Every day 294 billion emails, 534 million Facebook updates, 400 million tweets and 2 million blog posts are generated worldwide. Print advertising surrounds you, and TV and radio commercials blare intermittently. When you market your business, you’ve got to get through all this noise by using the right medium and sending the right message.
My solution is what I call “precision marketing.” It helps you identify your best targets and then create tailored marketing messages that appeal to them specifically. You’ll spend your marketing dollars wisely while generating better results.
Where to Start
The first step is often the hardest, and you need to set manageable objectives that are clear and specific. Do you need to work on keeping your customers more loyal? Do you need to get your current customers to try new products? Do you want to “reactivate” customers who went dormant? Do you need new customers?
Figure out what you need to do by comparing your business to industry metrics. You can find these through Internet research, industry analysts (Forrester Research, for example), industry or trade associations (for the insurance industry, for example, the Professional Insurance Marketing Association has statistics); your chamber of commerce might be helpful for more locally focused information. Things worth looking at include your customer retention statistics and/or your revenue growth rate vs. industry benchmarks and growth rates.
Many of us focus solely on finding new customers, but there may be lower-hanging fruit. The widely accepted rule of thumb is that new customers cost about seven times more than retaining and expanding your sales to existing customers. And current customers can often be transformed into customer advocates who will attract new customers for you. Customer loyalty is a powerful asset.
For example, Perricone MD, a skincare products company, employed a successful email marketing strategy that focused on customers subscribed to Perricone MD emails but not actively buying. The goal was to find the high-potential dormant customers and figure out their preferences and interests by offering inexpensive samples and discounts each week. From there, Perricone MD determined the most tempting products for such customers and offered promotions on those products—leading to a 33 percent purchase rate from customers that other companies might have dismissed as “dead.”
Strategy or Bust: Focus, Focus, Focus
Once you’ve taken your first small step, set a laser focus on strategy. Key questions: Which customer groups should I target based on my goals? What do they want? What content/messages/offers will engage them?
State Bicycle Co., a medium-sized Arizona business, used a highly strategic Facebook campaign to connect with prospects and customers, learn their preferences, and generate purchases. The company posted about new products and events to increase awareness—measurable in clicks, likes and comments. State Bicycle also tailored coupons for its Facebook fans based on the preferences revealed by the likes and comments.
On Fridays, the company ramped up excitement by posting sneak peeks of new products and by using fan reaction to determine which products and offers would be best-received. The Facebook page directed fans to the website to learn more about items of interest—increasing the chance to convert fans into purchasers. State Bicycle cut through the marketing noise and gave its fans relevant information. And in addition to earning a legion of Facebook fans, the company turned many of them into paying customers: 12 percent of State Bicycle’s website sales traffic comes from its Facebook page.
Choosing Your Channel
You know about Facebook, Twitter, email, direct mail, TV/radio and print ads. With the range of choices available, which medium or marketing channel is right for you? Your customers select the channel in which they want to receive your messages. Knowing how your customers like to converse with you is key.
To start, make sure your messages and offers can resonate across many channels. Then you can consider factors such as customer demographics, your products, your messages’ timing and your budget. If you don’t know whether your customers prefer text messages to emails, then start with tests to see what generates the best conversation, engagement and response.
Royal Canin Canada, a pet-food maker, wisely gathered important demographics from customers in its PetFirst! email program. The company advertised the program in pet stores and on its packaging to build a relationship with current customers by inviting them to join and to enter specific information about their pets, such as age and breed. Royal Canin got off on the right paw by acting as an adviser rather than just another seller clogging inboxes. The company customized emails with the names of the owners and their pets as well as with content specific to the pet—a great way to hold the attention of smitten pet owners. For example, owners with puppies on the cusp of being full-grown would receive “Lifestage Guides.” Diet guidelines and recommendations were also made based on breed.
The emails generated an 80 percent click-through rate—a testament to how much customers appreciate and act on customized information, that all-important “relevance” you keep hearing about.
Skinny Budget Workarounds
So you’re thinking, Where will I find the money for this new marketing approach? Well, a big budget isn’t necessary to get big results. Remember that a common (and expensive) mistake is marketing to all customers, even those who aren’t likely to respond. If you plan well and tailor your messaging, you will spend less and reap a greater reward.
Let’s take a look at Rapid Racking Ltd., a U.K. company that sells shelving solutions by catalog. A few years back, Rapid Racking blasted out its expensive-to-produce 160-page catalog to any potential shelving buyer, and the cost of finding new customers this way was too high.
So Rapid Racking bought lists of prospective buyers. The company figured out which prospects on those lists were the most promising by comparing their profiles to those of current customers. Then, instead of mailing that big, generic catalog to an entire list of untargeted prospects, Rapid Racking began mailing smaller, more targeted and less expensive mini-catalogs to specific prospects.
The result? Pieces mailed by Rapid Racking were reduced by 25 percent, but revenue grew 8 percent. The cost per acquired customer has decreased 47 percent. This is how a skinny budget can deliver more bang for every buck.
Lists are a smart tactic, and here’s how to use them: Start by determining your target audience in terms of industry, size, function, location, etc. Next you’ll need to decide between renting or buying a list from, for example, InfoUSA, Dun & Bradstreet, Harte-Hanks or Experian. (For a valuable tutorial about which lists are best and whether to buy or rent a list, watch a terrific online video at SUCCESS.com/lists.) Once you’ve pared your list(s) to your best prospects, market to them using snail mail or electronic messaging.
Measuring Your Marketing
Business owners don’t measure results nearly enough, and even when they do measure, they may not examine the right things. Here’s a specific example to demonstrate the value of the marketing measurements.
Harold’s Chicken Shack—a favorite haunt of President Obama—measured its marketing results to test, learn and get smarter. The company’s goal was boosting sales between lunch and dinner, and text-message marketing was selected as the medium for the campaign because most people look at a text message the instant they receive one. In-store signage (banners, counter fliers, table tents and window posters, for example) as well as print ads and door fliers encouraged customers to opt in for cellphone texts announcing special deals.
Customers who signed up got an immediate thank-you text to save 10 percent during the slow 1-to-5 p.m. period (if you brought a friend, 20 percent off for each of you). The company then sent weekly messages with varying promotions. Each promotional message had a distinct keyword that simplified the tracking of responses.
By tracking which codes drove redemptions, Harold’s Chicken Shack could select the best text promotions both in terms of message delivery times and the time limits on the offer. (In case you’re wondering, messages delivered before noon and redeemable over a span of a few days turned out best.)
Results: 10,000 opt-ins during the first seven months, with the promotions delivering 53 percent redemption of the introductory coupon, 37 percent redemption rate of subsequent promotions, and an overall 11 percent hike in sales among participating outlets.
The Bottom Line
Marketing drives your business. So try a few narrowly focused tactics using readily available insights to keep your efforts simple and inexpensive. Then test, measure and learn along the way. Keep doing what works, but add refinements and new elements, measuring every change so you know what’s smart to keep and to discard. You’ll develop a marketing program that really counts.