Lists: More Customers, Please!
The idea behind targeted marketing is to make your efforts more effective—to deliver more return for every dollar spent—by targeting people more likely to become your customers.
For most marketers, the best place to start is with your current customers, who like your products and services and buy them repeatedly. So when looking for new customers, it only makes sense to target prospects who share key characteristics with your current customers.
Major brands have long relied on data and analytics to pinpoint those characteristics. Recent improvements have made these tools simpler, faster and less expensive—making data-driven targeting an option for virtually any advertiser.
But I Know My Customers?
Most marketers know who their best customers are—or at least they think they do. But acting on assumed knowledge, rather than applying analytics, is a mistake for two reasons:
1. You may have an outdated picture of your customers. Your core customers change over time, reflecting changes in the population, in consumer behavior, in lifestyle preferences or in purchasing behavior. Even subtle changes in your offerings or pricing can shift the appeal of your products or services.
For example, a recent client, a mail-order garden supplier, envisioned its core customers as older, rural residents with big yards. Analyzing the data showed its customer base had shifted: While the majority were still rural customers, a significant number were now urban or close-in suburban residents, more likely to have patio gardens or window boxes. That change not only affected the lists the client bought, but caused them to reconsider everything from creative approach to the plants and products offered.
2. Even if you're generally right about your customers, you may be missing some important details. For example, you may know your core customers are women ages 25 to 55 with incomes above $50,000. But a detailed analysis might show that you perform significantly better with a subset of that group, such as women ages 35 to 55 with incomes above $75,000. Knowing that, you could focus more profitably on the smaller, more narrowly defined group.