Agastya is an award-winning product & data science leader who has spearheaded impactful initiatives across several Fortune 500 companies.
You run a premium subscription service for an award-winning wine club, delivering curated bottles to over 100,000 members each month. More recently, however, you’ve noticed a concerning trend—your membership growth has stagnated. Despite your best efforts, the ad campaigns and promotional discounts you deploy drive many net new subscriptions that quickly churn after redeeming the introductory offer. It’s a frustrating cycle that has you scratching your head, wondering how to break through this plateau and resume your growth trajectory. Unconstrained growth is the alchemy of the 21st century.
Whether you’re trying to acquire new customers for your grocery chain, subscribers for your award-winning wine-club selection, members for your music app or just trying to hire top talent for your business, traditional acquisition strategies like advertising and job postings are often not enough to capture the attention of your customers. The key to unlocking sustainable growth lies in taking a more strategic, data-driven approach to acquisition.
In this article, I hope to give my readers a high-level overview of the foundations of data-driven acquisition and how machine learning can help grow your customer base over time.
An Executive’s Guide To Data-Driven Acquisition Strategies:
1: Tapping Into The Power Of Consumer Insights—Acquiring 3P Data
At the heart of this data-driven strategy is the ability to tap into a rich trove of consumer data that provides unparalleled visibility into your target audience. This can include a wide range of information, from demographic and psychographic profiles to financial data, purchasing behavior and content engagement patterns. Several companies can append 3rd party prospect data into your ecosystem. Dun and Bradstreet, Infogroup and credit agencies have customer data that can be ingested into your data lakes to give you a holistic view of your customer base and true prospect universe.
By analyzing this data, you begin to identify the attributes, interests and preferences of your target customer. For example, you may discover that individuals with a penchant for travel and fine dining experiences are significantly more likely to convert to long-term wine club members.
2: Supercharging Your Acquisition Efforts
With a deeper understanding of your ideal customer, you can start to apply data-driven tactics to power more strategic and effective acquisition campaigns. This includes:
Lookalike Modeling: Expanding Your Reach and Maintaining Relevance
Rather than casting a wide net, data-driven strategies allow you to identify the specific individuals or households that are most likely to convert to long-term wine club members.
The key is leveraging your existing member data to build highly accurate predictive models that can identify “lookalike” prospects—new leads who share similar characteristics to your most valuable subscribers. This is done by training machine learning algorithms on the rich third-party data attributes associated with your top customers, such as their travel preferences, income range and digital engagement patterns.
Once the model has learned the defining traits of your ideal wine enthusiasts, it can be applied to score the entire prospect universe, surfacing the individuals with the highest likelihood to convert.
Pro-Tip: Be sure to train your lookalike models specifically on your “high-value” customers rather than your entire member base. This helps ensure you’re identifying prospects who are likely to become loyal, long-term subscribers—not just deal-hunters who will quickly churn after redeeming an introductory offer.
Hyper-Targeted Outreach And Physical Growth: With a deeper understanding of your target audience’s behaviors and preferences, you can direct your marketing and outreach efforts to the channels, locations and content that will resonate the most with them.
Pro-Tip: In cases where your business needs a physical presence (subscribers can come in for wine-tasting events), this data (and lookalike models) can also help you prioritize zipcodes or markets with the highest concentration of your high-value prospects.
Personalized Onboarding: Craft a customized subscription experience, from the initial sign-up to the first shipment, that speaks directly to each new member’s unique preferences and motivations. For example, knowing that your customers also like fine dining will enable your membership team to form the right cross-selling partnership. (All subscribers get 10% off their next visit to Ruth’s Chris Steakhouse.)
3: Ensuring Data Privacy And Security:
Robust Data Protection And Compliance
As you leverage consumer data to power your data-driven acquisition strategy, it’s critical to thoughtfully address the unique security and compliance considerations associated with handling sensitive data.
Below are some key elements to address:
Data Security
• Encryption: Ensure all data is protected with robust encryption methods like AES-256.
• Access Controls: Implement role-based access controls and the principle of least privilege to limit who can interact with sensitive data strictly.
• Secure APIs: Protect programmatic access to your data through the use of OAuth and API keys.
Regulatory Compliance
• Understand and adhere to all relevant privacy regulations, such as GDPR and CCPA, etc.
• Maintain detailed documentation to demonstrate compliance and be prepared for potential audits.
Data Privacy
• Respect and honor consumer opt-out preferences, maintaining a centralized list of opted-out individuals.
• Establish clear data retention and deletion policies in line with vendor requirements and your own organizational standards.
The Path Forward
By tapping into rich consumer data to deeply understand your ideal customers, you can supercharge your customer acquisition efforts—identifying high-potential prospects, targeting them with personalized outreach and crafting a customized onboarding experience that transforms them into loyal, long-term subscribers.
Forbes Technology Council is an invitation-only community for world-class CIOs, CTOs and technology executives. Do I qualify?
link