Tuesday, June 18, 2013

Demographic to Psychographic – Paradigm shift in Data Quality

The relation between Data Quality and Direct Marketing is not just traditional but insurmountable too. With the flood of personal and behavioral information about the consumers, Direct Marketing has changed its focus from mass marketing to target marketing. This write-up explores the reflection of this change in Data Quality practice.
Direct Marketing in bulk, often termed as database marketing, has a Data Quality solution at its centre. This solution scrubs, augments and then de-duplicates a bunch of name and address records. This is done to minimize sending the same offer to two different consumer profiles pointing to the same real life individual. However, demographic information often finds bigger clusters of consumers such as “All male consumers from Kolkata in the age group 18-25”. It is almost impossible to send targeted promotional offers to such a cluster expecting a high taker rate. 
In order to define clusters of consumers likely to purchase certain type of products, it is necessary that the clustering technique includes variables based on past purchase history and other related psychographics besides traditional demographic parameters.
Where does big data fit in all these? Big data, besides being big in volume, can be broadly categorized into two groups viz. data collected from various social networking channels such as facebook, twitter or linked-in and the data collected from various devices such as card readers, GPS tools etc. However, there is at least one common characteristic in both these groups. And this is, they contain huge amount of personal and often psychographic information that can be extracted, parsed and mined.
Direct Marketing today, is in a position to make use of this vast collection of personal and psychographic information in clustering consumers into effective and smaller target groups.
Let us have a closer look into the nature of the psychographic parameters used in this kind of clustering.
2.       Lifestyle
This involves classifying people according to their values, beliefs, opinions, and interests. There is no one standardized lifestyle segmentation model, instead market research firms, and advertising agencies are constantly devising new categories, which will help target possible consumers of their clients products.
3.       Behavioral
This kind of parameters divide the market into groups based on their knowledge, attitudes, uses and responses to the products they use.
Keeping this trend in mind, we can realize that the shift of focus in Direct Marketing must have a significant impact on Data Quality practice itself. Indeed, Data Quality solutions now consider this external third party data for augmentation and then for de-duplication. Complexity in Data Quality with this additional information has become manifold making the journey challenging and all the more exciting.