Forget cookies - cohort marketing is the future

Customer experience management (CXM) is a strategy implemented by brands aiming to create a seamless marketing journey, using data and tech to put the customer first to deliver bespoke, unique, and personalised experiences.

While an oversimplification, at its core CXM requires a specific mindset, as much as it requires technology. The complexity arises as brands attempt to achieve a customer experience that delivers a meaningful journey while also working within societal concerns and privacy regulations.

The way you implement a CXM experience differs from brand to brand. Buying a car takes you on a very different journey as opposed to buying a house, so each business has to specifically cater their CX blueprint to their own business model, and consumer base. You wouldn’t be wanting or expecting a fun, enjoyable experience when applying for a mortgage, but for many, the fun experience of buying a car is part of the product itself.

Different people have different preferences, and historically, cookies have given brands the ability to deliver personalised experiences to cater for this, however, CXM has now been put into a tricky position.

With the rapidly approaching demise of the third-party cookie, public sensitivity about data usage, brands wanting to launch online safety and privacy initiatives, and governments bringing the hammer down on traditional advertising – how can brands continue to deliver the quality-of-care we have come to expect?

The inevitability of cohort marketing

Cohort marketing, the process of grouping like-minded people with similar influence, self-description, buying behaviour, patterns or demographics, is one of the new, innovative strategies set to revolutionise CX.

While cohort marketing works as a solution that is compliant with the privacy regulations that loom on the horizon, it also allows for a much simpler yet effective way of delivering consumer communications at scale. The death of the cookie will be significant, but it wasn’t the only reason cohort marketing has been brought to the forefront. In some regards, it was always the inevitable.

A major hurdle to scaling marketing communications has always been the skill sets you have as a business. Cohort marketing and fewer 1-2-1 journeys will allow marketers to expand efforts like never before.

Cohort marketing forces brands to think more logically about the data they are collecting. Rather than going through a desperate scramble for consumer information, brands should instead be thinking about what data is actually important for the path to purchase. Using cohorts helps to simplify the process and forces brands to focus on a limited amount of information to derive value.

This increased simplicity also provides benefits for the consumer themselves. The limited yet effective nature of cohorts allows brands to carry the same messaging from a digital acquisition to CRM processes with great ease. This is especially important during the cost-of-living crisis, it has never been more important for brands to be clear in their communications as consumer spending and loyalty will be lower.

As the implementation of cohort marketing is not sector specific, we will likely see an explosion of brands using this technique over the next few years – although, it isn’t going to immediately work for all.

Long-standing businesses with legacy infrastructure are going to inevitably struggle in the implementation of a cohort marketing system. Brands may not realise the gaps that are present within their data infrastructure and are going to need to make serious changes before being able to implement this new marketing system.

Getting cohorts right

Google has been dabbling with various cohort models in the past. At first, they produced FLoC, which grouped users via aggregated data, but following feedback from trials, they have now shifted their focus to ‘Topics’ which instead uses recent browser activity. Many other brands and technology companies are also trialling different systems and ways of grouping consumers.

This cycling between different concepts shows that there are still plenty of kinks to iron out, but in the meantime, brands need to start getting their house in order, so they’ll be able to move quickly once one arises.

At Merkle, we have developed a maturity assessment approach which will evaluate what stage your business is in, and the foundations for implementation of high-level CXM strategies, such as cohort marketing. These fall under six main pillars:

• Vision & Customer Strategy
• Data Enablement
• Technology & Orchestration
• Experience Activation
• Analytics & Optimisation
• Organisation

With this, we can evaluate the preparedness of a business to shift to a cohort marketing system and create a blueprint for their future success.

One of the most overlooked elements of implementing a new system is in the creation of an accurate measurement framework. Incrementality testing is hugely important to guarantee the successful adoption of any new marketing techniques, let alone something as significant as leaving the cookie behind.

Cohort marketing isn’t a revolution, it’s an evolution. This means, that with the right assessments, a brand can quite easily move from cookies to cohort and ready themselves to be launched into the new era of CXM.

Revolutionising CXM

The ultimate aim of cohort marketing is to produce a system that can still meet customer expectations by producing valuable data for brands, while complying and futureproofing against an ever-evolving cultural and regulatory landscape.

Cohort marketing has not only given brands a lifeline from the death of the cookie, but also a way to actually improve the ability to create personalisation at scale.

Those who shift towards cohort marketing are going to see it forms as a key differentiator against their competitors and with inflation set to continue squeezing margins, building a network of effective communications is going to be absolutely critical to brands.

While this method won’t be for every brand, and certainly won’t be the only new method of marketing produced to combat the absence of the cookie – it will definitely be worth the investment for those needing a quick and stable solution to the looming failure of their CXM systems.