Why you should market to households as well as individuals - and how to do itby
How come marketing programmes are so often geared only to individuals without consideration to any other adults they live with?
A household with two adults, or older children could have twice (or more) the spend potential - so why do so many brands to consider all households as one person?
It’s true that, according to the latest census, the single largest segment of households (30%) comprises individuals.
Yet households of more than one person account for the remaining 70%.
Studies have long identified ‘the household’ as a consumer decision making unit. More recently, the controlling role of the ‘alpha partner’ and the ‘types’ of people within the household (e.g. ‘cautious and content’ vs ‘organised aspirational’) has been explored.
We must also factor in nature, reach and consequences of buying decisions within distinct product category, for example as shown in the below diagram:
[Click to enlarge]
Why is household composition important for marketers?
We just don’t know enough about the nature of household roles across the purchase decision making journey. But as businesses, our data can help us find out more. It matters because it has a major influence on how buying decisions are made:
- Household composition influences the size of opportunity for goods and services and how much is spent in each category.
- Family life stage is also an important factor - understanding the ages of the family members, number of adults, and how categories and spend levels change over time is crucial to marketing more effectively to households.
- Lifestyle, affluence and attitudes should also be taken into account.
Your customer data strategy should set out how data is used to inform such household considerations.
Key consumer categories that can benefit from household marketing
The impact of the type of household is greater or lesser depending on your specific consumer category – here are some examples where there is likely to be significant business benefit in considering it:
- Travel and leisure. Combine the age of the household members, affluence level and buying history, and you can identify the likely family campers from the Disney World-goers and the river cruising couples.
- Car purchase. How many cars are in the household? How old are the kids? What’s likely to happen next? Taking a household view can help you identify whether the next purchase is likely to be a teenager’s first car, a family-packing SUV or an empty nester’s convertible.
- Mobile, broadband and TV. From Spotify to Netflix, YouTube to Sky Cinema you’ll find value in looking at a household’s (rather than individual) viewing and listening habits.
- Retail. Discover how taking a household view can help maximise returns – especially when it comes to jointly consumed goods such as groceries.
How to take a household view of your data
Adding a household perspective to your marketing is straightforward – here are some simple considerations and steps that you can take to achieve this:
- Create new household level engagement metrics. Instead of looking purely at individuals, what can you learn from looking at the relationships between the individuals at an address? How should your open rates, click through metrics and timing of communications alter to take account of the fact that families talk? Performance measures should adequately reflect the household view.
- Think bigger. What opportunities does the household present for up- and cross-selling? From family data bundles to multi-room pay TV, consider the benefits of looking wider.
- Build household considerations into your customer management strategy. The connections that occur when you look at households as opposed to individuals can transform a contact strategy. Marketing to an 18 year old about to head to university is one opportunity. But from model of car to grocery choices to holiday type, understanding how that impacts on the wider household can present many more opportunities.
- Segment your customers more effectively. Look explicitly at household composition and family life stage. This could also include deriving and assigning consumption and purchase roles within households where there is more than one engaged adult.
- New customer journeys for new personas. Households with multiple adults will have a variety of decision-making routes, ranging from the ‘alpha’ led to the collaborative couple and child-driven. Create new personas that reflect the household model and devise campaigns to match.
- Create household level offers. By creating ‘something for everyone’ in a household of multiple influencers and decision-makers you get multiple opportunities for your offers to make an impact.
Taking the household view doesn’t remove the need for individual attention. But for those products and services consumed by households, sticking so rigidly to individual perspectives is an opportunity missed for marketers.
Going to cold prospects is usually harder work and more expensive than going to engaged audiences such as other adults within customer households – intra household marketing opportunities should be considered as an alternative or complimentary programme. The size of the prize is likely to be significant and can easily be calculated by looking at your customer households and extrapolating out to household companions.
Paul Kennedy is data strategy director at Amaze One.