By Devon Kinkead, CEO and Founder
Ads are most effective when they validate a customer need. For example, Google AdWords works because the search term validates the need. However, ads are ineffective when the prospective customer need is unknown—for example, I don’t have diabetes so I’m unlikely to buy Jardiance, even if the advertising I see is well-executed.
Existing customers have little tolerance for irrelevant advertising. That’s why you see so many recommender engines from Netflix, Amazon and other companies telling you things such as: "Customers who bought this flashlight, also bought these batteries.” Recommender engines leverage known customer preference data to suggest useful products and services. In short, Amazon, Netflix, and other retailers are training customers to expect good recommendations. That’s why it’s important to deliver.
So, the first order of business in advertising is to validate that the customer has a need. Google does this automatically via the search term—e.g., “mortgage rates”—whereas Amazon and Netflix try to guess customer needs based on past purchases. These savvy retailers don’t advertise without user input on preferences. Do you see Google advertising products on their home page? No, you only see the search box.
So, how do you validate needs for financial services—which are largely driven by major life events—in the absence of search, selection or purchase histories? That’s where Micronotes comes in. We do it by asking good questions. More on that in part 2 of this post.