Tag Archive for customer list

25 Mar 2010
List • Marketing Strategy • Saving Money

Expand Markets And Optimize Costs With Segmentation Strategy Part 3

This is a continuation of Target Marketing Magazine’s article about customer segmentation.

Modeling for Performance

Behavioral models can help you refine campaigns and follow-up marketing by allowing you to predict the likelihood of profit-driving behaviors such as payment, multiple orders and renewal. Model-based, predictive segmentations can be applied in the following ways:

  • Refine descriptive segments to increase campaign impact.
  • Manage campaign costs by eliminating lower-performing groups.
  • Expand market reach by targeting the top-performing groups.
  • Segment incoming orders for fulfillment and upsell by profiling for profitable behaviors.

As an example, imagine that your descriptive Segment Y is statistically more likely to respond to a given offer, but the payment rate for the group is only 50 percent. Let’s say your business requires a 60 percent payment rate on new orders to be profitable. A net payment model can help you identify the individuals (or households) who are more likely to respond and pay within the segment. By subsegmenting the group, you can see that targeting only the top 80 percent of the file is likely to achieve your 60 percent cutoff.

Building a solid model requires that you have results from previous campaigns to that segment and that the modeler has access to a large source of relevant data. The resulting model can dramatically expand the reach of your marketing campaigns and significantly increase ROI by helping you identify and target only the most profitable groups. The result? Your overall mail costs go down because you don’t promote to the entire file, but your net response stays more or less the same and payment goes up. You deliver higher ROI.

Models also can help you expand list populations by letting you mine segments that you haven’t been able to work with before. If you’ve been using on a 60-day selection, the model should let you expand to a 90- or 120-day selection, providing larger universes.

Finally, your models also can work for you in untargeted media or other channels. Models can be applied to responders—or in real time on your site—to help you make decisions about fulfillment, upsell targeting and future marketing contact.

| One comment | Tags: , ,
24 Mar 2010
List • Marketing Strategy

Expand Markets And Optimize Costs With Segmentation Strategy Part 2

This is a continuation of Target Marketing Magazine’s article about customer segmentation.

Third Party Information

The data you have on your customers, great as it is, just isn’t a complete picture. Understanding what, when, where and how consumers do business across a large group of marketers gives you insight you can’t get from your housefile. New sources of data can help you create broad-based, descriptive segments that provide opportunity for product development, channel selection and increased lifetime value. Understanding your customers through the prism of third-party data sources helps you see far deeper into your customers and gives you a more intensive understanding of their buying interests and behaviors. Consider some of the outside data attributes you can use:

  • RFM: Recency, frequency, monetary value.
  • Product Type: Continuity, one-shot, online subscriber, magazine, music, video, sweeps.
  • Affinity Type: History, health, gardening, sports, cooking, home, crafts, kids.
  • Acquisition Channel: Mail, telemarketing, e-mail, Web store, package insert.
  • Performance: Fast payer, slow payer, returner, write-off, repeat buyer, renewer.

Suppose you discover that many of your customers have a strong interest in something you don’t sell, like gardening products. Or if your customers have a strong affinity for video, you might consider offering a DVD as a premium. As you develop insight into which groups prefer specific offers via specific channels, you run the risk of making your segments so small that they are no longer truly predictive. Segments can only show you that, on average, a certain group is likely to perform in a certain way. Groups can be too small to be statistically predictive.

Make sure your segments are statistically significant, big enough to be actionable, and likely to remain stable and consistent while you execute your expanded marketing plans. Chances are you’ll begin to see a pickup in response as you reach out to new prospects in new ways.

In the next post we will look at what can be gained by modeling your lists.

| No comments | Tags: ,
23 Mar 2010
List • Marketing Strategy

Expand Markets And Optimize Costs With Segmentation Strategy Part 1

Target Marketing Magazine published an article about customer segmentation.

Why Rethink?

Everyone talks about reaching the right consumer with the right offer at the right time, but how do you deliver? Many marketers do a great job capturing, tracking and leveraging customer data. They know what segments work and which don’t. But today, every marketer’s “ideal customer segment” is a moving target—and growing increasingly fragmented as consumer attention flits from medium to medium. In this environment, it doesn’t make sense to expect your legacy segmentation strategy to be as reliable as it once was.

The first question to ask yourself is: Are your existing segmentations meeting your business objectives? Everyone seeks higher response, but is that enough? What about net payment rates? Or lifetime value?

Looking Into—and Beyond—Your Customer List (Housefile)

Building a segmentation strategy that gives you the flexibility to operate profitably in a multichannel world starts with reviewing your housefile. Simple segmentations are readily apparent: actives and expires; payers and nonpayers; product interests and demographics. These descriptions are great for doing things like selecting list sources and segments for mailings. Descriptive segments are useful for customizing creative. For instance, if you are fielding an offer for political biographies, you use your descriptive segmentation to change the copy and featured book for the Republicans versus the Democrats you’re targeting.

Successful descriptive segmentations move beyond intuitive target groups by using statistical techniques to uncover correlations and segments that may not be readily apparent. Overlaying additional data can significantly deepen and broaden the resulting segments.

Four rules for developing descriptive marketing segmentations.

  1. Mutual exclusivity. Groups of households or individuals should be homogenous and unique.
  2. Business rules. Only consider segmenting based on variables that are appropriate and actionable for the entire available universe.
  3. Actionable. A good segmentation provides basic guides for crafting custom offers and customer relationship management.
  4. Statistical data discovery methods. Develop segmentation rules that identify data-driven variations in your populations.

In the next post we will look at what can be gained by enriching your list with demographic or purchase of other products information.

| 2 comments | Tags:
09 Jan 2010
Marketing Strategy • Saving Money • Tough Times Marketing

Do More Marketing with Less Money

  • Stagger mailing schedules (200 piece mailings still qualify for presorted postage discounts)
  • Think about new ways to get more from your customer list
    • Would you tell a different story to someone based on where they live or the business is located?
    • Would you offer a deeper discount if they have not purchased from you in the last year?
    • Would updating your customer file with more details help you create more personalized messages?
  • Now is a great time to implement existing customer retention programs like newsletters, anniversary (their wedding or when they last purchased from you) letters or postcards, birthday cards, postcard reminders…
  • Get coop advertising support from your vendors
  • Cooperate with nearby businesses
  • Cooperate with similar but non competing businesses

We have more ideas please call us at 602-272-2100 and let us help you.

| 2 comments | Tags: , , , , , ,
  Recent Entries »