Countless case studies across multiple, industry verticals share one common finding: “Market Messaging” based upon customer insights, also known as Precision Marketing (data-driven customer insights), delivers increased ROI. Enhancing your data with demographics (age, marital status, education, interests and hobbies) help to grow deeper customer insights and assist in delivering relevant messaging that engage, convert, and builds brand attachment and loyalty.
Precision Marketing Framework – Here are the five steps to increased ROI as discussed in my book:
Step 1. Identify Your Problem (what are you tying to solve)
- Are you trying to re-engage loyal customers?
- Do you want to increase response rates?
- Do you want to target customers with a new service?
Step 2. Evaluate Your Data on Hand
Marketers should leverage their available data and house files. Now don’t try to boil the ocean here, customer addresses and basic purchase history will suffice. Further inspecting the data for quality or hygiene, and understanding what information is missing can provide a valuable baseline. Once you have a better understanding of your data, you may decide to send out for address correction/standardization and enhancement. We recommend enhancing the data with affordable insight such as marital status, education level, and presence of children, income, gender, and home ownership. This is typically available from $10 per 1,000 addresses.
This process can take up to two weeks depending on your data vendor or if you decided to use our software, P360, it will take about two minutes.
Once the data is returned, it is always a good exercise to perform some basic segmentation for product purchases such as subscriptions, donors, genre, and or single tickets buyers. Trends or commonalities should surface when comparing purchased products and specific demographics. Think birds of a feather stick together. How old are the large ticket buyers and what is their income? What product are they buying and in what channel? Basic knowledge of your customer base will assist in matching the right, relevant communication to the right customer, in the right channel.
Step 3. Create and Implement Your Targeted Campaign
Once you’ve identified your target customer segments based on your requirements such as location, age, gender or other characteristics, you will need to tailor the marketing messaging. Remember, customers will tune out if the content does not speak directly to their needs or aspirations, so it is imperative to deliver highly relevant content. For example, imagine a potential subscriber that has many similar characteristics of your current subscriber, just in a lower income bracket. Maybe the messaging could highlight your payment plans.
Here is a little example from Italian carmaker Fiat.
How Fiat Used Data to Improve Customer Retention by 6-7%
Italian carmaker Fiat Group wanted to improve customer retention. To do this, Fiat collected survey data from existing and prospective customers and bought third-party data on car purchasing behavior. For example, Fiat gathered data such as how often people replace their cars. Then, Fiat used software similar to ours to:
- predict customers’ responses to the brand;
- predict dealer actions;
- and create effective online marketing activities.
“The main focus is how to be effective in managing the data and the brands,” said Giovanni Lux, Customer Intelligence Manager for Fiat. The results? Using the data and modeling, Fiat made changes that improved customer retention by 6 or 7 percent. Overall, 54 percent of Fiat owners buy another Fiat when they replace their car.
Step 4. Test & Measure
It is critical to set up your metrics to measure the success of your campaign. Ask yourself, what percentage increase would be a success? Are you seeking a spike in product sales? Need feedback to a question? Increase sign-ups for a Newsletter?
Another suggestion is to track from the email, to a potential landing page, to your shopping cart. Tracking pixels, promo-codes, crazy egg, and many other app’s can help you achieve a 360 view of how your customer is responding to your message.
After the campaign’s been rolled out, measure the metrics established to determine what worked and what may need to be adjusted. Also, it is important to note what metrics did you wished you captured.
This insight can assist in the next campaign approach, design, and metrics. Did the customer’s convert as you thought? Did you see a trend in the conversion?
Step 5. Refine & Repeat
Finally, refine and repeat to generate increasingly positive results. Start with what you know and adjust or tweak as the campaign evolves. By revisiting and leveraging the exercises and knowledge gained in Steps 1- 4 to build a better “next” campaign. Now, go back to Step 1 and refine and repeat. Also this helps to optimize your marketing budget by delivering relevant content to the most interested clients. The bottom line is by evaluating and leveraging your data; you can increase the ROI by only sending out relevant communications. No more spray and pray.
In summary, the quality of the conversation you have with your patrons determines the depth and duration of the relationship; remember, “KNOW ME or NO ME”. As savvy marketers, we need to continually strive to deliver the right, relevant message, in the right channel to deliver results and maximize return on investment (ROI).