Part of the process of growing a business is increasing advertising efforts. You want to stay in front of your current customers, but you also want to win new customers. For many businesses, this means adding more names to their marketing list. However, simply increasing the quantity of records on your list isn’t always the best way to grow. If you’re targeting 100,000 people, but they aren’t the right people for your business or offer, you’re wasting marketing resources. It will also take you much longer to reach your goals. Before you add records to your list, incorporate data modeling into your advertising process. Data modeling can help you reduce marketing waste by identifying the best records, purchasing only the records needed, and optimizing your tiered marketing plan. All of this will help you make the most of your advertising budget and see a higher response rate.
Custom Data Selections
The process of data modeling starts with an analysis of your current customer database. Who are your best customers? Where do they come from? How much do they spend? What do we know about them? Data modeling can give you information on your customers’ demographics, lifestyle, and purchase behavior, so you know exactly who your best customers are.
Once you have an ideal customer profile to go off of, data modeling can identify others who look just like them on your prospect list. We often discovered that 90% of our clients’ customers are in the top 40% of the model. This means that 60% of their marketing list is 6x less likely to respond to their marketing. They can trim their marketing list by 60% and drastically reduce their marketing waste.
What would you do with your marketing budget if you could trim your list by 60%? You could increase your marketing efforts on the top 40%, or you could add in new prospects who look like your top 40%. Either way, you will see an increase in your response rates because you are targeting the people who are interested in what you have to offer.
Purchase Only Needed Records
Data modeling allows you to score and rank prospect records prior to purchasing them. This means you can see how the prospect records scored against your business’s customer data model. You can purchase the records most likely to respond to your offer and ignore those least likely to respond.
Optimize Your Marketing Resources
If you are planning to do a tiered marketing campaign, it’s really important to see each record’s score. This way, you can spend your top tier marketing efforts on your top scoring records. You no longer have to take a random selection from your marketing universe. You can make informed decisions about which records you want to invest in the most.
Many companies will send their top tier records direct mail and digital advertisements. These records are the most likely to respond, so you want to give them as many chances and opportunities to see your ad and respond to your offer.
You can take the next group of records and target them with your tier 2 plan. Most of our clients use tier 2 as a digital only group. These records still have a good score, but you might want to use more cost-effective advertising channels such as email, social ads, and display ads.
Regardless of how many tiers you have and what those tiers consist of, you will know exactly how each record scores and can decide where you want to make those tier breaks. You can even see which records didn’t score well enough for you to advertise to and remove them from the list.
Data modeling is a valuable tool that allows you to reduce your marketing waste. If you decide to trim your list, you can either invest more in ad spend on top scorers, or you can add in new high scoring records to increase your target audience. Either way, data modeling removes the guesswork and helps you make the best decisions for your business.
If you would like to know more about reducing marketing waste or targeting the best records, contact our team. We can analyze your data and help you identify the best records for your marketing list.