3 Reasons Marketers Should Use a Consumer-centric Marketing Mix Model

By Yeimy Garcia Smith, SVP, Circana and Kimberly Keating, Sr. Director, Global Marketing Measurement, Circana 

Every brand has a pool of consumers they want to reach. Within each pool live different cohorts. To maximize sales for their brand, marketers and their partners allocate spend across multiple channels, tactics, and campaigns. But gauging the effectiveness of a particular marketing mix against a desired pool of consumers is challenging, because most marketing measurement programs only report the average across all consumers – and as marketers know, there is no “average” consumer. Marketers are often left triangulating hypothesis-driven results, which is an error-prone process. 

The best way to measure marketing mix effectiveness is to adopt a strategy that puts the consumer at the center of the measurement model. A more consumer-centric marketing mix model (MMM) can integrate media data with consumer-level purchase data. This enables marketers to evaluate the performance of different promotional and marketing strategies by consumer segments that are important to brands, ensuring maximum impact in targeting and executing campaigns for strategic audiences. A consumer-centric MMM can measure a host of different segments, which marketers and agencies need to study and act on. These include: 

• Demographics, including generational segments, households, life stages, and households with or without children 
• Purchase-based groups, such as heavy, medium, or light buyers, or new, lost, or retained buyers 
• Uniquely defined segmentations based on a brand’s priority targets 

Benefits of a consumer-centric marketing mix model

A consumer-centric MMM can help marketers:

1. Determine the effectiveness of media, including retail media networks 

Knowing how specific consumers segments respond to each marketing channel brings more precision and clarity to budget allocation decisions. It allows marketers to assess whether tactics and messages resonate with intended targets and helps uncover the emerging channels with which consumer segments are most likely to engage. Marketers can also better estimate the impact of future changes.

2. Increase the value of a consumer while diversifying overall customer base

Advertising relevant to diverse audiences can create a halo effect across multiple consumer segments and improve incremental sales lift by 10 times. Reviewing marketing mix results by consumer segments allows marketers to identify tactics and creative strategies that maximize consumer response and avoid mistakes that can come with targeting too broad an audience.

3. Enhance customer experience

Improving messaging based on consumers’ response can enhance the overall experience with a brand while making it more engaging, interactive, and enjoyable. Increased engagement will also help strengthen the brand relationship and customer loyalty, giving brands an edge over their competition.

To reap the full benefits of consumer-centric MMM, marketers should ask their marketing mix providers the questions below to understand their approach to consumer-centric measurement:

• Do you have actual consumer purchase data that can be aligned to MMM results?
• Is it possible to break down consumer purchase data by key groups, such as generational segments, households with or without children, life stages, and buyers with heavy/medium/light purchases?
• Is the consumer purchase data flexible enough to adapt to my brand’s own custom segmentations?
• Is it possible to provide driver-level marketing mix results that are actionable against key priority consumer segments?

Want to learn more about consumer-centric measurement in your marketing mix? Reach out to us at GrowthInsights@circana.com