Algorithm-driven Wellness Marketing Strategies

(The HealthWave.Center’s Chronicle)

Customer is the most important point of a marketing plan’s implementation. Recent research discovered that traditional demographics, including education, social status, and even age are not significant metrics today. Instead, new behavioural and attitudinal patterns have to be taken into consideration as a customer archetype. We should understand how these patterns manifest in a concrete business framework, what key patterns have the greatest impact, and how we can influence them. Besides, it is important to assess costs, time, and other resources that are necessary to implement the marketing plan. Predicting bad outcomes now, we can avoid them in the future without loss.

How does Wellness Customer Look?

Nowadays, According to the European Commission report (for both the EU and the USA), more and more people are experimenting with alternative approaches to their health and wellbeing. The new trends of DIY culture, together with a strong sense of independence and self-reliance shape the new image of wellness customer. It is a person who takes a more active role in own wellbeing, who is empowered with digital technology, who actively communicates with like-minded people within social networks. Such trends create a new health wave, dramatically changing the global wellness market landscape.

Contemporary wellness customer not only asks brands for transparency and personalised attention, but also sticks to a new philosophy of brands’ social responsibilities, environmental issues, and own digitally-augmented lifestyle. Researchers already discovered that emotions rather than rational

thinking drive consumer behaviour. And wellness customers’ patterns are especially emotional, reflecting aspirational images, admired values, and beliefs. Customers have favourite wellness rituals in which brands are ingrained in their daily routine. But customers’ daily routine and behavioural patterns are mostly out of brands’ control, making ‘classical’ marketing based on demographics of little use.

An Algorithm for Marketing Planning

How it is possible to recognise and segment wellness customers when traditional forms of segmentation do not work there. Behavioural patterns, attitudes, and life values of different customer groups are in use today, forming a new archetypical approach. The term ‘archetype’ was coined by the German psychoanalyst Carl Jung, and is borrowed by modern marketers to create a well-defined consumer image. This problem has been already discussed in the Tech Invest magazine. To take a step from the archetype idea towards business practice, it is necessary to use the analytic technique for identifying consumer archetypes, and estimate the results of its employment.

The Harvard Business Review proposes to use predictive analytics for optimizing marketing campaigns. And technology allows using data and algorithms to identify the likelihood of marketing strategies’ implementation in the stage of its planning. To bring this idea to life, we developed a three-step scoring algorithm:

• Step 1 – Determining the key behavioural and attitudinal patterns for some preliminarily selected customer archetypes. Deciding what factors influence each pattern. Calculating how different patterns contribute to outcomes.
• Step 2 – Clarifying the main features of the key behavioural and attitudinal patterns for all selected customer archetypes.
• Step 3 – Developing marketing strategies that are most suitable for each customer archetype. Assessing costs, time, and other resources accessibility for each customer archetype. Estimating in what measure three groups of resources allows us to reach planned marketing goals.

The process is iterative: we can repeat step 3 adjusting strategies until we get an acceptable outcome. In this way, let’s test the algorithm using real figures.

The HealthWave.Center Chronicle: HAIRGARDEN (practical application of the algorithm)

HAIRGARDEN is a pilot project and business application on the HealthWave.Center WellTech platform developed by Innovation Wave. The application focuses on customers that are interested in hair care concerns, offering:

• Motivator that forms an appropriate customers’ mindset, encouraging them to start the wellness journey. This module uses affirmation and meditation techniques aimed at changing customers’ behaviour for their good.

• Daily Routine Planner that helps customers to plan all wellness procedures with personally formed preferred timing and effort levels.

• Progress Tracker that provides feedback on performance. An algorithm monitors performance and stores all monitored information. When customers upload data about their performance the Tracer algorithm indicates how close a person to the initial plan.

Three archetypes were preliminary created to represent the HAIRGARDEN’s archetypes:

1. Enthusiastic Actives
With high awareness regarding wellness, she plays the role of an early adopter and opinion leader, seeking innovative solutions and being receptive to products and services with distinct functional benefits. She knows her wellness concerns, is experienced how to treat damaged hair, is ready to change her daily routine for better health, considers a good state of hair as an integral part of wellbeing, is ready to invest in her health, and prefers alternative medicine to the contemporary one.

2. Minimalistic Followers
She is often a mum with family, focuses on a DIY mode of hair care, likes setting up daily wellness routine, conscious about product features and ingredients, prefers wellness goods that fit all her family members. Her purchase decisions are driven convenience and affordability as well as existing ailments or medical conditions. She is unwilling to make significant lifestyle changes for a healthy life.

3. Image Seekers
She is often a businesswoman with limited spare time for a daily wellness routine, can educate herself, but has minimal practical experience. She is influenced by celebrities and network influencers, social media campaigns and peers, expecting quick results and instant gratification to long-term beneficial solutions. Due to activity in social networks, her key motivators for wellness activities are personal appearance and image.

Ten key Behaviour Pattern (BP) that contribute to each customer archetype, include:

1. Personality Traits
2. Wellness lifestyle
3. Purchase motives
4. Price perception
5. Attitude towards online shopping services
6. Technology for wellness perception
7. Natural/Organic products preferences
8. Wellness routine
9. Products packaging preferences
10. Self-image

For measuring the contribution we use a scoring technique via ten factors that influence each of BP:

• If such influence is positive it receives a score of 1.
• If such influence is negative/neutral it receives a score of 0.

The list of ten influencing on patterns factors includes:

1. It is common within the customer archetype.
2. It can be integrated with other patterns.
3. It can be influenced easily.
4. It has an emotional drive.
5. It has a functional sense.
6. It has endowed progress effect.
7. It can be anchored.
8. It is visualised easily.
9. It can be shared.
10. It has a sense of a social reward.

To calculate how different patterns contribute to marketing outcomes for all customer archetypes we use a formula of weighted scoring:

A result of estimating how ten factors influence each of ten patterns (a matrix 10 x 10) is shown in Table 1.

Table 1. Weighed Behavioural Patterns

Table 2. The significations of each BP for customer archetypes are different

To rate marketing strategies for each of three customer archetypes we use a formula:

Table 3. In what range does customer archetype fall into

Then we can estimate in what measure three groups of resources allow us to reach planned marketing goals. The result of estimating is shown in Table 4 (rating from zero to ten for each customer archetype).

Table 4. Measuring how three groups of resources allow reaching marketing goals

Results of the above calculations for each of three customer archetypes are brought together in Table 5.1. (Enthusiastic Actives), 5.2. (Minimalistic Followers), and 5.3. (Image Seekers).

Table 5.1 Calculations for Enthusiastic Actives archetype

Table 5.3 Calculations for Image Seekers archetype

Findings:

The algorithm processes with behavioural and attitudinal patterns of three wellness customer archetypes. It was amazing to discover how this simple algorithm allows seeing not obvious dependencies to predict the implementation of the HAIRGARDEN marketing plan. Estimating initial marketing strategies for Image Seeker archetype we have discovered that they should not be targeted (out of the range) while estimating resources for Enthusiastic Actives archetype shows that outcomes are unlikely to reach. Fortunately, the subsequent corrections of strategies and repeated calculations using the algorithm allow obtaining acceptable results:

• Rating 2.049 for Image Seekers (within a diapason 1.5 – 2.3 ‘Might Be Targeted’).
• Rating 6 (costs), 9 (time), and 8 (other resources) for Enthusiastic Actives (from ‘Possible’ to ‘Easy to reach’).

To discuss the algorithm use or the HAIRGARDEN application contact Innovation Wave.