Faraday is pleased to announce a new partnership with Iterable, a growth marketing platform that makes it easy for companies to effectively engage their customers with relevant messaging.

The Faraday AI Platform helps consumer marketers optimize growth initiatives at every stage of the customer lifecycle by delivering predictive insights to a wide range of martech and adtech systems. The new integration enables mutual customers to leverage Faraday's AI-generated predictions — such as likelihood to buy or churn, lifetime value, and persona — in their Iterable workflows.

These predictive insights help enhance the user's ability to segment leads and customers based on their predicted likelihood to purchase specific products, projected lifetime value, and/or their persona cohort.

Armed with these segments, users can easily activate and automate cross-channel campaigns with optimized discounting strategies, informed product recommendations, and personalized ad creative and content. The integration supports the delivery of this information in real time via API, or on a scheduled basis (e.g. daily, weekly, monthly).

Interested in operationalizing predictive marketing workflows? Get started today.

• Already using Iterable? Schedule a demo with Faraday
• Already using Faraday? Schedule a demo with Iterable
• Already using both? Learn how to integrate Faraday with Iterable

We're excited to announce that we'll be attending Solar Power International this September. Having gotten our start in solar, our end-to-end machine learning platform has been helping innovative residential solar companies grow and market their services more effectively since 2012.

This year we'll be offering one-on-one demos of the Faraday AI Platform. Stop by to see how enriched consumer data and predictive machine learning can help you identify the best new leads and better engage your current customer base.

Our platform supports your omnichannel strategy — from digital marketing to canvassing initiatives to direct mail campaigns — by leveraging enriched consumer data on the household level that lets you target customers who live in homes most suitable for solar. This data, used with AI-driven geospatial intelligence and real-time lead scoring, puts the best-fit leads in front of your team.

If you plan to be at SPI this year, make sure to stop by booth 5632 for a one-on-one look at the platform. You can learn more about Faraday and book an appointment with us in advance here.

The use of third-party data isn't new, but it's becoming a necessity as businesses shift to a customer-centric approach. Marketers everywhere are realizing that first-party data is only the tip of the iceberg when it comes to understanding their customers.

Pitney Bowes and Forrester report that 92% of marketing and data analytics professionals agree that the rise in digital technologies and interactions has increased the need for bringing outside data into their companies. While it may be as simple as understanding your existing customers' household and financial standing, with third-party data you can also gain deep insights into your leads on a known-identity basis.

Overall, leveraging third-party and first-party data adds breadth and depth to your customer insights, informing better branding and messaging decisions, personalization efforts across channels, and taking much of the guesswork out of targeted and location-based marketing campaigns.

Customer identity resolution

The capability to bring together first-party data from various sources and third-party data to compile a unified picture of each customer is increasingly valuable. In 2018, spending dedicated to identity data assets grew by more than 50%, to a total of $846MM.

Personally identifiable information (PII) is crucial to connecting the dots across multiple touchpoints (online and offline) to form a holistic picture of your customers and prospects so you can reach them with content that will resonate with them through the channels that matter.

Using third-party data to improve personalization

In a time when almost all consumers prefer ads and products that are relevant to them, knowing how and when to serve your target market is crucial to effectively engaging your customers. According to Forbes, right now, 46% of marketing executives are not where they want to be in terms of delivering personalization, and 57% say that they hope to advance their personalization initiatives over the next year.

Enriching your first-party data with third-party information on your customers' financial, household, transactional, or lifestyle categories gives you a clearer idea of what your customers look like in real life.

To take it a step further, enriched customer data helps machine learning algorithms build better models. Cluster models, for example, sort individuals into distinct groups based on common attributes. These groups, or personas, can affirm your intuitions about what your customer base looks like, but may also surprise you by revealing significant groups you hadn't known about or previously considered important.

How third-party data helps optimize ad targeting and nurture campaigns

If you're using predictive lead scoring capabilities, the accuracy and precision of those scores improve with the quality and quantity of third-party data that you introduce. This not only benefits your leads' experiences, as they'll receive content that better aligns with their interests and where they are in their customer journeys, but it will save you time and money when you're deciding how to prioritize your outreach.

A popular way of leveraging third-party data with predictive modeling for digital marketing is Facebook lookalike audiences. But since the platform shut down advertisers' access to this data in April of 2018, gaining deep insights from Facebook has been a struggle for many businesses that are trying to better understand their audiences and target the right consumers.

If you enrich your first-party data with third-party attributes, you can gain insights on a granular level that you aren't getting with Facebook and other marketing channels. You can then segment known-identity audiences based on certain attributes — or develop in-depth personas for segmentation — and push the appropriate ad creative to those individual segments with the goal of increased, personalized engagement.

This goes for not only new leads you're nurturing, but also for the customers you're actively engaging. Pitney Bowes and Forrester's survey showed that 83% of respondents realize timelier and contextually relevant customer experiences are a high priority when it comes to optimizing their marketing strategies. With nurture campaigns, timeliness and relevance are key components for success.

Another advantage of leveraging third-party data is the ability to match site's captured emails to real people. This allows you to bucket leads into certain personas for more personalized nurture campaigns that will pull them through their customer journeys with you. Your leads are more likely to receive messaging that aligns with where they are in their individual journeys, and it will save your team time and money when you decide how to prioritize your lead outreach.

Enhancing geospatial analyses with third-party data

Geographic data has obvious benefits, but incorporating additional third-party in geographic analyses improves the quality of the insights. Knowing where your ideal customers live is one piece of the geomarketing puzzle, but gaining an understanding of how your audiences will best interact with your ads offline is achieved by knowing more than just their geographic location.

Attributes like household information, transportation preferences, and lifestyle data helps you prioritize where you place ads, as well as where you might establish new brick-and-mortar presences. A subway ad or billboard placed in your customers' neighborhoods can be a great way to advertise your e-commerce business for those who don't live near a storefront, but for customers who are in your brick-and-mortar trade zones, perhaps a direct mailer advertising an in-store sale would better drive business.

From a creative perspective, audiences can vary widely depending on their physical locations, so the messaging and images chosen for your campaigns should be curated for specific audiences in particular geographies. Providing relevant content increases your chances of audience engagement, so capitalizing on the insights provided by third-party data is a necessity.

This is the case with SEM advertising, which segments audiences by geographic location. With the insights gained from third-party data, you can optimize your SEM spend by targeting areas where higher-value customers reside, spending less on areas that aren't as likely to bring in revenue.

Using third-party data ethically

With the rise of regulations like GDPR, privacy and validity of data are prominent concerns when using third-party data and PII. However, there are ways to ensure that your customers' and prospects' privacy is protected. You want to be sure your data comes from a verified source, isn't dangerously invasive, and is leveraged to benefit the customers you're targeting.

Social scraping is a common tactic, and it can provide large categories of data on behavioral tendencies, consumer habits, and some personal information, though this data may not always be entirely accurate. At Faraday we avoid social scraping in favor of canonical sources of information from established third-party data vendors. Vendors like Epsilon verify the accuracy of the high-quality data we license and leverage for our partners.

Faraday's Director of Data Science, William Morris, notes that we sidestep many consumer privacy issues by dealing with datasets that categorize data, such as consumer purchases, by type of product and frequency, rather than the exact stores where those purchases are made. This leads to a significant lift in machine learning models' predictive capabilities without being invasive from a privacy standpoint. Additionally, each of our clients' customer data is siloed using industry-standard practices to protect the privacy of each clients' customers.

Faraday also actively works to build models that are agnostic to a person's membership to protected classes. We exclude potentially harmful categories like ethnicity, religion, or primary language data, as these can disenfranchise certain groups of the consumer population. As an additional security measure, we employ a suite of tools for post-model checking to ensure that attributes that could indicate a person's race or class don't make the models biased or adversely impact a population.

Taking into consideration these types of ethical practices is important when exploring your own use of third-party data.

You've probably noticed the growing hype around artificial intelligence (AI) in marketing. From chatbots to content creation to programmatic advertising — it seems like every other MarTech or AdTech platform is baking in some sort of AI capability.

With so many applications, it's easy to lose sight of what's most important in implementing an effective, optimized marketing strategy: deeply understanding your customers.

According to Forbes Insights, only 13% of businesses express a high degree of confidence that they are making the most of their customer data.

Stepping back, what does AI even mean for marketing?

At a high level, AI refers to a computer's replication of some aspect of human intelligence — pretty ambiguous, right? AI, as it exists today, is an umbrella term for a range of computer-enabled data analysis techniques — the most relevant and widely-practiced in marketing being machine learning.

Machine learning (ML) is the process of training computers to “learn” to recognize important patterns and trends in large datasets, with the goal of developing data models that can quickly categorize new data inputs and predict likely outcomes.

So, what does that mean for you, the customer-centric marketer? When using your customer data, or training data, as the basis of machine learning models, you can start to generate deeper customer insights and make better behavioral predictions. These can be around your prospects' and customers' likelihood to convert on certain campaigns, increase their purchase frequency, churn or lapse, or something much more specific.

Leveraging machine learning in your marketing strategy is no longer a luxury — it's a necessity. As competition increases and ad space gets more crowded, consumers have more choices of businesses to engage with, making machine learning critical to efficiently reaching the right people and keeping your customers engaged.

ML-driven insights marketers can't ignore

It should come as no surprise that the world's top brands are efficiently scaling growth by leveraging machine learning to prioritize their resources and personalize experiences across their customer lifecycles.

Here are some of the most important ML-driven insights marketers are using to craft better customer experiences and optimize their performance.

Behavioral insights and predictions

A vital piece of giving your prospects and customers a memorable experience with your brand is knowing who to engage with and when.

Have you ever been in the position as a consumer where you're targeted with ads that don't align with who you are or where you are in your customer journey? Perhaps you see an ad trying to get you to buy an item you've already bought, or offering you a first-purchase discount code when you're already a customer.

As a consumer, these experiences can be annoying and frustrating. And as a marketer, your message can end up diluted instead of impactful.

Behavioral predictions are crucial to proactively engaging your customers. Rather than reacting to your customers' behaviors, you're able to anticipate them and market to your most valuable customers at the right time, with content that corresponds to where they are in their journeys. This helps you prioritize your resources, optimize your marketing spend, and cut through the noise to better reach your target audience.

How can machine learning help predict customer behavior?

Relatively straightforward machine learning algorithms can uncover predictive patterns hidden deep in your customer data. The random forest, or random decision forest model, analyzes your historical customer data, building a series of decisions trees to predict the likelihood that future inputs (e.g. new leads) will result in a target outcome (e.g. make a purchase).

If you advertise on Facebook, you've likely come across lookalike audiences, which are generated in a similar way. Using lead conversion as the example outcome, these models essentially predict the degree to which a new lead best “looks like” leads who've successfully converted to customers in the past.

Naturally, the data used to train or build your behavioral models will influence how they make predictions. Done properly, these predictive insights can have a tremendous impact on your return on ad spend, overall customer acquisition costs, and customer satisfaction.

Persona-based insights and predictions

While predicting your customer's next move is immensely helpful in reaching the right people at the right time, it's not where the road to truly optimized marketing ends. Effective and thoughtful engagement requires an understanding of who your customers are as real people, so you can create hyper-personalized experiences that evoke emotional responses.

Salesforce Research revealed that 84% of customers say that being treated like a person is very important to winning their business. If you show your audience that you understand what motivates them to interact with you, whether they're an early prospect or a loyal customer, the relationship and trust between you and your customers grow stronger.

So how can machine learning help you personalize experiences at scale?

Customer clustering

Buyer personas, semi-fictional representations of your target customers, are instrumental in creating personalized content and creative that truly resonates with them. Traditionally, personas were created using basic demographic data, some psychographic data from surveys or focus groups, and a good amount of human intuition. While this approach has worked for years, it leaves too much room for human bias.

Customer clustering leverages a different machine learning technique than behavioral modeling: unsupervised machine learning. Rather than uncovering patterns that are predictive of a known outcome (e.g. likely to convert), unsupervised algorithms, like K-means, sort data into distinct groups based on shared attributes. The resulting groups, or clusters, form the foundation of unbiased, truly data-driven personas.

As time goes on and new data is collected, running the clustering algorithm again may reveal new emergent personas, enabling you to refresh your messaging, creative, and other personalization efforts to stay relevant as your customer base evolves.

Burrow, a disruptive direct-to-consumer furniture brand, uses ML-driven personas to identify what color couches their audience segments see in targeted ads. They found that customers who are older, live in single-family homes, and have kids are more likely to buy couches in darker colors; customers who are younger, live in apartments, and have few or no kids are more likely to buy couches in lighter colors. With these insights, Burrow was able to push creative that reflected these attributes to the audiences that possessed them.

Location-based insights and predictions

Virtually all consumer-facing companies need to consider location in their marketing strategies, whether it's out-of-home advertising, brick-and-mortar marketing, or geotargeted search campaigns. However, these tactics are often expensive and difficult to do well.

Geospatial intelligence refers to a suite of geospatial analysis techniques enhanced with a combination of behavioral and persona-based insights. Whether you're considering increasing investment in your existing markets, expanding to new ones, or looking to drive foot traffic to specific retail or branch locations, incorporating predictive insights into your geospatial analyses can drastically improve ROI.

• Predictive penetration analysis aims to identify the maximum return you can expect from further investments in your existing markets. The resulting insights can help you understand the performance of your existing sites and determine whether you should increase investments or cut back entirely.
• Predictive market analysis identifies specific hotspots of existing customers and customer lookalikes to guide where you should put new sites and optimize acquisition-focused out-of-home and geo-targeted SEM campaigns.
• Predictive trade area analysis identifies the maximum distance customers are likely to travel to your existing retail sites. The resulting insights can help you optimize individually-targeted and geo-targeted campaigns focused on driving foot traffic to those sites.

Implementing machine learning

While several complex applications of AI are still years — or even decades — away from being fully developed, the democratization of machine learning is enabling nimble marketing teams to generate these predictive customer insights without having to spend millions on expensive consultants or hire large data science teams.

If you're considering adopting machine learning or looking for ways to expand your analytics team's bandwidth, our article, Is your marketing team AI-ready?, discusses important considerations to ensure successful implementation.

Over the last 45 years, Peacock Alley has established itself as a leader in high-end, luxury linens and bedding by placing their valued customers first, from product design to enjoyable, evolving shopping experiences.

Peacock Alley recently signed on with Faraday to leverage artificial intelligence and nationwide consumer data to continue to deepen their understanding of their current customers and intelligently target and acquire new customers.

Ryne Higgins, Head of eCommerce and Digital Marketing, spearheaded the efforts to incorporate AI into Peacock Alley's marketing strategy. We had a chance to speak with Ryne about Peacock Alley, their decision to implement an AI solution, and what their onboarding experience has been like so far.

We'd like to thank Ryne for sharing his thoughts and experience, and hope you enjoy the interview!

Can you provide a brief history on Peacock Alley?

Ryne:

"Our founder, Mary Ella Gabler founded Peacock Alley in 1973 (yes, we are 45 years old and working with an AI / machine learning software!) on the "Little Black Dress" theory to bedding and bath linens; own the best basics and then thoughtfully work everything else in.

About 9 years ago, she handed the reins over to her sons – Jason and Josh - and they are continuing to run the business today with her watchful eye still on product development and brand.

The company has been through a lot of iterations throughout the years but our core business channels are perhaps not that much different than you'd expect – we have a growing wholesale, retail, and eCommerce presence still today."

Who is a typical Peacock Alley customer? Is your customer base changing?

Ryne:

"The typical Peacock Alley customer is a difficult question and one of the reasons why we have paired with Faraday.

Across our channels, you may get a lot of answers. For example; our wholesale channel sells to a number of specialty stores, online dropship channels, and direct-to-designer. Our retail stores, while open to the public, mostly focus on the professional, accredited designer who is looking for the touch and feel experience in Dallas, Austin, Atlanta, or Nashville.

For my purview of the business (eCommerce), we are mostly focused on striking the cord with the do-it-yourself designers (think of what you see on Pinterest and beyond), whether they need coverlets and bedspreads, bath towels, or luxury fitted sheets.

I wouldn't say that our customer base is necessarily changing – we're still committed to the people that have made us successful over the past 45 years – however, as a brand, we are always interested in understanding what makes our customers tick and finding ways to attract new customers."

What does a typical Peacock Alley customer lifecycle look like? For example, are a lot of your customers repeat buyers? How do you communicate with past customers?

Ryne:

"Like a lot of 45 year old brands, our changes in the online space have been more revolution vs. evolution. In the past year; we've redesigned / replatformed our website, paired with companies like Faraday, and have really been trying to reshape our marketing mix between traditional and digital channels. For digital channels, we are seeing a high rate of new customers as we've built an experience that they are interested in interacting with.

We see very strong customer loyalty and to be frank with you, our product and brand has really stood on its own in bringing customers back historically. Our messaging and retention strategies have really been based more on the personal relationships we've built with our customers over the years.

As a brand with high-touch customer service and interaction, we are always looking for ways to supplement the old-fashioned "how are you doing" with digital communication that adds value to our customer's experience with the brand."

How has your marketing strategy evolved over the last 5 years? Where have you found success? Where have you struggled?

Ryne:

"Without getting into too many details, I will say that it is definitely in a place of evolution. Our business was built on the wholesale channel and sales tools, swatchfolios, etc have always been a staple of our marketing efforts.

That is still true today but we are also trying to find ways to improve those assets while also mixing in digital marketing (be it SEO, paid search, paid social, etc). As with most traditional media efforts, tracking can be difficult compared to the relative ease of digital. Faraday's toolset will allow us to continue to close that gap."

To what extent has data guided your marketing strategy throughout that period?

Ryne:

"Data and the ever-evolving digital landscape has been paramount in our evolution of our marketing strategy. When Mary Ella started the business, you could have never imagined directly tying a dollar spent to a dollar earned in marketing.

As these tools and technologies continue to evolve, for us it is about finding ways to marry the digital tools out there today with the traditional efforts that have really built and grown this business over the years."

Can you describe your current tech stack from your e-commerce system to customer data management? Has this changed significantly over the last few years?

Ryne:

"Sure. The fun thing about digital is it is pretty easy to find out what tools and technology people are using so it's pretty much public information.

Last year, we made a transition from Magento to Shopify, we signed on with a tool that allows us to visualize the true color of a product without having to shoot our products in a dozen different colors, and have signed on data and machine learning partners like Faraday.

We believe that to scale the marketing efforts of a luxury business through digital – we had to have a partner that could help us solve for the black box of channels like Facebook and Instagram.

It is pretty unbelievable that, with as great of a platform some of these channels are, they can only build look-a-like type prospecting audiences with 2.1M+ people in them, making it very difficult to understand why something is performing or not.

By leveraging a partner like Faraday, we have the ability to pull back the curtain and communicate with members of their account management, leadership, and theoretically their engineering team if ever needed.

For us to make significant adjustments in our marketing budgets, we need the ability to find the right people and send the right message at the right time. It is a fairly cliché statement but partners like Faraday should help us close that gap."

Prior to learning about Faraday, had you considered leveraging AI in any aspect of your business? If so, how? If not, why?

Ryne:

"I mean, sort of? I come from a background that is extremely digital in nature and I'm constantly trying to follow the trends that will help us build our brand. I will say – before talking to Faraday – I didn't think that AI was accessible to brands like ours quite yet (we have a small, scrappy team).

I was extremely impressed with what a relatively small team in Vermont can produce, and I liked their ability to "flex" their messaging to someone who considers themselves digital savvy but would have never considered scaling an in-house data science team in the short-term."

Why did you choose to leverage Faraday's AI solution?

Ryne:

"I've said a lot in the rest of the interview that I think answers this question but I would also say that the ability to take our use cases and personalize their product to what we needed to accomplish was key.

The Faraday team (shout out Robbie) is the type that listens, and I genuinely got the feeling that, in a world of technology partners who say a lot, they actually had the ability to walk the walk."

Can you describe your onboarding experience with Faraday?

Ryne:

"I've been through countless onboarding meetings and they are often met with a disconnect between sales and account management. It seemed like sales and account management was in sync. They had communicated our efforts, asked for refreshers as needed, and without the need for constant follow up have been meeting the quick deadlines that we needed them to.

As a business manager, I'm constantly met with "how" or "why" type questions and the team has been very responsive and thorough. It really sets the stage for our entire engagement."

We're excited to be working with you! Do you have any other comments or suggestions you'd like to add for companies looking to get started with AI?

Ryne:

"This might sound weird from a customer of the company, but don't just sign up for AI because you'd like to say you work with an AI firm. Take the time through the process and see if you can link Faraday's AI solution to your business outcomes.

Consider your ability to execute with the platform. We've been waiting for the solutions that we think Faraday can solve for and it seemed like a great fit for our business."

Thanks a bunch, Ryne!

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