing this framework, companies can systematically approach PII collection and utilization, ultimately leading to reduced acquisition costs, enhanced product experiences, relevant recommendations, increased revenue, and improved customer loyalty.


Introducing the IBM Framework: The Strategy Nautical Navigation Tool

The proposed framework positions IBM strategies along two axes: the type of sales channel (third-party vs. own) and the level of product involvement (low vs. high). Each quadrant is represented by a nautical symbol, reflecting the strategic focus required:

1. Treasure Chest (Low Involvement, Third-Party Channel)

2. Harbour (Low Involvement, Own Channel)

3. Lighthouse (High Involvement, Own Channel)

4. Compass (High Involvement, Third-Party Channel)

These icons are more than mere metaphors; they encapsulate the journey of building meaningful consumer relationships through distinct stages, from enticing initial engagement to driving enduring loyalty.



Identity Based Marketing Framework: The Strategy Nautical Navigation Tool

Now let’s look at each strategy quadrant and some of categories and brand examples

1. Treasure Chest: Low Involvement Products, Third-Party Channel

For low-involvement products marketed through third-party channels, the focus is on “enticing” consumers to share their data. Companies in this quadrant reward customer interactions with a valuable treasure approach, employing tactics that “incentivize data sharing”.

The Treasure Chest symbolizes the allure of customer data, highlighting the necessity of incentives to unlock its value.

Some of the brands and products in the Treasure Chest quadrant include:

- Consumer product goods companies like: Procter & Gamble — Household Products & Personal Care, Nestlé — Food & Beverages, , Pepsi — Snacks & Beverages, Coca-Cola — Beverages, Colgate-Palmolive — Oral Care, L’Oréal — Cosmetics, Johnson & Johnson — Health Products, Reckitt — Cleaning Products, Duracell — Batteries, HP — printers & cartridges

- Consumer service brands like: Airtel — Mobile Services, Dropbox — cloud storage, Norton — antivirus

I would like to highlight that some of the brands mentioned also sell through their own D2C channel or via a limited number of exclusive outlets. However, a large percentage of their products are sold via third party channels.

What approaches these companies take to gain PII:

- L’Oréal leverages virtual try-on features, collecting user preferences and demographics.

- Pepsi conducts interactive campaigns, contests, to capture data through user participation.

- Airtel gathers insights through mobile recharge rewards and customer surveys.

- Colgate offers free dental consultation via QR codes on its packaging.

- HP uses warranty registration to gain consumer data.

In addition, most companies use social media channels to gain info like name, email, and interests. Companies leverage this data to deliver personalized ads and content. Others also use surveys and request feedback on products and services to gather PII.


2. Harbour: Low Involvement Products, Own Channel

Brands in this strategy quadrant are selling low involvement products that are sold through owned channels. The goal of the companies & brands is to enrich and nurture customer relationships, much like providing a safe harbour.

The Harbour represents security, emphasizing the importance of building long-term customer relationships through a “nurturing” or personalized engagement approach.

Some of the Brands and Categories in the Harbour quadrant are:

- Tesco — Retail, Decathlon — Sporting Goods, Walmart — Retail

- Verizon — Telecommunications, Ticketmaster — Event Tickets, Urban Company — Home Services

- Pinduoduo — E-commerce, Shein — Fast Fashion, Alibaba and Amazon — E-commerce

- KFC, McDonald’s — Fast Food

Again, while a majority of products & services sold via above own party channels are low involvement in nature, there is a smaller percentage that would include high involvement products also.

What approaches these companies take to gain PII:

- Amazon utilizes purchase history and personalized recommendations to build detailed customer profiles. Its Amazon Prime service gives additional rewards and benefits for top paying customers who also share more info via using multiple services.

- Shein collects app data and user feedback to nurture consumer relations and tailor offerings to enhance customer experiences.

- Tesco employs loyalty cards to track shopping habits and deliver personalized discounts. The Tesco Sport for Schools & Clubs program is a voucher collection scheme that allowed schools and clubs to earn sports equipment by collecting vouchers from Tesco stores and redeem them for a wide range of sports and computer equipment.

- Verizon uses account management portals and service usage metrics to gather user data.


3. Lighthouse: High Involvement Products, Own Channel

This strategy quadrant involves high-involvement products sold through own channels, where the focus is on “engaging and inspiring” customers. Companies act as a guiding light, leading consumers through their journey, literally acting as the Lighthouse.

The Lighthouse symbolizes guidance and inspiration, indicating the need for brands to lead consumers with engaging experiences and meaningful interactions.

A few Brands and Categories in the Lighthouse quadrant are:

- Tesla — Electric Vehicles, Dyson — Home Appliances, Apple stores — Electronics, Peloton — Fitness Equipment & Services, Stitch Fix — Fashion

- Starbucks — Coffee, Hermès — Luxury Bags

- Airbnb — Travel Accommodation, Netflix — Streaming Services

- Sotheby’s — Real Estate Auctions

What approaches these companies take to collect PII:

- Apple captures data through device usage and app interactions, creating a seamless ecosystem.

- Netflix tracks viewing habits to provide personalized content recommendations. It inspires viewers with recommendations on its home feed & makes their journey shorter & easier to discover content quickly.

- Peloton collects fitness data to offer tailored workout plans and track user progress.

- Stitch Fix uses style quizzes, user social data and feedback loops to engage shoppers and then offer customized clothing selections.


4. Compass: High Involvement Products, Third-Party Channel

High-involvement products marketed through third-party platforms require companies to enchant consumers, build lasting brand affinity and make consumers “enamoured” with the brand. Here, the focus is on creating deep emotional connections.

The Compass represents direction and exploration, suggesting the need for brands to navigate customer relationships with precision and allure. Since the latency between such expensive and high involvement products is high, brands need to make that additional effort to keep in touch with consumers and literally provide the compass and navigation for consumers to come back to them.

Some of the Brands and Products in the Compass quadrant are:

- BMW — Luxury Cars, Mercedes-Benz — Automotive

- Canon — Cameras, Sony — Consumer Electronics, Yamaha — Musical Instruments, Montblanc — Luxury Pens, Cartier — Luxury Jewellery

- Kohler — Home Fixtures, Caterpillar — Industrial Equipment, Oracle — Software, Bosch — Home Appliances

- Botox — Cosmetic Surgery

- University of California, Berkeley, Stanford University, Yale courses — Coursera

What approaches these companies take to gain PII:

- BMW gathers data through dealership interactions and connected car services, enhancing customer profiles.

- Cartier offers in-store consultations, collecting preferences through personalized service.

- Oracle captures insights via software trials and support services, improving customer understanding.

- Kohler engages consumers through design apps and product registrations, enriching user data.

- Universities collect feedback like testimonials, comments, reviews, recommendations to improve their content & teaching pedagogy, amplify their marketing approach & share advanced courses for students and professionals to come back for continuous learning.

The Importance of a Strategic Quadrant Approach

With consumers engaging across multiple touchpoints and channels, and attention spans declining, companies need a strategic approach to IBM. The quadrant framework helps organizations to identify where to begin and how to craft effective strategies tailored to their unique business models.


The Impact of Proper Audience Recognition

Properly recognizing and understanding target audiences can lead to significant benefits:

- Lower Cost of Acquisition: Tailored marketing strategies reduce waste and direct efforts toward the most receptive consumers.

- Better Product Experience: Personalized interactions enhance customer satisfaction and improve loyalty.

- Relevant Recommendations: Data-driven insights enable companies to offer highly relevant product & service suggestions.

- Higher Revenue and Loyalty: Engaged and satisfied customers are more likely to remain loyal and contribute to revenue growth.


Martech Solutions for Each Quadrant

To successfully implement these strategies, companies should leverage marketing technology appropriate for their quadrant:

1. Treasure Chest (Low Involvement Products, Third-Party Channel): Use social media analytics and gamification and rewards platforms to encourage data sharing. Build PII via offering free services to capture first party data and partnering with third party channels to enrich profiles.

2. Harbour (Low Involvement Products, Own Channel): Implement customer relationship management (CRM) systems, loyalty solutions and personalized WhatsApp, email, RCS marting solutions. Nurture relationships through targeted content and offers.

3. Lighthouse (High Involvement Products, Own Channel): Invest in advanced analytics platforms and engagement tools. Utilize customer data platforms (CDPs) to create holistic customer profiles and deliver personalized experiences.

4. Compass (High Involvement Products, Third-Party Channel): Employ experience management software and third-party data integration tools. Focus on customer journey analytics to enhance the entire consumer experience across channels.


Measuring Success & KPIs

Success in identity-based marketing can be tracked via multiple key performance indicators (KPIs):

- Brand Awareness & Consideration: Track brand mentions across social media, and footfalls into your offline store or online site traffic to measure recall and actionability.

- Customer Engagement: Measure engagement metrics such as likes, comments, shares, saves and clicks on social media platforms. Or clicks on a Google store buttons. Or writing a review and giving ratings on marketplaces like Amazon or on sites like Airbnb or TripAdvisor. Higher engagement shows better quality of content & its resonance with your target group.

- Conversion Rates: The percentage of customers who complete a desired action, like shopped a product or service or download an app or sign up for a newsletter.

- C-SAT customer satisfaction: Gauge this via measuring how many of your customers are satisfied with your product or service. Or recommend your brand to friends & family measure via Net Promoter Score (NPS).

- Customer Latency, Customer Retention & Customer Lifetime Value (CLTV): Measuring the gap between 2 purchases shows latency, while returning customers divided by total base shows retention ratio. Calculating the total value of each customer over their lifetime show the strength of your brand loyalty.

- Customer Acquisition Cost (CAC) & Return on Investment (ROI): Track the total cost to acquire new customers helps measure CAC, while calculating the ROI of the marketing campaigns shows which strategies are effective and profitable.


Conclusion: The North Star for Identity Based Marketing Strategy

In the ever-evolving landscape of omnichannel consumer journeys, companies must navigate the challenges of cookie depreciation, fragmented data sources, and shifting consumer expectations. The 4-box strategic quadrant framework for identity-based marketing provides a structured approach to harnessing the power of PII. By categorizing strategies into the Treasure Chest, Harbour, Lighthouse, and Compass quadrants, businesses can align their marketing efforts with product involvement and channel dynamics. The approach not only aids in strategy development but also serves as a compass for leveraging consumer data effectively. As companies continue to innovate, I hope that this framework will help them create personalized experiences, foster long-term connections with customers, and drive sustainable growth.
Vikas Pathak

Top Brand Strategy Voice | Growth Manager | Venture Studio

2 个月

Anand Narang very interesting article

Sunny G.

Customer Experience Leader | Recognised Keynote Speaker | 18 Years in aligning VOC with VOB| Driving Operational Excellence and Innovation in E-commerce, Healthcare, Telecom, Retail and Tech | Views Personal

2 个月

Insightful Sir !

Iftekhar Mallick

A marketing-driven business professional

2 个月

Impressive read, Anand ??

Sandeep Mukherjee

SaaS, CxM, OMS, SCM, BPM Consulting Leader | LoB & Partner Channel Operations | AyataCommerce | ex-SAP Hybris & Signavio BPI, ex-FluentCommerce | ex-TCS, ex-IBM, ex-Oracle

2 个月

Well versed Anand Narang . Really insightful yet simplified.

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