January 2, 2020 | 6 min read

Modern Approach to Householding for Segmenting

Brands need an accurate view of customers and then how they intersect with group-based identities, purchases and more.

Graphic depicting identity resolution: connecting lines forming between white orbs

Decades ago, businesses had one primary marketing channel: direct mail. Thick catalogs, like Sears’ mail-order opus, were heavy with illustrations and marketing copy. This made them expensive to print and pricey to deliver.

Enter householding. Businesses like Sears both wanted to ensure that they sent their catalogs to the right people at the right addresses, but also that they sent only one catalog per household. This helped them reduce costs while increasing overall purchases.

Now fast forward to modern times. Businesses still send catalogs and need to understand who lives at which household to optimize direct mail ROI. Many still think of a household as a primary source of truth for customer identity. What’s different, however, is that brands today also rely on a slew of additional channels – e-commerce, email, and paid media, to name a few – to reach people and sell products.

All of these online and offline channels are used by individuals and by groups in complex and nuanced ways. Roommates cohabitate but don’t shop as a family. Family members share devices like iPads and laptops. Spouses use a shared brand credit card or loyalty program but diverge in product types and purchase patterns.

Brands need to understand all of these relationships in order to design and streamline their campaigns.

This means householding can no longer serve as a proxy for individual identity, nor can individual identities serve as a proxy for understanding households. Brands need an accurate view of customers that helps them first understand individuals across all channels and systems, and then how they intersect with group-based identities, purchases, channels, and interactions.

What is a Household?

The term “household” can mean a lot of different things. Most marketers simply think one family, one mailing address. While these types of physical households are critical, there are many other high value marketing scenarios to consider as well, all of which are increasingly important to your business.

Digital Households

Digital households are made up of a group of individuals who share a single device, browser, network, or a combination of digital identifiers. For example, a teenage son and his parents all use the same family iPad. They all click and browse on your site, but the father is the one who consistently makes purchases and is the one who should be prioritized for your paid media spend based on that device ID. By better understanding groups like this, a variety of digital marketing optimization use cases are possible.

Custom Households

A custom household is a grouping of individuals whose channels, purchases, or behaviors are connected in a way that’s unique to your business. For example, if you’re an automotive brand or sell expensive products infrequently, you might see patterns where certain individuals buy products for others. For example, a mother purchases a car for her college-aged daughter. The daughter drives and services the car, paying for oil changes and minor repairs, but when it’s time for an upgrade, the mother will make the next automobile purchase on her behalf. Given this context, both the mother and the daughter should be targeted, possibly with distinct messages, but offers should be triggered based on the daughter’s behaviors (servicing the car), not the mother’s. This requires a custom view of this pair of customers based on their unique buying and interaction patterns.

Physical Households

Last but not least, and certainly the most common, is the physical household. A physical household is a group of people who share a physical address and possibly other attributes like a last name.

How Amperity Householding Works

To find all types of physical, digital, and custom households, the first step is to accurately resolve individual identities and build customer profiles. This not only provides the foundation for a more accurate view of households, but it gives you the flexibility to light up a variety of use cases across multiple channels.

Most brands have fragments of customer information living separately in e-commerce, clickstream, loyalty, point-of-sale, email, and other databases. Amperity provides advanced, AI-powered data management to bring this data together and find the hidden connection across records. The result is an accurate, comprehensive, and up-to-date 360 view of your customers.

Once individual customer views are built, Amperity uses specialized algorithms to layer on household-based identifiers. For physical households we look at shared addresses and last names and account for common issues like bad addresses, apartment buildings with multiple units, business addresses, or invalid addresses.

We also provide options for NCOA (National Change of Address) cleansing, a service provided by the USPS to keep address data up-to-date when customers move, and CASS (Coding Accuracy Support System), a form of address standardization that helps clean addresses up to ensure deliverability for direct mail.

For digital households we use a different algorithm tuned to the digital signatures commonly captured by websites and mobile apps. This algorithm finds individuals who share devices and networks when interacting with your brand, unlocking digital marketing optimization.

Lastly, for the unique ways that people purchase together, for one another, or interact as a group through any channel with your brand, we provide full flexibility to build any type of custom household.

Households are More Than Identifiers

Identifying unique households is only the first step to building better campaigns. Once household-based identifiers are established, Amperity then provides unified household views.

These views are organized at the household level, and have their own household-level attributes. Attributes include household lifetime value, last household purchase, primary household purchaser, and any other important quality unique to that household that you may want to analyze or segment against.

For example, you could build a segment of high value households where no family member has made a purchase in the last six months. You can then automate activation of that segment in any downstream system, including paid media, direct mail, email, and other channels, for an always-on campaign.

You can also analyze group-based behaviors over time to discover trends in how families and groups shop differently as they experience life events. As you learn more about households, you can continue to shape and sharpen how you use data to improve campaigns and deliver better customer experiences.

Householding isn’t new. But by using a more holistic and flexible approach, you can not only improve the accuracy and ROI of direct mail campaigns, but you can unlock a host of new use cases and optimization for your brand.