Dear Dr. pROfIt
By Kevin Hillstrom
About Kevin
Kevin Hilstrom is president of MineThatData, a consultancy that helps CEOs understand the complex relationship between advertising, customers, products, brands and channels. His clients include billion dollar retailers, international direct marketers, publishers, catalog brands and online pure-plays.
Prior to founding MineThatData, Kevin spent nearly 20 years in multichannel retailing at some of the most well-known brands in the U.S., including Nordstrom, where he was the vice president of database marketing, Eddie Bauer and Lands’ End. Kevin is also author of numerous books, including his most recent, “Online Marketing Simulations,” available at Amazon.com.
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Kevin Hillstrom's Dear Dr. pROfIt: 3 Ways to Improve Offline Targeting
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Offline, targeting is more difficult. We’ve been hearing about how we can unlock the magic of customer targeting for more than two decades. And yet, at least in direct mail, there's surprisingly little sophistication.
The need to target in the offline world is becoming greater by the moment. I'm increasingly being asked to identify pockets of customers who have a certain set of characteristics that make them desirable for targeted catalog mailings, for instance.
When considering offline targeting strategies, please keep the following three points in mind.
1. Prior buyers tend to be future buyers. In other words, customers who purchased toner cartridges in the past are often most likely to buy toner cartridges in the future. This is kind of a no-brainer, but it does make a significant difference when evaluating the profit and loss of targeting strategies.
2. Identify customers who are likely to “crossover” and buy from other merchandise divisions. If a men’s shoe customer is willing to buy men’s outerwear, then you have a customer that could receive a men’s outerwear targeted offer. Conversely, it's wise to identify customers who are unlikely to crossover and buy from another merchandise division. It's this audience where you save a ton of advertising expenses and, as a result, become more profitable.
3. Recency matters. Customers who did something in the past few months are more likely to repeat their behaviors than customers who did something 39 months ago. With every month that passes, customers become less and less likely to exhibit repeatable behavior. And with most targeting activities, repeatable behavior is essential. Repeatable behavior is how marketers generate profit.
The future of offline direct marketing is all about targeting — making sure that the right audience receives merchandise that's tailored to current and future customer needs. By following the three simple ideas mentioned here, you're much closer to a profitable customer targeting future.
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