"We believe the winning companies of the future have a different view of marketing," IBM's Yuchun Lee told me during this week's episode of Marketing Smarts, "In their view, every communication has to be relevant. That has to be the bar."

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He then added something very interesting, "The level of relevancy should be felt by the consumer individually, so that it feels like a service."

Data: The Key to Relevance

How do you make sure that the messages you send out, the offers you make, and the content you create are relevant?

Not surprisingly, Yuchun, who cofounded and led the marketing analytics firm Unica (acquired by IBM in 2010), says the key is data. And the specific data that marketers and the companies they work for can call on in order to make better decisions and focus their marketing efforts can, according to Yuchun, be put into three buckets:

  • First, you have transactional data, which includes all the information you have about previous purchases and interactions with individual customers.
  • Second, you have digital behavior data. This data, as the name implies, covers what people are doing and have done online, from surfing patterns to all the various digital interactions they may engage in across your web and mobile sites. This data can tell you, for example, which pages or sets of products on your site people have spent the most time exploring (or, alternately, ignoring).
  • Third, you have social data, which includes all data related to the social graph as well as any social information that customers may have chosen to share with you (or, perhaps, unwittingly shared with you by agreeing to sign-in to your site using Facebook or Twitter).

Of the three data types, the transactional data is of course the most cut-and-dry: This person bought this. We know what that means. The digital behavior data and the social media data, however, rife as they are with intention and sentiment, can be, as Yuchun puts it, "less transparent."

"There may be relationships between customers or customers and prospects in the social graph that are not visible to the company," he elaborated while emphasizing that "digital behavioral data and social data are both much more predictive…They are what people are doing digitally prior to a purchase."

In other words, if you know what someone was doing right before they made their last purchase, and you see them doing it again, you may have a great opportunity to influence their next move. Why? Because you have a better notion of what, at that moment, might be most relevant to them. 

From Relevance to Service

The relative strengths and inherent weaknesses of the various data types aside, Yuchun insists that "all three together paint a fuller picture of what an individual customer is doing or what the next set of things is that the person is interested in."

"And most businesses," he said, "realize that it is paramount to understand all that so that every communication is relevant to the individual."

Your messages need to be relevant, in a the way that data can powerfully enable, because consumers are increasingly able to "filter out unwanted messages and promotions." In such a world, it won't cut it to try to become a "better and better promoter," Yuchun says. Instead, you have to get better and better at serving your customers via marketing.

Yuchun provided two examples. Consider, he said, the person who just bought an iPhone 5. Sending that person a message about the 10 most popular accessories or the 5 most useful apps for the new phone means sending something timely and helpful. 

Alternately, think of the new homeowner. Receiving a catalog focused on window treatments and interior decoration tailored (via data) to their taste doesn't feel like junk mail; it feels like useful advice.

In other words, by sending this specific information when you did, you weren't just marketing, you were providing a  service.

Heeding the Critical Cues

So, yes, consumers and customers are getting better at filtering out the marketing noise. At the same time, however, they are willing to engage in a value exchange with companies and provide more information about themselves in return for more targeted information, special treatment, and, well, service. 

"Whenever there's a good relationship," Yuchun said, "where someone is willing to friend a company or willing to have a dialogue…they are exposing a bit more about themselves. And those are critical cues for a company to follow with things that are relevant to that individual." 

Following those cues creates a kind of virtuous circle: the more they share, the more relevant your messages can become, thereby building trust, which leads to more sharing.

To keep the circle going, all you need is one thing: in the words of Yuchun, "the philosophy and strategy to treat every communication as a service."

If you'd like to hear my entire conversation with Yuchun, you may listen above or download the mp3 and listen at your leisure.You can also subscribe to the Marketing Smarts podcast in iTunes or via RSS and never miss an episode!

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