Cohort Analysis, the New Big Data Digital Marketing
The marketing world is changing. It is going through numerous transformations, which are characterized mainly by a change in the concept of focus. Today, most sophisticated marketing tactics engage less marketing channels and target more specific audiences.
The days of agencies saying “give me a million dollars and I’ll produce an amazing TV campaign for you” are over. No more one-off campaigns on multiple channels like radio, newspapers, exhibitions and conferences, and public relations. The success of a campaign no longer depends on the marketing manager’s ability to get all channels to speak the same language and create the same message and visibility across all of them. Today, the critical path goes through the ability to identify relevant customer insights.
The best way to draw this critical path is through cohort analysis.
Cohort analysis is a concept whereby people have a common marketing desire; they behave similarly and statistically respond to marketing efforts in the same manner. Each individual in the group has its own power, but the power of the group is limitless. This is why organizations must take these groups very seriously.
So what is cohort analysis?
According to Wikipedia, “a cohort is a group of subjects who have shared a particular event together during a particular time span (e.g., people born in Europe between 1918 and 1939; survivors of an aircrash; truck drivers who smoked between age 30 and 40).”
In the marketing world, a cohort can be the group of people that buys a Toshiba monitor in a specific month; or a group that clicks the ad of the new Dior perfume in Facebook. The number of cohorts is limitless, since any one of us can belong to more than one cohort. The behavior of a cohort can be analyzed along time, and useful conclusions can be drawn using statistics and big-data analysis.
How should you work with cohorts in the B2B / B2C digital marketing?
- First and foremost – identify the cohorts that are important to your company and understand where should the focus be
- Identify the target audience that comprises the cohort
- From the data collected, understand what the cohort’s interest are and what will drive it to go through your value path towards a purchase
- Draw their path towards a purchase
- Go back in time several years, examine the average buying patterns of similar cohorts and then offer your cohorts additional products that are similar or complement that first purchase
Let’s review an example in the B2B digital marketing world.
While you’re walking your dog in the morning, you’re checking your LinkedIn page and click an ad for the latest Oracle database. That click automatically tags you as a member of the cohort that is interested in Oracle database. The clock begins ticking. You are not part of a value chain whose final objective is for you to buy the database.
After a short while, the entire cohort that clicked the Oracle database ad at 8:00 AM receives a invitation for a webinar on the subject or a free consultation. If time passes without any action or order, the offer is improved. Every click (or lack of click) is analyzed. Now notice this, if instead of clicking the banner that offers a Webinar you click instead the ad of additional technical whitepaper, you are automatically changing cohorts.
You participated in the webinar. At that instant, you become a member of another, different cohort. An analysis of the data will clearly show that the offer was a good one. So the strategy is taken up a notch and accurate statistics are collected according to past cohorts. The data also shows that in the case of consultation meeting, after a month they requested additional meeting – so after a month, you and the other members of your cohort will receive a mail regarding an additional meeting.
This is cohort at its best. Those who know how to manage these groups in the new marketing world, how to turn data into knowledge, can grow and reach more and new target audiences as never before. Cohorts enable companies to reach exactly those customers they need and want.
The change must begin with the concept. Companies must learn and understand that marketing over parallel channels is passé and that work teams must also function as a cohort. Each will bring its capabilities and knowledge. They gather together for a common goal and talk the same language from the moment the cohort is born. Uniform, focused advertising. In this case, the common goal of this particular cohort is to answer the question: “Who are we trying to engage?”
Just like a SWAT team, each person in the team is different – one is the bomb-disposal expert, another a locksmith, the third is a sniper, the fourth a paramedic, the fifth a commander and so on. But they all have the same common goal – break into the bank and save the hostages. Each gives its best, they all create a single solution, work in unison, and go for it.
By the same token, your work teams must comprise people from different fields, among them a copywriter, who know specifically what potential customers are interested in, a graphic artist, a B2B digital person, a PR manager, and additional members from other media channels. They all have the same objective – to convert potential customers. They must increase their awareness to your product, help them learn and compare both analytically and emotionally between similar products, and finally get them to buy yours. In other words – analyze, provide a path of winning offers and sell.
The cohort provides much more flexibly in our B2B digital marketing efforts because it enables you to change strategies quickly, including the offer itself, if you suddenly see changes in buying patterns. Everything is fast, dynamic, digital.
We at Xtra Mile, as a B2B marketing agency, offer you exactly that. We analyze the small details of the behavior of cohorts among the target audiences of our customers to provide them with the best offer, as accurately as they want it. We ourselves work in a cohort – we create and recreate workgroups exactly according to our customers’ needs and know how to build the best possible cohort for each task and objective.