King Data; Putting Data to Use in Direct Marketing Campaigns

Water Quality Products Magazine, July 2015

You may have heard the saying, “Garbage in, garbage out.” But have you ever taken the time to think about what it truly means?

How about this one: “You’ll get out of it what you put into it.” Or this: “The chain is only as strong as the weakest link.” I am sure at least one of these sayings is familiar to you. Now, how do they apply to planning a direct marketing campaign?

Direct marketing is a unique medium among the many strategy choices available for promoting your business. Combined with other strategies and tools, you will be able to see what you put into direct marketing and what you get back. You will be able to track dollars invested and return on investment (ROI)—and that is the good news.

Here is the not-so-good (but also not-so-bad) news: Direct marketing can be perceived as expensive. In fact, the U.S. Postal Service just approved another rate increase for postage. Additionally, paper stock prices and ink costs tend to rise periodically. But those factors do not make direct marketing a cost-prohibitive investment. There have been incredible advances in both technology and information that can help your direct marketing campaign go further using smaller, information-targeted campaigns.

The days of blanketing 10,000 homes with a generic offer are over. Some of you may have experience with the U.S. Postal Service’s Every Door Direct Mail program. For a low price, it allows you to send non-personalized, generic mail to a neighborhood where people may or may not want or be able to afford your product. Although the homes in the neighborhood might be large and beautiful, the people who live in them might be “house poor” or double mortgaged. You just purchased the most expensive direct marketing campaign possible—one that does not work and produces little to no ROI. Garbage in, garbage out.

A New Strategy

Suppose that you believed that neighborhood was in fact the right fit for your product or service. It is possible that half of the neighborhood is right for your company, and half is not. If you could select only that “right half,” why wouldn’t you? That is where data come into play.

Let’s take that right half and narrow it down further. What about income or equity? Are there children in the home? What are their ages? Are there people with interests in healthy living? Do they own pets? All of a sudden, that half is down to a quarter or an eighth, but now you are adding some of the same traits from the neighborhood next door.

The next question to ask yourself is whether your ideal customer is who you think he or she is. As business owners, we like to believe only the best and brightest want to do business with us. When any of my clients want to start direct marketing campaigns to find new business, I, of course, ask who their ideal customer is. Next, I strongly recommend that we do a “snapshot” of the current customer base to get an actual statistical read, broken down by demographic and lifestyle traits into identifiable and selectable groupings. What might surprise you is that often we discover that the actual customers are different from who the business owner thought they were.

Here is one of the most common examples: Household income is almost always perceived by the business owner to be better, or at least higher, than it is. A client of mine in an affluent area of New York state told me that his customers were mostly millionaires. In fact, millionaires made up only a small percentage of his customer base. His largest groupings were those with middle class incomes and modest homes. We also discovered that selectable and targeted lifestyle traits such as “the great outdoors” were part of his customer makeup. This makes sense: healthy living, healthy water. These are all trait and demographic selections you can choose when purchasing a list.

Putting Data to Use

The main idea of this article is not to scare you into doing nothing. It is to educate you on the benefits of investing in your data. With that same customer snapshot, we also can target Facebook marketing selects and even pay-per-click and Google keyword inputs. The amount of data that the average American routinely and willingly gives up on a daily basis is incredible. These are data that can get you to the heart of what makes people interested in a product or service. The U.S. is more segmented than ever, and most of this information can be selected and targeted. Deeds to our homes, credit data, warranty cards, grocery and retail points cards, online buying habits, Facebook posts and Tweets are just a few of the examples of how we tell the world what we do and what we want.

A few years ago, I had a college intern tell me that she and her generation were unique because they happily had no brand loyalty. She told me that while holding an Apple iPhone, wearing Hollister clothes and clutching a branded cup of Starbucks coffee. I pointed these “list selections” out to her. She smiled, not quite embarrassed, but definitely rethinking her statement. She is marketable and has been successfully marketed to.

Use data wisely. Invest in data to be used throughout multiple media. Seek someone who knows how to find it. If you do it yourself, you may be able to do it adequately, with a lot of time and a learning curve. Because it is not part of your day-to-day operation, you could do much better having someone with more resources and experience do it for you. If I were to buy water equipment from you and tell you I have never worked on anything like this, but I will install it myself, you would call that a bad idea. For the record, I do have a water softener and reverse osmosis system. I did not install them myself.

Lastly, data come in different packages. The more you drill down, the higher the investment. Note that I did not say price or cost. Your data are a commodity, not an office expense. You do not buy saws or wrenches, you buy cuts and tightened fasteners to install your products properly. Your data investment is no different. Good data will produce better, personalized marketing with names, product types (for service or upgrades), install dates, or anything else that lets you speak with your customers, rather than at your customers. Make sure you put quality in and you will get quality out.

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