THE FIRST RECOGNISED PAN-EUROPEAN MARKETING QUALIFICATION

Click here to read more…


THE BEST MARKETING EDUCATION WITH INTERNATIONALLY FAMOUS TEACHERS

Click here to read more…

7. Who is your customer?

Here's a couple of ways marketers often work to understand their customers. I bet you've come across them at seminars or in marketing magazines.

1. They segment them, using pretentious phrases, like "upwardly mobile" or creative language their research people have dreamt up so as to charge more - like dividing them up into different kinds of fruit or animals.

2. Sometimes they say "picture your customers - what they like or don't - then you can see them as human beings."

Well, in a minute I'll tell you a story one of my friends, Denny Hatch - among the smartest people I ever met - just told.

But first, let's play a little game.

1. Try to picture a group of prospects
2. Men aged 55-65 years
3. What do they look like?
4. What are their interests and hobbies?


Now follow this link and see who they are

Surprised? It's a way of pointing out that your customers are individuals, not types, which is why direct marketing is more relevant, by far, than mass advertising.

Peter Drucker said the aim of marketing is "To know and understand the customer so well that the product fits him and sells itself."

Only direct marketing can do that.

Today's point is: Know your customers as individuals - not types

I cannot think of any industry that is more in tune with its customers than catalogers. Using the RFM benchmark (Recency-Frequency-Monetary Value), they know the purchasing history of their customers and can rank them in quintiles or deciles.

A Seattle marketing guru once told a cataloger whose business was struggling, "You want to make money this quarter? Don't mail your bottom quintile."

In other words, the cataloger would spend more money on the mailing than he would take in from these poor-performing customers. Therefore, the money saved by not mailing would go directly to the bottom line.

Quite simply, a smart cataloger will mail the best customers a lot more often than the worst customers.

Ranking customers is only part of the catalogers' bag of marketing tricks:

* They have a record of every transaction, customer-by-customer, purchase-by-purchase. These data are aggregated so that the catalog marketer has an electronic dossier on every customer and-from the merchandise that has been shipped-can discern behavioral patterns: sports enthusiast, presence of children, loves high-tech gadgets, dresses casually, etc.

* Some catalogers go so far as to employ the technology of selective binding, tailoring each catalog to the buying history to specific customers and not wasting time on irrelevant offers.

* With the advent of co-operative databases, a cataloger's entire customer file can be modeled and matched against those of a thousand or more other catalogs in order to find new customers. He can then rent these "clones" of his existing customers and get far better results than blowing a buck on a book mailing to perfect strangers.

This is database marketing at is most elegant, efficient and profitable.

Next helpful idea...