You're Spending Too Much: Cast a Smaller Net for Bigger Returns With Personalized Marketing
Marketers have been spreading their nets much too wide. Data analytics plays a critical role in achieving personalized marketing. Here's what too-wide a marketing net looks like, and how to fine-tune it given the importance of an efficient approach to marketing to all businesses across the economy.
Failure to understand, utilize, review and update best practices around your personalized marketing model through data analytics can lead to issues ranging from excessive spending to a lack of interested potential customers. Companies have to be careful, deliberate and aware as they consistently fine tune their strategies for raising awareness of their brands and offerings in today's diverse, digitally driven market.
In essence, organizations need to move away from a large marketing net that is likely full of holes to a smaller one that is easier to control, mend and redeploy.
What Does Casting Too Wide of a Marketing Net Look Like?
One of the clearest and most direct ways companies can determine if their marketing spend is in or out of line with best practices is through comparisons with best-in-class organizations. The percentage of the overall budget tied to marketing can change greatly between certain industries, and even different elements of the retail world, but a review of the strategies used by leaders within your specific vertical can provide a strong, easily understood starting point.
It's also important to remember that marketing theories and processes regularly evolve and change, especially with so many digital methods for analysis, outreach and engagement now available. Some small, tech-savvy firms and niche e-commerce players outperform leaders in their industries in terms of return on investment and market penetration, despite smaller budgets. That happens thanks to an increased focus on using the most effective information, systems and avenues to connect with high-value customers.
A too-large marketing net can also stem from a failure to use market segmentation. A lack of specialization and personalization, especially for campaigns that target large groups of people or geographic regions, simply isn't acceptable when so many potential competitors regularly use and benefit from such tactics.
A data-driven approach to marketing is now possible for businesses large and small, but many companies avoid it due to perceived cost issues and only focus on that element when designing marketing efforts. A method that only concentrates on budgets is ultimately short sighted. It keeps costs lower in the short term; however, it also excludes the very positive developments that come with increased understanding of your true customer base and marketing to them effectively across many channels, which provides a particularly valuable revenue stream for a variety of organizations.
Enterprises must understand the value data provides and invest in market segmentation efforts that help define potential audiences and allow businesses to market to them effectively.
Casting a Smaller Net for Stronger Results
Personalization and developing a deep, regularly updated understanding of potential customers through effective use of data are critical for modern marketing success. Businesses need to have a strong grasp of what appeals to large swaths of their customer base, with similar information about smaller groups and individuals. This data-driven approach ultimately provides the information companies need to stage effective multichannel marketing campaigns that make the most of each platform used for outreach and target specific consumer sentiments and desires.
Perhaps most importantly, this strategy allows businesses to target especially high-value customers repeatedly in ways that remain relevant to the shopper through personalized appeals and outreach. Making sure marketing messaging stays relevant over time, especially in the context of engaging frequent shoppers and top spenders, is just as important as engaging new customers. Using data as the crux of such efforts gives companies valuable, accurate analysis that can inform marketing campaigns and make messaging delivered many years into a customer-business relationship just as relevant as the first piece of outreach.
Shifting to smaller, more targeted efforts isn't only about attention and communication on the individual level, either. Organizations with a brick-and-mortar retail footprint can go beyond marketing efforts that target their entire customer base to focus more keenly on smaller areas, including the catchments around individual stores. One discount general merchandise retailer shifted from a national advertising strategy to one tailored to each store's individual customer base. By identifying relevant demographics and the impact they have on purchasing at each location, the retailer can now focus more on areas with a higher proportion of potential frequent shoppers to derive the most value from their marketing spend.
Of course, simply having relevant and accurate data on hand isn't enough to craft a smaller net that is more effective at targeting specific customers. Businesses also need efficient processes for analysis and developing relevant understanding of those results across an organization. Companies need to have the tools and knowledge on hand to readily leverage data to define, segment and evaluate customers. They must also have the capacity to make these findings quickly and accurately. The rapidly changing nature of consumer preferences in the modern economy means too long of a delay when gathering and analyzing can cause significant problems in terms of relevance and the overall value of related marketing spend.
Ultimately, creating and defining your smaller, more effective net stems from a desire to maximize ROI and get the most value possible from every marketing dollar. That means an emphasis on ensuring campaigns reach their intended targets, drive sales and have clear messages and missions. By avoiding waste and minimizing redundancy in a marketing budget through the context provided by a data-driven approach, alongside the many advantages provided by the results of successful, personalized and targeted campaigns across many channels, business quickly realize benefits from this more streamlined strategy.
Starting to Make More Effective Marketing Changes
One of the greatest challenges of making a major business process change, such as a data-based strategy for marketing, is generating awareness and acceptance. Luckily, many companies already recognize the need to better understand customers in more granular detail, quantify their value and more effectively and appropriately target them. Companies that don't change their approach will only continue to fall behind both industry leaders and smaller players that recognize the value of data in a marketing context and use it to effectively reach out to their customers.