Hitmetrix - User behavior analytics & recording

Segment Channels, Audience for Success

The foundation of successful marketing efforts in the new economy will depend on how seamlessly businesses can integrate their online and offline communication with customers.

Build a unique selling proposition around your customers. The starting point for any marketing strategy should define what is different about the business in a real and discernible way. Many companies have spent millions of dollars on so-called branding exercises with the output of a new logo (British Airways comes to mind) or have spent aimlessly on mass media (dot-coms during the Super Bowl).

But to differentiate each business, how does each convey its customer-centric value proposition? Once that question is answered, the integrated strategy can define the unique selling proposition even further by differentiating the communication channels. This realignment around customers and a unique selling proposition requires discipline and often a culture change for many organizations. But what can be gained through this effort is significant.

Segment the audience, segment the channel, segment the communication. Beginning to sound like a direct marketing campaign, right? Successful integrated marketing strategies start with identifying profitable customer segments. Once identified, businesses must communicate via the customer’s preferred channel (e-mail, print, phone, fax) to be effective. Customer service levels also need to reflect a customer’s relationship with the business.

For example, a live agent’s time costs a business more than having a customer use a frequently asked questions page, but for a good customer, incurring the additional expense is justified by the expected return. Statistical models can easily be built to determine which customers justify the added investment.

Or, in a second example, a good brick-and-mortar customer comes onto the Web site, is immediately identified with a personal greeting and is provided with a relevant merchandise offer, along with a “help me” button throughout the visit. The customer will probably buy something. However, an unknown prospect visiting the site and browsing may not receive the “help me” icon until he has put several items into the shopping cart (to ensure a complete transaction).

Other segmentation can be based on variables that will affect the business: types of pets owned for a pet store business; ethnicity for a Hispanic portal; household income for a bank; disease symptoms for a drug manufacturer; and so on.

Most companies do not segment effectively because they try to be all things to all people at significant levels of unprofitability. Even if they do segment, they don’t separate the cells for print and e-mail, and other media. Instead, what often happens is that e-mail campaigns are run at two- and four-week intervals, while simultaneous mailing campaigns are sent to the same customer’s home with conflicting, rather than complementary, offers. Alongside this noise are random television and radio spots that should reinforce the direct marketing program but are often executed by an ad agency more concerned with brand building than with customer relationship management.

This strategy is a losing value proposition that defeats business objectives and annoys, rather than embraces, customers.

Tactics and the media mix. So how does a business get it right? Using an effective mix of e-mail, mail, online and mass advertising for prospecting and managing customer relationships is critical. Instead of laser precision, we receive a blast of promotional programs everywhere that are meaningless to most anyone.

Companies need to slow down, determine communities of customers (and prospects) who are or will be profitable, and build a marketing plan to tap this wealth by truly servicing their needs.

An integrated prospecting strategy may include local television and radio spots; magazines and newspapers; direct response broadcast (with a toll-free number); banner ads; search engine optimization (in which someone visiting a search engine such as Altavista.com types in a keyword relevant to your business, and your site is ranked in the top 10); and maybe a viral e-mail marketing campaign.

The adage rings true: test, test, test and refine. Intelligent use of gathered data on behalf of your customers is simply the most important competitive differentiator for any business. Data must be captured, analyzed and acted upon to improve the marketing strategy continually. Whether it is e-mail click-through data alone or the same data combined with transaction history, robust analysis will help determine what the future contact strategy should be.

Let’s say you are a furniture e-tailer, and a Web site visitor registers and puts a few big-ticket items in her cart, saves it and leaves it. Since she registered, you have both her e-mail and household address, so you send her an HTML e-mail a couple of weeks later as a nonintrusive reminder, with images of the products from her cart. Yet, the e-mail bounces back as nondeliverable. The next logical step in an integrated program would be to send a print-on-demand piece that mirrors the e-mail but also has a compelling offer. As this strategy continues to play out, you further refine what that offer should be (maybe start with a $100 coupon or a 20 percent off incentive, testing to find the balance between motivating visitors to purchase and maintaining optimum profitability).

Integrating your marketing strategy will take time. This iterative process involves developing a new way of marketing your business. The benefits are worth the wait: profitable, happy customers who enjoy interacting with your company.

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