Whether it’s your keys, phone or wallet, we’ve all had moments where we can’t find something important that’s sitting right in front of us. Typically, someone else will spot the item immediately, leaving you perplexed by how you overlooked it in the first place. The same can be true of prospects or customers in your marketing database. If you’re not careful, it’s possible to lose sight of a campaign’s full audience segmentation and acquisition potential.
In working with so many different clients, I have been afforded a unique vantage point to see how clients target their potential customers. The most interesting part of watching this process is seeing how each client takes a unique approach to modeling, targeting and segmenting their prospect universe. With that perspective in mind, I have learned that targeting prospects and customers is more art than science (a finding which may run contrary to the point of view of many reading this blog).
Sometimes, Models Just Aren’t Enough
One of the most eye-opening lessons I learned during a conversation with one of our clients was when we were considering developing a look-alike model from their existing customer data. The question was raised, “How do we know these are really the type of customers we want to target?” As the discussion continued, we debated: “Would these segments be the best targets?” Would they be the most likely to respond to this channel? Is there a whole new segment our previous marketing efforts haven’t been able to reach?
It’s not that a look-alike model is a bad idea – most of the time, it can be a great place to begin looking for additional audience segmentation opportunities. But often, there’s so much science behind building models that the art of targeting can be lost. All data sources are not the same; all models are not the same. The channel, offer positioning and creative factors all heavily impact who responds.
Don’t Let Customers Get Lost in the Numbers
Now, you might be asking yourself, “How can viable prospects be overlooked?” Given the fact that a majority of client acquisition programs measure response in 10ths of percentages and measure lift in a fraction of that, I would say there is a very large percentage of potential customers that can be overlooked, and it can happen in multiple ways. Many of our clients mail profitably to 5th or 6th deciles in a model. Beyond this, the investment in adding a new customer is typically very high. However, the bottom deciles should not be ignored. Continued testing and analysis can often uncover unique audience segmentation opportunities that were not revealed by the established models.
Offer positioning, creative and format should be periodically tested in theses underperforming segments. Typically, we like to look at what’s working for a client today: Who are their data sources? What key attributes are driving their current model? How long have they been using that model?
We also like to look at testing history. There is a lot of value in the historical results of a program, but it is rare to find a client who leverages their past learnings. If all you learn from your testing is that a market cell didn’t work, you are doing it wrong. Discipline in test design is probably the biggest impact we have on our clients’ programs when we initially engage.
Three Tips to Stay On Top of Audience Segmentation
Audience segmentation as a concept can look different from the ways in which it’s implemented on the ground level. In addition to the basic strategies I mentioned above, we’ve identified a few specific best practices and tactics that help optimize audience segmentation, avoid missed opportunities and target more overlooked customers.
- Test new data sources at least every 24 months. Data can be outdated more quickly than you might think. If you have a 10-plus year relationship with your data provider and have not tested another potential source, you are probably leaving segments untapped.
- Don’t rely solely on in-house analytics. In-house analytics are a remarkable luxury and clients should feel lucky if they have that resource internally. However, relying solely on an in-house analytics team can blind you to what is happening elsewhere in the broader direct marketing universe. To get the best of both worlds, a marketing partner like IWCO Direct can work with your in-house team to develop a collaborative solution for your program.
- Test into your lower deciles at least twice a year. Be innovative with this group, despite the lower perceived stakes. You have nothing to lose and you just might find a great new segment to target.
Many audiences remain overlooked until marketers start using the right tools, tactics and mindset to find them. Proactive collaboration and self-awareness are key to audience segmentation, identification, targeting and acquisition. Get in touch with me to discuss how IWCO Direct’s experts can help reveal the customers you might be missing.
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