Identity based marketing: pros and cons

Identity based marketing is an offshoot of the large-scale advancement in the marketing world, which has led many brands to develop consumer-specific marketing for their brands.

Decades ago, marketing was not specialized and did not involve in-depth research before marketing to consumers. At that time, the leading marketing differentiators were based on traditional groupings such as social class, race, age, religion, nationality, and gender. Still, these were scarcely used in marketing campaigns or strategies.

In most cases in the past, marketing messages were simply tailored to one of two groups: males or females. And for years, these seemed to be okay; anything blue was considered for males while pink products were considered female products.

Over time, brands realized that using marketing that only considered a person’s gender was ineffective. Therefore, another marketing strategy that considered more consumer details was developed, which has become known widely as identity-based marketing.

Our identity is a profound expression of who we are. It is how we want to be acknowledged and addressed. It sets us apart, unites us with others, and gives us a sense of belonging.

Identity based marketing leverages the human need to be acknowledged to create personalized marketing campaigns based on meaningful identity attributes, such as people’s occupations, life stages, interests, and dislikes. This is similar to another type of marketing known as intent-based marketing which targets the intent of the customer.

It is a powerful way to engage your audience because when consumers feel seen and appreciated, they reward your brand with their business, again and again.

What is identity based marketing?

Identity based marketing is a holistic marketing strategy that considers the consumer information as much as possible. Therefore, when marketers use consumer identity data to guide each marketing campaign, customer program, client interaction, and user experience, it is called identity based marketing.

It is aimed at creating a more localized and personalized customer experience. It is the driving force in how businesses acquire and retain their customers. Marketers know that people gravitate toward brands they relate to and respond to marketing and advertising messages that in some way mirror their lives.

Identity-based marketing is the use of consumer identity data to guide each marketing campaign, customer program, client interaction, and user experience.
Identity-based marketing is the use of consumer identity data to guide marketing campaigns

Identity based marketing and customer persona

After deciding how you will gather customer data for identity based marketing, you will have to create marketing initiatives to support it. As you begin to run more personalized and customized campaigns, you’ll start increasing customer data points that keep helping you improve your customer experience and increase your brand’s customer base.

Essentially, consumers will better connect with a brand if they see themselves reflected in its marketing messages. That is what the consumer persona is needed for. The customer persona or consumer identity provides the bedrock for identity based marketing. It gives brands consumer data such as occupation, gender, life stage, status, race, religion, political affiliation, interests, etc.

Once the customer persona is identified and created, identity based marketing can help your brand deliver consistently targeted and personalized messages and offers to your customers.

Pillars of identity based marketing

  1. Identity
  2. Reciprocity
  3. Verification

Three things ensure you get it right when it comes to identity-based marketing. These include:

Identity

As the name implies, identity based marketing uses the customer persona to create personalized offers to reward customers for who they are, like being a parent, engineer, or teacher. Honoring someone’s identity creates an emotional bond. It moves them to act as nearly 95% of consumers given a personalized offer based on their identity would redeem it.

Reciprocity

Identity based marketing respects consumers as equal partners in the brand relationship. Instead of stalking prospects online, you invite a consumer community that aligns with your brand to enjoy a personalized offer. If your offer is attractive, customers accept the invitation and start a relationship with your company.

Verification

Verifying eligibility for your offer is crucial to identity based marketing success because it shows your customers the offer is truly just for them, which increases its appeal. This motivates customers to share your offer with others in their group, amplifying your efforts and driving down acquisition costs.

Getting ready for identity based marketing

Now that you know what identity based marketing is all about, the next step is to ascertain if your brand is ready for it. Below is a checklist to determine if you are prepared for identity-based marketing:

  1. You have access to data but do not know how to use it best.
  2. You are already running successful marketing campaigns but want to go deeper.
  3. You have a solid brand strategy, both internally and externally.
  4. You value privacy and are up-to-date on data privacy laws.
  5. You have an established presence in your industry.
  6. You are ready to dedicate time, energy, and resources to identity based marketing.

Why your customers want identity based marketing

Marketers are looking for new ways to connect with their customers authentically. Consumers want personalized experiences, but not at the expense of their privacy or values. This is where identity based marketing balances the scale.

Identity based marketing campaigns have integrity because they are honest and direct. Brands invite consumers into a relationship, and consumers opt-in by providing basic information, such as their email address and date of birth. The exchange is respectful and rooted in giving customers genuine value.

Why do you need identity-based marketing?

  1. Provide a relatable customer experience.
  2. It helps in streamlining your marketing.
  3. Prioritization of marketing strategies.
  4. It increases sales.
  5. Improved personalization
  6. Builds a consistent customer experience

Suppose your brand has been in existence for a while, and you have been using other ways of marketing to your customers. In that case, you might be wondering why you need to adopt identity-based marketing and how beneficial it is to your brand.

Since humanity is highly diversified, any brand that wants to be easily recognized and highly patronized will have to ensure their marketing strategies take into account this diversity to create marketing that their customers can relate to irrespective of who they are or what they do. This is where identity-based marketing comes in.

Knowing that people are more than a combination of their demographics, web activity, what they like or post on social media and that they don’t like brands surveilling them. It is vital that the data used in identity based marketing is as reliable and genuine. The information you collect through an identity based marketing campaign is verified and actionable because it comes directly from the customer. This information is usually obtained by providing exclusive offers to a consumer community, and members give you their data to access these offers.

This first-party data is like gold because it offers insight into consumer expectations and other relevant information needed to create your consumer identities and, by extension, identity based marketing.

With identity based marketing, you can increase your marketing return on investment (ROI) by creating a highly personalized consumer experience. When your marketing efforts cater to your customers’ individual needs in this way, they will definitely have a better customer experience whenever they engage with your business. Thus, the higher the likelihood of them patronizing your brand and even becoming your regular patrons.

Below are more reasons why your brand needs identity based marketing:

Provide a relatable customer experience

Identity based marketing aids your brand in providing a relatable customer experience. This is when your marketing messages or offers are designed to achieve the best user experience by providing specific, personalized, and real-time interaction in ways your customers can easily relate to.

Delivering a relatable customer experience requires you to be one step ahead by using the customer data you have already collected, which allows you to add value to the customer by enhancing and building on previous interactions.

For example, if a consumer visited your website to get a scarf and leaves without completing the order, an effective way to provide a relatable customer experience can be by sending out an email with that same scarf alongside a list of similar scarfs, which are either cheaper or more expensive. You could also put out an ad on Instagram with the same scarf targeted at that person.

In this way, you are showing that particular customer what they want to purchase and creating an impression that your brand cares about the customers’ choice. This is a strategic way to reconnect with your website visitors with targeted ads as they browse on the internet elsewhere, adding to their overall customer experience.

It helps in streamlining your marketing

One of the reasons why brands are beginning to adopt identity based marketing is because it helps streamline your marketing to your target audience. When you have created consumer identities, you can segment your customers into groups that put together like-minded people with similar occupations, behaviors, interests, and characteristics.

When using consumer data to create identities, ensure you expand beyond demographic information, by also including psychographic characteristics such as customers’ beliefs, values, and attitudes. These will aid you in better predicting what kind of marketing would work best for what group, how your customers will respond, and how loyal they will be to your brand.

When creating these consumer identities, note that people evolve. Therefore, you should review your groupings periodically to ensure they tally with current realities.

For example, the way you market a product to a group of 20-25-year-old females in the United Kingdom will not be the same way you market to 65-75-year-old males in the United States. This is because the two groups are distinctly different based on age, gender, location, and life stage. Therefore, what would catch their attention will significantly differ.

Prioritization of marketing strategies

For many brands, prioritizing which marketing initiative gets budget, time, and resources can be pretty daunting. However, identity based marketing can effectively leverage your customer data to prioritize your marketing strategies.

Marketing initiatives that have a customer persona will naturally be prioritized over those initiatives that do not have a customer persona. This is because the former marketing initiatives are well-targeted and backed up with data. In contrast, the latter marketing initiatives have an unclear direction or have no proof that they will bring value to the business.

For example, if you are to choose between marketing to moms generally and marketing to moms who live in Canada and are between the age of 25-30, identity based marketing points you to the latter because it is well-targeted and is backed up with data associated with their geographical location and age as opposed to the former which is vague.

It increases sales

Any brand that wants to increase sales can do so through identity based marketing. Through this kindof marketing, you can readily create marketing options that your audience will naturally be attracted to and want to buy into.

Using the different consumer identities you have created, it is easier to pinpoint which of these identities have had the highest number of purchases associated with them; this, in turn, aids you in running more marketing campaigns targeted at them, which invariably increases your sales.

For example, if your brand’s mobile marketing manager wants to run a social media campaign using a consumer identity that has an 85% chance of increasing sales by 67%, and your service marketer wants to create a podcast to promote a new product to the masses, knowing that the mobile marketing manager can increase sales through her identity based marketing makes it the go-to option as opposed to the podcast which has no impact on your sales.

Improved personalization

Unlike other marketing options, identity based marketing aids your brand in developing marketing strategies with improved personalization. Using the customer data you have at your fingertips, you are provided with the opportunity to improve on personalizing your customer’s experience with your marketing initiatives.

Many brands have yet to implement a way to effectively collect customer data, but those who have are ahead of their competition in terms of providing a more valuable and personalized experience, hence, the need for identity based marketing.

Personalization does not mean that you have to make sure every customer receives a unique and customized message, rather, it is about leveraging your customer data and segmenting customers with similar characteristics and behaviors, then providing them with marketing messages that cater to their customer identity.

Builds a consistent customer experience

Your customers will thank you and praise you when you’re able to create a customer journey that is consistent. This can be done by taking advantage of the customer identity data that you already have. Creating a customer journey that is consistent, means you need to make sure your customers can depend on you. Your customers expect their next interaction with you, to be informed by their previous interaction.

This is why having a consistent customer journey is important because it helps you improve customer acquisition. Consistency in your marketing should extend beyond a call to action (CTA), however, it should include every touchpoint you have with your customers. This means ensuring every message, promotion, and advertising consistently reflects your customer’s identity aligning with your brand identity.

Pros of identity based marketing

  1. Identify the consumer community for your brand
  2. Creates a personalized offer
  3. Invite consumers to take advantage of the offer
  4. Activate word of mouth
  5. Reengage to build long-term relationships

The consumer identity literature emphasizes the importance of a clear fit between brands and customer personas because consumers prefer brands positioned around the identities they possess. Therefore, identity based marketing that explicitly links brands to consumer identity should be most effective. Below are more pros of identity based marketing.

An infographic showing the pros of identity based marketing
An infographic showing the pros of identity based marketing

Identify the consumer community for your brand.

Using the customer persona, brands can easily identify the consumer community suitable for their brand. For example, if your brand is into fashion and media, college students will likely be your target consumer community while marketing to the military can help you reach outdoor enthusiasts and do-it-yourselfers.

Creates a personalized offer.

It aids your brand to develop an offer that appeals to your consumer community by creating personalized offers that will appeal to your customer personas such as creating offers for single parents, teenagers, or mechanics.

Invite consumers to take advantage of the offer.

It invites consumers to take advantage of the offer you make across your existing channels. Since you already have well-developed consumer identities, you can easily raise awareness and allow eligible customers to opt-in.

Activate word of mouth.

Identity based marketing increase awareness within the consumer community through testimonials that members share. These testimonials can be pictures, videos, blog posts, or audio. They are generally called earned posts and are the modern word of mouth which spreads your brand’s offers.

Re-engage to build long-term relationships.

It aids your brand to integrate the rich information provided by the consumers in your data collection to nurture and reengage consumers to build loyalty and long-term relationship with your brand.

Cons of identity based marketing

  1. Consumer alienation.
  2. It sometimes kills sales.
  3. Multiple identities.

You have likely seen many identity based labels in your local store; brands labelled as for men or women. But do you buy them? Or do you turn away, even if you are part of one of the groups these products claim to be designed for?

Below are some cons of identity based marketing:

Consumer alienation

According to Amit Bhattacharjee (Dartmouth College), Jonah Berger (Wharton School of the University of Pennsylvania), and Geeta Menon (New York University), “While people may be drawn to brands that fit their identity, they are also more likely to desire a sense of ownership and freedom in how they express that identity. Identity marketing that explicitly links a person’s identity with a brand purchase may actually undermine that sense of freedom and backfire.”

For example, If you are trying to market a product to men, it might seem logical to label the product as “for men” and produce a color stereotypically thought to appeal to men, such as blue. However, studies have revealed that such appeals are actually more likely to turn away men and other groups targeted in similar ways. Another study conducted during the 2016 presidential election found that women rejected campaign rhetoric suggesting that they should vote for Hillary Clinton because she is a woman.

It sometimes kills sales

According to a study published in the Journal of Consumer Research, “contrary to the traditional thinking about identity marketing, our research shows that people who care deeply about an identity are not receptive to messages that explicitly communicate how a brand fits with their lifestyle.”

The researchers ran a series of five studies that compared two types of identity-based marketing, messages that simply referenced consumer identity or messages that explicitly tied consumer identity to brand purchase. Participants were first asked to answer questions about the importance of a given identity in their overall life. They then viewed an advertisement for a brand that appealed to that specific identity. The advertisement used a headline that either referenced the identity or explicitly linked it to a brand. Participants then rated their likelihood to purchase a product from within the brand.

Study results showed that explicit identity-based marketing messages backfired with consumers who cared about the specific identity and resulted in a lower likelihood to purchase the product.

Multiple identities

The way people perceive themselves can be fluid as the way people view themselves and their identity is constantly changing. As a result of this, identity based marketing might be ineffective.

For example, a particular identity based marketing tailored for colored women might not appeal to a woman who is biracial. So also marketing for students might not appeal to students who work alongside studying. Because their multiple identities are not reflected in the brands’ marketing.

Conclusion

Some consumers find it charming when brands specifically point their identity to a product whereas others find it annoying when they are told what they like, but enjoy the sense of ownership and freedom in how they express their own identity and respond to their personal preferences.

Identity based marketing can be either beneficial or detrimental to your brand. It all depends on how you go about it. It has come to stay and it is left for you to decide if your brand needs it or not.

A video how Identity based marketing drives customer acquisition

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