Uncover Valuable Prospecting Clues Hidden in Your Customer File
Mike Peterman and Holly Paulus
Have you been using compiled lists successfully, but your response rates are still decreasing? Do you have a local customer file and want to mail to a large geographic area or roll out a national campaign?
Are you running out of new prospects using the set of demographic/psychographic elements that you've traditionally relied upon to find qualified prospects?
Have you already run through all of the managed lists that seem appropriate for your market?
If you've answered "yes" to any of these questions, it could be time to have a multiple-regression analysis performed on your existing customer file prior to choosing your prospecting data.
Many companies have a general notion of who their customers are, or know their customer "profile," but most have yet to go the extra step and have a predictive model, or multiple-regression analysis, performed on their housefiles. Regression analysis, a complex form of analysis that delivers highly refined results, is a time-tested marketing tool for selecting top-tier prospects who have the propensity to become buyers. (See sidebar, "How Multiple-Regression Analysis Works," on page 62.)
A statistically accurate predictive model of your customers could prove profitable for your business, increasing market penetration and lifting response. Here's how some companies have used it.
for Customer Acquisition
Prospect modeling may be a cost-effective approach to acquiring new customers. Whether you're looking for more customers in a particular geographic area or you have a local file and want to roll out a campaign to a larger area—even nationally—consider modeling your housefile. It may enable you to target the most desirable prospects, those who have the propensity to become valuable, long-term customers.
For example, a prospecting model helped an expanding home improvement company when it was ready to unveil a national campaign. During the last several years, the company, which was founded in Georgia, had acquired numerous other home improvement businesses and now owns about 50 branches nationwide. However, its existing database was made up almost entirely of customers in Georgia.
