Direct Marketing, Analytics and Customer Targeting

Direct marketing campaigns are truly effective when you precisely target customers likely to buy from you. This is done by Profiling and Modeling prospects and clients.

Dumb mass mailings are replaced with “surgical” campaigns that market to specific customers with accuracy using technology that is now available. Today, it’s possible to collect an enormous amount of information about customers, but to use it effectively you use it in “profiling” and “modeling”.

Both of these techniques are ways of applying external data to possible clients. They can be used to prospect for business or to zero-in on existing customers for your mailing. The goal is to predict behavior based on what you know about your customers.

These two methods are not mutually exclusive, and marketers often use them together. The difference is that profiling data is overlaid against an existing client database, and has a long life span. It can be used for several mailings, and in contrast modeling is used to sharpen the focus of a specific mailing.

In profiling start with the premise that you don’t want to deal with a customer segment, but rather an individual customer. Break up your client segment into clients who share similar tastes and buying habits. Then use demographic and behavioral information to create a useful snapshot of the customer.

Begin to gather this information from your existing customer database noting such things as frequency of purchases, buying habits, responses to marketing offers, and repeat purchases. Then start with your perceived prospects using alternate sources of data from purchased sources. Use all this data to break your customers into clusters that share purchasing traits.

Obviously, profiling and modeling add to the cost of your mailing project. You may wonder why you shouldn’t just stick to the old method of “recency-frequency-monetary” (RFM) analysis. The reason is that for RFM to work effectively you need data on the client’s purchasing habits, and that’s the rub! It only works for your existing customer and is of no use in finding potential clients.

What makes profiling/modeling cost effective is found in three current trends.

1. Rising mailing costs.
2. Computers able to compute mountains of data rapidly.
3. Higher quality customer data available.

In the past, direct marketers could mail out 400,000 mailings to find a strong market of 40,000 (1 customer out of 10 mailings was average). The dramatic increase in the cost of paper and postage has made this practice prohibitively expensive.

Computers today are capable of doing millions of computations per second. This makes analyzing mountains of data possible and not unthinkable anymore.

Higher quality customer data is more available today, and there are more sources available for obtaining it than ever before.

The result is that you can afford to do a lot of number-crunching before you spend a penny on postage. You can also weed out the useless names and mail only to your most likely prospects.

There are 6 factors to consider when building customer profiles:

• Affinity profiling – analyzes current buying habits to better match customer to product. Knowing what kinds of product a particular customer is buying gives you the ability to build an “affinity matrix” showing what related products would stimulate more sales from him/her.
• Demographic and psychographic data is also used for profiling. Demographics tells you a client is a 29-year-old, unmarried, male who earns $45,000 and drives a 2-year old Lexus. Psychographic data suggests that single young men who buy status-symbol cars are excellent prospects for other highly visible status products. Combining the two types of data yields a customer profile to someone marketing, say, the latest cellular phone.
• Lifestyle Coding is used to enhance basic demographic information. Simply put – people in certain demographic categories will likely have similar hobbies and other interests.
• Mapping is another useful tool in building customer profiles. Census data, topographic information, geographic coordinates, and zip code+4 postal data can be fed into a computer yielding maps that can be color coded to certain characteristics of consumers in particular neighborhoods.
• Cluster Coding is a popular means of grouping people by lifestyle characteristics. Remember hearing the terms “Urban Up-and-Comers, Settled In, and White Picket Fence” used to describe market segments? These are known as “clusters”, each given a score according to affluence, social position, activities, and aspirations.
• Survey data – can be used to enhance demographic, lifestyle, and other data to build a profile. This is collected directly from your customers via application forms, surveys, and credit histories. This provides a more personal portrait of the customer than merely census or demographic data.

The Direct Marketer of today has become more of a “surgeon” than a “shotgun hunter”. It’s no longer cost-effective to shoot at 400,000 prospects to get 40,000 clients, and with computers it’s easier to slice-and-dice data today.

Pay Per Click Success ? The Golden Rules

Trial and error makes up a big part of how we learn in life ? but in business, there often is not much time to trial things, and depending on the size of an error you can find yourself limited in what you do before you even start. It is important, then, to not trust solely in the process of trial and error, and to give yourself as strong a position as possible before you make any life-changing decisions. Pay Per Click is a classic example of this. There is a lot you can know before you begin, and trial and error will help you only if it is used to refine rather than to set a strategy. Knowing the golden rules is essential.

For example, for Pay Per Click to really pay off for you, you need to know how and where to position your ads. An ad will naturally be more beneficial if it is placed on a page where the content makes it hard to ignore. An example of bad pay-per-click is when Internet Marketers place their ads on a page which has scarcely relevant, or poorly written content. People are not going to click on ads that bear no relevance to what they are reading, or that are sitting next to content that is so badly written it is hard to read.

Additionally, it is important to interpret the data that you find when researching your most valuable keywords  and categories. Certain rates may look like good value until such time as you place the ad on your site and see the statistics come in in real time. If you can guarantee a lot of clicks for your ad, then a high valuation is a goldmine ? but if surfers aren?t going to click in large numbers then the ad is just taking up space.

pay-per-click Advertising Tips and Information

How to Use pay-per-click

Making The Most Of Your PPC Budget

Many people using pay-per-click, especially those who are new to the idea, make the mistake of developing ?tunnel vision? when it comes to choosing their keywords. Often, those who find what they consider to be the ?perfect? keyword will become too heavily focussed on being on the list for that keyword and will ignore everything else. The mistake that too many of these people make is that they try to compete with advertisers who have a larger advertising budget than they do. Remember that your competitors may have room in their budget to really chase a certain keyword ? room that you may not have.

Unless you are a major global company, you will not have an unlimited advertising budget and, if you spend too much money chasing the ranking for a certain keyword, you will find your budget running out without the money coming in from clicks. This is a mistake you should avoid, especially when you may well pick up one or more almost equally lucrative keywords for smaller prices. Think about it this way: If you can get ranked on two or three keywords of a similar value (overall or even separately) for the same bidding price as the #1 keyword in your niche, you can bring in more clicks without the same competition level.

At the end of the day, there is something pleasant about being able to say you have the top ranking on the most valuable keyword. But a position like that is only ever temporary, and if you have to spend your whole budget to get there then you?ll lose out in the long run.

pay-per-click Advertising Tips and Information

How to Use pay-per-click

Thinking Outside The Box On Keyword Selection

Let us start this piece with an analogy. A man hears Beethoven?s Fifth Symphony on the radio as he sits in reception before a business meeting. Amazed by the tempestuous beauty of the piece, he decides that he will learn to play it and sell it as his own. It is not long before he is laughed out of town by people already familiar with the piece, and he realizes that what matters is not the ability to recognize something amazing, but the ability to be creative and to turn one?s talents to being individual and remarkable. Humbled, he goes away and tries to create something new ? it?s not as good as Beethoven?s Fifth, but it is his own and people appreciate it.

Now, selecting keywords for a pay-per-click campaign is not as exacting a task as creating classical music, but there is a similarity. You can put as much effort as you like into getting the most valuable keywords, but remember that the competition at the top is markedly more fierce than it is anywhere else. You can bid low on the most valuable keywords, but this will by necessity mean that you get fewer clicks and you will make less money. Being innovative in how you approach keyword selection means that you will attract more clicks for less competition.

It is therefore better to spread the net a little wider, think about keywords that are similar to the most valuable one without having the same high price on them. If your budget is smaller than those of your competitors, you need to make it go further.

pay-per-click Advertising Tips and Information

How to Use pay-per-click

Selling online

Once upon a time, setting up a business meant opening up a shop somewhere where you could be sure that customers would come to see you. You needed to order stock and keep the shop tidy, well-heated or ventilated, and you needed to always be there. All of this meant that starting to sell would be preceded by weeks, even months of extremely diligent work, and with no guarantee of success anyone looking to set up a business would often decide that, on balance, the risk was too big. Now those problems are things of the past, and the potential businessperson can get things up and running very quickly.

The thing about “bricks and mortar” businesses is that they relied a lot on location and the other factors mentioned above. By going electronic, your sales room can be a small study under your stairs and your customers can be anybody. There is plenty of technology available which allows you to process payments electronically from a customer’s credit card or online banking facility. But even if you are not in a position to do this, you can set up a PayPal account and do your selling on eBay. Scarcely any initial outlay for you, and potential for the money to come flowing in with scarcely any delay. And now you can do business in your pajamas at 1.30am. so many of the obstacles to someone hoping to make a way in the business world have been removed, and it is all thanks to the Internet.

Promotion Sites

Promoting your business is something that will generally be important if you want to bring in customers and make a success of it. There are numerous ways of doing this, some of which are expensive and others which, as a matter of relief to the person looking to get a business up and running quickly and on a budget, are free of charge. Free promotion of a business has its drawbacks compared to when paying for it – it is less direct and will not be as prominent. On the other hand however, there are clear upsides to free advertising. For one, well, it is free, and for another it is really quite simple.

Getting free advertising is something that need only take half an hour – and that is allowing for writing the advertising copy and ensuring that it looks good. There are sites devoted to free advertising – two of the most famous being Gumtree and Craigslist. Both of these sites simply require you to write a short description of your business, prices and some contact details so that interested parties can get details from you and arrange a deal.

These sites make their money by placing advertisements on the site from companies who will pay for exposure in a setting where people are looking to conduct business. You make your money by placing an attractive advertisement that will make potential customers want to know more. After that it is a matter of handling enquiries and arranging deals. All of that for zero outlay, too. Isn’t it amazing?

Promotion is Important

There have been people – many people – who have set up a website for their business and sat back expecting it to become lucrative immediately. While the Internet has made business a lot easier for the individual with the intellectual capital to make it happen, there is little scope for making money without investing time and effort. However, compared to setting up a High Street business, the Internet can deliver results for a relatively small outlay on your behalf. An advertising budget makes things easier – no-one would ever deny that – but it is certainly not essential. A bit of time and awareness will also bear results.

The Internet is crawling with forums and message boards. For just about any topic of conversation you can imagine, there will be at least a few message boards on the Internet, each slightly different in the way they look at the subject. Certainly, there will be a message board that discusses things that have a connection with your business. By registering on these forums, you can make your business known to a receptive audience. Many forums have anti-spam measures that prevent you from posting irrelevant content or linking without context, but there are no reasons why you cannot link to your business in the signature box that most allow beneath posts.

Depending on the nature of your business, the possibilities for promotion on the Internet are many and varied, and they make for a real opportunity to drive your business forward, usually at no extra cost to yourself.