Do you use research to best position your brand or products? Is your company taking advantage of continuously evolving targeting tools, measurement and tracking mechanisms and newly formed marketing channels? If you do all of this, your marketing approach is probably average.
In an effort to make marketing and media buying more manageable, even sophisticated companies use averages: one target, one offer, one message. Focusing on the “average” isn’t necessarily bad –but it should only be a starting point for your marketing efforts – not an end goal.
In my 20+ years of experience looking at all aspects of Fortune 500 clients marketing plans and their customer data – only a handful of companies are leveraging the proven techniques of database marketing to improve all forms of their advertising. These companies are willing to see what they’re doing that’s working and what needs improvement. Quantitative analysis of a customer data makes marketing more effective in every channel, not just on the web, the perfect medium for a multi-targeted approach.
When you look at the detailed profile of your entire customer base, you’ll find nuances that should transcend direct and even digital marketing to impact every aspect and channel of customer interaction. What’s “typical” about 35-64 year olds with a $50K+ income? Less than you think. Within that single, vast group are actually several customer bands. These smaller groups are comprised of like minded individuals who are motivated by the same things, have similar media habits, attitudes, spend levels, purchase histories and expectations from a brand or product.
Focusing on multiple, data driven targets—instead of the average audience–is no longer a direct marketing or web only play – the typical bailiwicks of database marketing. It’s actually a way to bring together all forms of advertising to deliver the most efficient and effective messages – wherever the customers are. Let’s look at my hypothetical target from above. We might find that a subset – 55-64 year olds with an $80K+ represents 50% of a company’s sales and 10% of their customer base. A disproportionate spend level, and potentially a higher concentration of offline media, based on the target’s age (and media buyers recommendations) should probably be allocated to them. Social marketing might not be tremendously effective for this group, but advertising on some key web sites that don’t resonate as well with their younger counterparts could have a greater reach and cut through the clutter for the desired target. Adding research into the mix, we may find that this group is not motivated as much by price as they are by the great features of this product. Now we know how to change the media buys, the message and potentially the offer for this target from the averages–and sales shifts from this group will yield better results. The more customizable the marketing channel, the better the shift will be.
We recently worked with a telecommunications company who had launched a new campaign touting their lower priced cell plan. Sales had gone up 6% and they were elated. Everything seemed to be working. But the CMO was willing to get a more detailed picture. He brought us into the mix and discovered that while sales were up overall, they had risen dramatically in 3 of the target groups and gone down in another 2. That means that they were both doing a really great job and losing sales at the same time. When we analyzed the revenue results, we found that they had begun winning over many of their less valuable, and more likely to churn prospects and were attracting fewer of their historically high value targets. Their “winning” strategy was actually going to lose them money in the longer term. Armed with this new information, they reengineered their strategy, customized their media buys and offers based on their various target groups. The result – overall sales rose by an additional 0.5% the following month. This didn’t look like a tremendous win until we examined the updated revenue results. The profitability of the newest batch of customers was 27% better than the prior month.
So if you’re willing to shift the paradigm and see what’s working for your company and what’s not, ask yourself the following questions:
- Do you have a disproportionate ratio of customers to spend level (the 80/20 rule)?
- Might different customers and prospects either buy or not buy your product or service for different reasons?
- Do you believe that your youngest customer or lowest income group perceives your brand or product the same way as your oldest or highest income one?
- Do they have the same media consumption habits?
- Do different markets have different purchase patterns?
If the answer to any of these questions is yes – then you need to stop being average.
Bill Keller is the President of DataTech Concepts, a data driven marketing strategy firm specializing in all forms of marketing analytics. He can be reached at (212) 794-4219. firstname.lastname@example.org http://www.datatechconcepts.com