How marketers are creating long-term customer relationships by leveraging householding

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Rasika Narang, senior vice president, marketing, Viant

Humans are social beings, wired for connection. It’s no surprise, then, that the most successful brands foster long-term relationships with their customers. After all, marketing has always been about building an emotional link that creates a long-term alliance, which results in repeat usage and purchase. Neuromarketers point out that consumers are more inclined to buy based on their emotions than on logic. In fact, psychologists suggest that 80% of decisions are based on emotion; rational facts are used to validate our choices.

These days, though, many marketers are distracted from those core truths by the plethora of data and technology available at their fingertips. Despite this influx of data, brands still need to build genuine connections with customers — connections that, at their best, feel like trusted friend-like relationships. In fact, according to a Deloitte report, 60% of loyal customers use words such as “love,” “happy” and “adore” when talking about their favorite brands. That’s the kind of language they’d use when talking about family, friends and pets. 

‘One-to-some’ strategies connect empathy and relevance for the consumer

In today’s marketing world, connection is crafted by reflecting empathy and relevance to the unique circumstances of every customer. This one-to-one approach is the gold standard that many seek today, but in a privacy-first future, many are shifting to a “one-to-some” approach. 

One could argue that a one-to-one approach works on platforms — owned platforms specifically — where consumers expect brands to know them. When it comes to digital advertising across the open web, a one-to-some approach provides a degree of intimacy and relevance along with the separation that most consumers would be comfortable with.

One way of accomplishing this one-to-some approach is by speaking directly to the members of the household unit, also known as householding. A household is a cluster, a cohort in its own right with unique attributes. Add to that the significant buying power a household unit possesses, and it makes for a valuable audience segment.

Householding: A proven idea, tailored to the digital age

The idea that a household operates as an economic unit is not a new one. TV advertising and direct marketing have been leveraging the potential of the household for decades. Studies have long shown that most purchasing decisions are made at the household level — and not just purchases like a car or a family trip to Europe. In all, 88% of purchase decisions are made or discussed at home.

Today, many of the most successful companies capitalize on this. Think about brands like Amazon and Netflix; they’re creating value for all members of a household. That’s why householding is the key to helping brands provide value for and create meaningful relationships with their customers now and in the cookieless future.

Thanks to the rich data available and powerful approaches to identifying household cohorts available today, the makeup of households is understood better than ever. Household composition impacts the size of the opportunity for goods and services. Family life stage is also an important factor — clearly a young adult couple without children will have different needs from a couple with three kids. 

There has also been a shift in the way families shop; children are much more involved with purchasing decisions than in earlier eras. In one study, parents reported involving their children in purchasing decisions because their kids will be using the item, because their opinion matters to the parent and to teach decision making. By leveraging the right kind of data, marketers can deliver relevant messaging across devices in a household and create connections with this powerful clustered unit.  

Privacy-compliant personalized messaging made easy

On one hand, consumers now expect a certain level of advertising personalization and relevance. On the other, though, they’re concerned about privacy. In fact, 74% of consumers say they are concerned about the privacy of their data. At the same time, they acknowledge that advertising funds the free flow of information and ideas across the web. This isn’t lost on the advertising industry, which is chasing down 80 or more possible identifiers to solve for both desires. Most of them, unfortunately, create further fragmentation, require industry-wide adoption or are built on the flawed premise that consumers will be willing to log in across the open web.

Householding addresses this current tension, enabling marketers to pivot from one-to-one messaging to one-to-some messaging, thereby prioritizing privacy while also ensuring reach, personalization and campaign and performance management.

Future-proofing the creation of authentic customer connections

Even in the midst of our current industry upheaval, marketers need to know that the solutions they adopt will endure, and they can rest easy knowing that householding is here to stay. After all, the home is where consumers expect and readily accept advertising.

By leveraging households as long-standing cohorts, marketers can build important relationships with their customers now, without waiting for a new solution or industry-wide change. There’s more opportunity than ever to create authentic connections with their customers and prospects, but to do so successfully, marketers must lean into a proven relationship-building strategy like householding combined with the data and technology solutions to make it addressable.

Big tech companies like Google and Apple are changing the terms of how marketers gather data. However, they are changing the rules of play in their favor, building ever-higher walls in what should be an open and free internet. Fortunately, there is a lasting solution — one that relies on proven ideas made even more powerful with digital tools. Householding builds long-term customer connections, giving consumers and brands the benefit of targeted advertising while respecting evolving ideas on privacy.

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