Rus Ackner

For retail pharmacy businesses facing fierce competition, having the ability to accurately target consumers is one of the ways they can set themselves apart. This requires segmenting customers to ensure the targeting is granular and the messaging impactful. That means looking at the real-world behaviors of target audiences. While data on digital impressions and clicks from your customers is valuable, data on how customers behave in the real world is much more telling. Why? Because it’s probably more useful for your business to be able to prove that a specific ad campaign drove customers to visit your store. The best way to do this? Offline intelligence.

Using offline intelligence to segment customers

Offline intelligence is the key to attributing campaigns based on real-world actions. By measuring the incremental impact of your campaigns in the off-line world, you can see how your campaigns are actually changing consumer behavior. Advanced off-line intelligence solutions now provide the ability to measure incrementality at the consumer level, which can enhance your segmentation and targeting strategies. Incrementality at the granular level enables you to understand a campaign’s impact on different types of consumer groups, so you can drill down on how each channel influenced consumers differently and target them accordingly.

For retail pharmacy businesses like yours, incrementality at the consumer level can allow you to hone in on campaign performance to differentiate between loyal consumers who would have visited your store regardless of advertising and those new visitors who were influenced by your campaign. You can divide consumers into four key buckets based on their value to your brand:

• Loyal audiences — Let’s begin with the loyal audiences, or those who had high loyalty to your brand prior to your campaign and were not influenced by your advertising.

For example, this bucket could include a group of Walgreens’ loyalists who were not swayed by a BOGO offer for sunscreen over the summer. They continued visiting Walgreens just as much as before the campaign and were not receptive to this new messaging.

This might be a good segment of customers for Walgreens to target with messaging for its loyalty program, MyWalgreens, which recognizes the loyalty of these customers and offers them customized deals to increase their value to the brand. The same goes for other retail drug stores with loyalty programs.

• High-value audiences — High-value audiences are similar to loyal audiences in that they have demonstrated high loyalty to your brand prior to your campaign. However, the key difference with this segment is that they were positively influenced by your campaign to visit your stores.

For example, this group could include consumers who frequently visit Duane Reade but who wound up seeing an advertisement for a free health screening and then visited a store because of that.

This is a great segment to target with offers, as these customers are already loyal to your brand and would be likely to buy your new products once they learn more about them — or see them in the store. Furthermore, this is a strong segment to retarget or build look-alike models from in order to drive similar customer behaviors.

• Low-value audiences — While low-value audiences might not sound very appealing to target, they can reveal key insights for your brand. This is the segment of consumers who had little to no loyalty to your brand prior to the campaign and were not influenced by it.

For example, this bucket could include consumers who normally don’t visit RiteAid stores despite seeing ads for them. While this segment was not responsive to RiteAid’s messaging the first time around, it does not mean they never will be in the future. For example, what if one of those consumers needed a supplement after a doctor’s visit? If they’re not very familiar with the different retail drug stores, where they go will be based largely on their awareness of retail drug store brands. Since they’ve been exposed to RiteAid’s ads, those types of consumers are more likely to purchase that supplement from a RiteAid — assuming they haven’t seen ads for other drug store retailers.

In this way, targeting this segment with more generalized ads with the goal of brand awareness can eventually convert customers in this group to buy. However, of the segments we’re discussing in this piece, this is the least valuable for your brand to target in the short term.

• High-potential audiences — Finally, let’s consider high-potential audiences — perhaps the most lucrative segment of consumers for your brand. This is the group of consumers who had low or no loyalty to your brand prior to your campaign, but who were positively influenced by it.

For example, let’s consider a group of people who have no loyalty to pharmacies — they’ll visit a Duane Reade or CVS equally, based on whichever is more convenient. After they saw a campaign for CVS’ HealthHUB locations, they visited a CVS location to pick up some toiletries.

This segment presents an excellent opportunity for targeting, as they are potential new customers who are very receptive to your messaging. This is a great group to retarget or build look-alike models from, in order to access groups of like-minded new consumers who might be influenced to purchase from your brand.

Increasing customer lifetime value

Ultimately, you want to maximize the value from all of these buckets. These segments of consumers are not immutable — ideally, you want to move customers up the value chain into different buckets, to increase their lifetime value to your brand. So advertising should be focusing on converting low-value customers into high-potential ones, high-potential customers into loyal ones, and eventually loyal customers into high-value customers. In a very competitive market like retail drug stores, incrementality can help you increase your piece of the pie — maximizing the number of customers who will shop at your brand.

Rus Ackner is chief marketing officer of Cuebiq.