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CUSTOMER AND DATA ANALYSIS
Increased campaign profitability is one of
the major benefits you can expect by thoroughly analysing your data and then
applying your findings to targeting and offer creation. This insight will take
you beyond database marketing to 1-2-1 tailored communications driven by each
individual's interests and behaviour.
Informed customer investment
Knowing who are the more profitable
and responsive customers on which to focus your marketing spend will drive more sales
at lower cost and hence increase marketing return on investment - ROI. For
instance, rather than regularly selecting large blocks of customers that have
purchased a specific product or service, you can segment these blocks on a
number of factors including profitability and propensity to respond.
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Targeting
these segments enables you to apportion your marketing spend more appropriately
- more on the better prospects and less on those that may not add significant
value to your bottom line.
More focused
marketing
By segmenting your database it is
possible to target your offerings to better meet the needs and interests of your
customers and prospects. You can examine survey responses and purchase or
trading history, and group individuals sharing similar characteristics.
These
segments can then be marketed to by email, direct mail or telemarketing - using
your data to: a) determine which is the more appropriate channel, and b) to
analyse the effect of varying offer combinations and approaches. |
Use geographic mapping and drive-times to further
increase customer
understanding.
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Exploit cross sell
and up-sell opportunities
Take a group of individuals who have
purchased product X. Another who purchased product Y. And a third group that
purchased product Z. Wouldn't you like to know how the profiles of each group
compare with one another, and then how they compare to a fourth group of people
who have purchased all three products. Data analysis will enable you to do this
and then locate other individuals across your database that share the same
profiles. Armed with this knowledge you can target the prospects with a higher
propensity to buy additional products (cross-sell). And, if you include their
purchase values in your analysis, you will be able to use profiling to target
those prospects more likely to increase the value of the purchases they make
(up-sell).
New customer acquisition (recruitment)
Once you understand the
characteristics of your most profitable and loyal customers, it is far easier
for you to locate more of the same at the lowest possible cost. Consider that
recruiting a new customer typically costs between five and twenty times the cost
to retain one, and you will quickly see the sense in not only maintaining a
loyalty strategy but also in targeting your acquisition campaigns towards
prospects sharing similar profiles of your better customers.
Product development (bundles, offers, new products)
By really understanding your
customers and the combinations of products they buy, in which order they buy
them, how much they spend on their first, second and subsequent orders, when
they buy, which types of offer makes them respond, where they show interest,
etc., will enable you to put together more appropriate and probably more
profitable product offerings. You can also develop and test new products or
services that meet the needs of that particular group of customers and also
create more appeal amongst other segments.
To grasp these benefits and apply
your marketing investment more intelligently necessitates not only the
correctly derived analytical findings but also the right approach to turn them
into marketing action. Otherwise the only result you will have to show for your
analytical investment will be statistics and reports - no increased profits!
Click here to view the analysis steps
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