Marketing Automation

The Research Behind Marketing Automation

By 27 December 2018 January 2nd, 2019 No Comments

Have you ever received an email that seems to be promoting every product from a retailer’s entire range? If you’re like most people, you probably had a quick look but ultimately deleted it and possibly unsubscribed. Do you know why you would likely feel overwhelmed by an email like that? It’s called ‘choice fatigue’ and it’s a psychological concept that refers to the act of doubt you may feel when presented with too many options. When this phenomenon occurs, people’s decision-making ability becomes fatigued and they tend to simply walk away from making a decision, rather than spending a lot of time dwelling on their options.

From a marketing point of view, choice fatigue can be disastrous to any campaign, but it’s something that many unskilled marketers do – particularly enthusiastic business owners. They think “if all of my products are seen by every customer, surely one of my products will catch their eye and they’ll buy it”; however, research has shown that people aren’t very predictable and simply don’t react in that way. One such example of this occurred with the study undertaken by the Columbia University in 2000. They first offered consumers a choice of 24 gourmet jam brands at a farmer’s market and even though 60% of the attendees stopped to look at the jams, only 3% of them made a purchase. When the number of jam brands on offer was reduced from 24 to only 6, the percent of consumers who made a purchase rose to 30% and these findings have been replicated over and over again.

Another psychological concept closely related to choice fatigue is something called ‘decision paralysis’. Decision paralysis posits that consumers are more likely to purchase a product or service if they are given specific (and preferably personalised) parameters. So for example, if a new parent is searching for handbags, they will respond better to an advertisement telling them they should buy a specific product or service for a specific identified need (e.g., “this fashionable bag is perfect for parents like you. It fits nappies, bottles etc”), rather than an advertisement that just offers them products without stating a purpose for buying (e.g., “check out this season’s handbags”). Again, this is reducing the number of choices available, which in turn, reduces confusion or feeling of overwhelming uncertainty.

The solution to this problem isn’t just to offer less choice and general personalisation in your emails though. To find the ‘sweet spot’, marketing automation can analyse the data in order to divide your audience into segments and then offer each segment the most relevant choices. We’ll go back to the handbag example we’ve used above and expand on that. If we have an audience consisting of parents and non-parents, we can market accordingly. Perhaps parents would like handbags with a large capacity or lots of pockets in order to fit the usual stuff you need to bring when you take a baby out. They may also like easy-clean fabrics and bags that can be easily grabbed and slung over your shoulder, rather than small bags, bags with lots of embellishments or bags that have no strap or a delicate strap etc. This data can even be further segmented; say, into groups of parents of a particular income bracket, groups that have a preference for synthetic or natural materials or groups that like vintage or modern style bags for instance.

By doing the above, marketing automation can sort these groups by behaviour and preference, which will allow you to market a small but perfect product selection to them. Even better though, marketing automation can predict the purchasing journey that new prospects will take using firmographic and demographic data. Finally, it also has the ability to adapt based on the behaviour of individuals. If a customer indicates a new situation or develops new buying habits (such as a non-parent suddenly purchasing large amounts of baby goods), the marketing automation system can cross-reference the new information with the historical information and send offers of products that are suitable for new parents but conform to the customer’s past style preferences, for instance. Marketing automation is truly unique and cutting edge because of these features; however, the fact that it’s also based on good research means it’s an innovation that has a very strong foundation.