5 Essential Marketing Tactics That You Might Be Forgetting
If your day is like mine, you’re over-saturated with information. From hundreds of emails in your inbox to Facebook posts, to linked-in connection requests to Instagram activity, we’re always trying to keep up on the latest news and trends. Management is screaming for the next big, new idea to impact your bottom line. And meanwhile, meeting target acquisition and retention goals gets harder every quarter. Maybe it’s time for that long exhale… Just 5 minutes of quiet, and a little back-to-basics approach to direct marketing. Here are five direct marketing basics that may have gotten lost in this year’s panic:
- UPSELL. It’s hard enough to make a sale in our hyper-competitive environment, so you can’t afford to settle for a minimum order. Incentivize upselling by offering a certain number of dollars off the next threshold. Provide volume discounts for doubling the number of units ordered. Or consider offering a discount on the next logical purchase to go along with what is in the cart. Remember, upselling has no incremental marketing cost!
- REACTIVATE. It’s always less expensive to reactivate a lapsed customer who you know has interest in and need for your product line than to find a new one from the masses of prospects. The trick to reactivation is often found in enhancing your inactive customer data with external intent and transactional data to identify who’s no longer reachable and who has reasonable propensity to purchase again. Combine this with your legacy information including number of units purchased, frequency, recency, etc. and you have an ideal environment for customized modeling. Note there is virtually no hard cut-off in terms of how long a customer has lapsed: you can find good targets when you leverage high quality external behavioral data.
- ADJUST CONTACT FREQUENCY BY CUSTOMER QUALITY. Too many of us test contact frequency across the entire customer database when the optimal frequency is always different for some groups of customers vs others. Here, too, external behavioral data is an excellent companion to legacy RFM and product category data to understand potential value as compared to your metric of valuation based on your own interactions with the customer. Savings from decreased touches to truly low-value customers can be reinvested in acquisition! (Great case study, here!)
- CHECK THE LEAKY BUCKET. Many factors contribute to determining a marketing budget, but all too often, acquisition is the first area to suffer budget cuts. Rephrasing the necessity of acquisition to offset attrition is a winning argument with top management; if you lose more customers than you gain (the leaky bucket), the ASSET VALUE of the company declines, the company’s ability to retain earnings in future years dwindles with fewer customers to re-order, and suddenly the company is in a downward spiral. Acquisition budgeting needs to be adjusted to maintain the size and quality of the customer base.
- ACQUIRE CUSTOMERS AT A COST COMMENSURATE WITH LIFETIME VALUE. While it’s possible to overspend acquiring a new customer if you can’t recover the acquisition cost in a reasonable timeframe, too many direct marketers forget that customers have downstream value. If you limit your acquisition cost to break even after the first purchase, you are missing an opportunity to grow your company through acquiring customers at a modest cost, knowing you can make that cost back, plus more, in the future. The trick is to establish a solid 24 vs 36-month life-time value of a typical new customer acquired and then adjust your acquisition investment (and what promotional discounts you can offer to get those new customers to jump at the deal!) to be appropriate to your cash-flow and profit-reporting needs.
With these solid direct marketing fundamentals covered, your retention and reactivation efforts will be tuned for maximum ROI while retaining a robust customer base. And then your time will be freed up to search for the next whiz-bang, new idea!
It’s still early in the year – contact us for a tune-up on your acquisition and retention programs; even a little change can make a big difference.
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