Certainly you’ve heard the statement, “S/He is like a
squirrel hunting for nuts”. This is usually meant as a derogatory comment about
someone. However, I propose and have seen that a marketer who isn’t really
trained or knowledgeable about analytics and /or database marketing, may start
their search for a nugget of information that will improve their marketing ROI
in the same way a squirrel hunts for nuts.
Unfortunately a lot of companies, even large ones, do not
have the data collection or resources devoted to analysis of the available
marketing data that could help a marketer analyze data to easily find the nuggets
(and sometimes gems) that will enlighten them to alter their marketing strategy
and dramatically improve results.
What do you do if you are in this position? Think like a
squirrel! Look, hunt, ask everyone questions (especially the seasoned sales
people as well as the operations folks).
Here’s a short list of what basic questions to answer/define:
1.
Who is my customer?
a.
Define as many characteristics as you can: What
is the demographic information? What are the best customers and how often do
they buy? Why do they buy? What method do they use to buy? What is the return
rate of these customers? What anecdotal information (psychographic,
personality, etc.) can you get from the people closest to the customer? (This
is where the info from sales and ops can really help.) If you have support and
budget, get your best customer list appended with psychographic data. This will
most definitely provide you with invaluable insight into your best customer.
2.
Who are my other customers?
a.
Do a quadrant analysis on your customer list and
divide them into four groups: Best, Next Best, Third Best and Fourth Best. (I suggest that there is a fifth group and
that is people who routinely interact with your marketing tactics but don’t buy
from you. Then, test to see if you can convert these folks into customers or
make them evangelists – but that is your last step in this process.) Repeat the
process above for each quadrant.
b.
Compare your results and percentages, with each quadrant’s
characteristics, against your potential market (geographic, market size/share
of market, demographic indicators in your market, etc.) Determine how you are
doing in comparison to what is there for the taking. Define your saturation
level and look for the opportunities and develop a strategy to capture as much
as you can.
3.
What are your customers buying?
a.
Look at the quadrants separately. Are there any
significant trends of what is purchased and how it is purchased across the
board or do your quadrants respond differently? Some of my clients have found that they are spending a lot of their
time and money marketing to people that really just routinely buy the same
thing/s, at the same time and by doing this exercise, they realize that a lot
of the marketing could be redirected to increasing share of wallet or bumping
the 2nd quadrant up into the 1st and the best customer could
be communicated to with a loyalty strategy.
4.
What does this data tell you?
a.
Now that you have the data (even if it is raw)
look for the patterns and look for the opportunities. Look for how these groups
like to buy from you and look at how they have responded to your current
marketing. As an example, it might be fascinating for you to see that your
strategy is heavy on digital marketing but your customer tends to buy via
telephone orders. (*Hint: this may tell you it is the personal touch that your
customer likes and your customer may or may not be responding to your digital
efforts.)
What do you do next?
1.
Develop a strategy to gain customers where there
is room for growth. Develop it based upon how
your customer interacts with you not based on what you have always done.
2.
Test your strategy (A/B is standard) and define
your winner.
3.
Once you have your winner, develop a campaign
and implement it.
4.
Use this strategy for all of the quadrants where
you see potential. Change your strategy to loyalty where you have saturation.
Is this the end of marketing analytics or database
marketing? Absolutely not! This is a very
good starting point though. I have used this approach with many, many
clients with unbelievable results. Try it in your organization and with
success, perhaps you will be able to justify the investment of tools that will
help you to continuously perform such analysis and even develop a strategy to acquire
a full- blown database marketing strategic environment. I strongly believe that
once you realize what amazing results you attain by implementing a “smart”
approach to marketing strategy, you will never go back to a think tank or top
down marketing approach ever again.
Happy Marketing!
Mary
