To get the most bang from your advertising buck, and find new customers who will stick with you, you need to send out very targeted mailings. You don’t want to send your mailings haphazardly to people in general. That would be a waste of money. You want to invest your money and efforts into your very best prospects.
The Key to Finding Perfect Customers
Your best bet for finding great prospects is to find people who are just like the people who are already proven to be consistent buyers – your existing customers.
But how much do you really know about your existing customers? It’s important for you to know all about them because if these are your best buyers, then all you have to do is find other people who are just like them, and chances are they could turn out to be buyers as well.
Once you have a complete description of your existing customers you can:
- Find new lists to mail to that have similar characteristics.
- Tailor your advertising materials to those customers. For example, if your best customer is 60 years old, you can refer to cultural events that appeal to people that age, and make sure the type face on the sales piece is large enough to be read by aging eyes.
You can use a process known as “modeling” to get the information you need so that you can identify your best prospects and prepare the most effective message.
What Is Modeling?
There are a number of data companies that have plenty of information on large numbers of individuals. Just to give you an idea of how much information these companies have access to, Epsilon is North America’s largest survey response database covering over 35 million households, and 65 million individuals. It holds information on 1,000 data points, including attitudinal and behavioral measures.
Where on earth do they get all this information on us? The fact is, we provide it ourselves. All this information is gathered from a large number of consumer and business data cooperatives. What does that mean? It means a lot of the data came from places like warranty cards and surveys that people fill out without even thinking about it.
A warranty card for an appliance is a great example. Some of the information is necessary, like where you bought the items, date of purchase, your address and phone number, etc. But most of these cards ask questions about additional information that has nothing to do with your washer and dryer. They might ask about a person’s age, income, hobbies, and interests. All that information you put on your warranty card and mail back is then sold or shared with companies like Epsilon and Equifax.
Okay, so there you are with your own house file of 20,000 names. You don’t know anything about these people except that they bought your product. You want to know more about them so you can target your marketing efforts to other people who have their same characteristics.
So you decide to run some modeling on the information you do have. You send your 20,000 names to one of these huge data companies. They run your 20,000 names against their file of maybe 30 million names. Maybe they find 5,000 matches. Epsilon can tell you their average and range of ages and income. They can tell you how large their families are, what kind of home they live in, what hobbies they have, and maybe even their health problems and where they make charitable donations.
You can use this information to tell your list broker exactly what characteristics you’re looking for in the mailing lists you will be buying. This will increase the effectiveness of your future marketing efforts.
You can also start using your knowledge of your best buyers, their likes and dislikes, their interests, their demographics, to write and design sales pieces that will be more appealing and motivating.
Using Customer Modeling to Refine Your Marketing Efforts
If you have 20,000 people in your database, many of them may have some characteristics in common, but they are likely not a homogeneous group. Your buyers can be segmented into specific categories. And your modeling process can help you segment your list for more targeted campaigns to different groups of buyers.
For example, you might want to segment your buyers by age. Let’s say that modeling reveals the following breakdown of ages in your existing customers:
20-30 years of age 10%
30-40 years of age 25%
40-50 years of age 30%
50-60 years of age 25%
60 and older 10%
This tells you that 55% of your buyers are between 40 and 60 years of age. But a very respectable 35% of your buyers are under 40. These are two large groups of buyers that probably won’t respond the same way to the same message. It might be worth it to you to buy lists in both age ranges, and prepare two different types of sales pieces to each group. You would have to test to see what works best.
But let’s say your breakdown looks more like this:
20-30 years of age 5%
30-40 years of age 5%
40-50 years of age 20%
50-60 years of age 40%
60 and older 30%
For this breakdown of buyers, you know that targeting people under 40 may not be worth the effort unless you have a highly targeted piece explaining why young people should be interested in the product. And you might experiment with sending that piece to people under 50, which would bring in another 20% of your buyers. But your main focus should be on elderly buyers, and your sales piece should reflect that.
Other ways you might segment your buyers might be by income level, educational background, other interests . . . really, there’s no end to what you can do to identify your groups and then refine your message to match your prospects. Modeling will help you do that to the best effect.
Using Modeling to Make the Most of Carrier Routes
For some businesses, the critical factor for customer loyalty is location. If you have a restaurant, or a dry cleaning business, your best prospects are the people who live within, say, a 30-mile radius of your store. One of the best ways to reach your prospects is to send a sales piece to everyone who lives in a certain area. The Post Office designates all the names in a specific area as a Carrier Route. These are all the people that a mail carrier will deliver mail to. Bulk mail postage rates for names sorted into Carrier Routes are among the cheapest, so this is a great way to promote your business.
But a 30-mile radius of your store is a pretty big area and may cover hundreds of Carrier Routes. You want to identify the ones that hold the best prospects. And as we know, that means identifying the Carrier Routes occupied by your existing customers. So in this case, your modeling procedure will involve mapping. Your data company will take the addresses of your customers, map them on a grid of the area, and identify which Carrier Routes have the greatest concentration of your customers. Don’t be surprised if you find that these routes are located near streets that come directly to your store, making it easy for people to reach you. Modeling enables you to take advantage of these natural pockets of good prospects to whom you can market yourself with better chance of success.
Find out the most you can about your model customers, and they will lead you to many others just like them.