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Contextual Intelligence: Context & Payoff (Part IV)

2/12/2018 | John Kottcamp

Context is important everywhere

It’s not just in stores where brands can learn a lot about their customers. They can understand what they say, do and think by listening to them across the digital universe, including social networks, blogs, websites… and editorial content. Just like the in-store data collection, online listening does not have to entail identifying who’s talking. Its not as important who is saying something, as it is what is the volume, frequency and breadth of what’s being said.

Applying the rigor and methodology of a trained ethnographer to virtual cultures and societies, marketers can replace focus groups with virtual panels numbering in the millions rather than a dozen. At is most basic, a trained researcher can look at what’s trending on Twitter and get a sense for the mood of the audience. Using sophisticated technology, that hunch can be validated by sentiment and tonal algorithms. The technology actually enables us to find the semantic needles in the virtual haystacks.

For example, a couple of years ago, a leading life insurance company decided they were going to start targeting people who belonged to the “active lifestyle” category. They began sponsoring marathons and similar events. The logic was simple, sell life insurance to healthy people and you will have customers for a much longer time, net net, more profitablility. The problem was active lifestyle people weren’t thinking about life insurance. In fact, the initial research showed that the only people talking about life insurance were life insurance companies.

Virtual Ethnography allowed the life insurance company to understand what active lifestyle enthusiasts were talking about and how they could bridge the gap between their interests and life insurance. They studied what active lifestyle individuals were talking about. They found healthy people focused on the food they ate, the places they frequented or about how they lived their lives and raised their families.

This was the hook. The Active Lifestyles segment cared very much about the health and well-being of their families. Armed with this data, it was easy to begin conversations about planning for their family’s future. They were in the right context to bring up life insurance. So they began to produce content about healthy living with links to parenting, planning for the future, and protecting the family with life insurance. Virtual ethnographic research generated contextual intelligence which led to a contextually relevant content marketing experience.

The payoff of Contextual Intelligence

In addition to creating a state of flow by balancing the passion and the control of an individual, there is another balance that needs to be stuck. It’s called the “fair exchange of value”. Whenever, wherever and however a person engages with a brand, they have to get value out of that experience.

If a brand asks you for your birthdate when you register online, you expect to get a birthday greeting and most likely a gift in the form of a coupon or discount. Top frequent fliers exchange their continued repeat business for status and the perks that go along with it. Delta Airlines’ Diamond Medallion members board with first class, regardless of where they are sitting. Marriott elites get their own lounges with food and drink.

On the other side of the equation, companies must also receive value for what they deliver. Business travelers reward their preferred brands with repeat business. Loyal customers are willing to forgive a brand when a mistake is made and they will freely share feedback if they believe it will translate into a better experience.

Another example. American Airlines invented the frequent flier program in the 1980s. At that time, almost all airline tickets were sold via travel agents. The airline itself had very little data about its customers. In exchange for sharing some of that data, the airline rewarded the customer with miles. Decades later, people can earn miles for paying their mortgage, shopping online and even by buying a plane ticket.

But as the airlines learned, getting miles wasn’t the value their best customers were interested in. First, most frequent fliers were business travelers and didn’t pay for their tickets themselves. Secondly, the last thing the top tier fliers were interested in was flying more. What they cared about instead, was status. They wanted to be treated differently. They wanted to board first, get upgraded to first class, have access to private lounges and generally be recognized every time they engaged with the airline. And so, the fair exchange of value centered on recognition and status in exchange of steady revenue. Today, the top 10% of frequent fliers generate over 50% of airlines profit.

The fair exchange of value is the payoff for both the consumer and the brand. The customer gets a better experience and the company gets loyalty. Contextual Intelligence provides the opportunity for consumers to tell companies what they really value even if they chose to remain anonymous.

Getting started with Contextual Intelligence

The first step is understanding that no matter what your industry, it’s the customer experience that counts the most. Amazon has is in the movie business. General Motors loans people money. Starbucks has given you a destination, “the third place to spend time, in between work and home. They are all centered on creating and delivering great customer experiences.

Listen, learn and act on what people are telling you. Learn from your unknowns. If you only listen to identified customers, you will never take advantage of the larger market opportunity. In Starbucks’ case, fewer than twenty percent of their customers are members of their rewards program. In Delta’s case, the top five percent generate twenty-five percent of their revenue. Ninety-eight per cent of all web visitors choose to remain anonymous.

Use a variety of methods to listen and learn from both your existing customers and your potential audiences. Employ virtual ethnography techniques to understand what people are talking about. Use semiotics to decipher the language people use. Use visual recognition to observe how people behave when they are engaging face to face. And then combine all that data with the massive customer data you are most likely already collecting.

Finally, act on what you learn! When you deliver a contextually relevant experience, you are living up to both sides of the fair exchange equation. Invest in the people, processes and technology needed to dynamically deliver personalized experiences. Not only does our experience economy expect it, they will reward you for it.

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