Turning Data Into Furniture Sales: Tip #3 - The #1 Way to Slash Your Marketing Spend
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Like most businesses, chances are you don’t have an unlimited marketing budget with a dedicated marketing analyst. Every time you run a marketing campaign resulting with a weak ROI, you lose precious financial resources that could have been used elsewhere. Cost justification for marketing spend is critical to any retail operation and the buck may stop with you.
So every promotional dollar counts, and that takes a more strategic approach to your marketing budget. Now is the time to re-focus your efforts on proven tactics that can provide the highest ROI potential to help ensure your store’s success.
The biggest mistake I have seen time and time again is wasting time, money, and energy marketing to customers unlikely to purchase anytime soon. The best way to reverse this trend is by identifying those customers who are most likely to make a purchase, and creating targeted campaigns that speak to their needs - right now.
Transforming Customer Data Into Actionable Campaigns
Savvy marketers use customer data to create models that provide insight as to what buying action – if any – they will most likely take next. The key word is “action” because modeling goes beyond a static description of a certain demographic such as “unmarried women over 30.” Models predict the most probable behavior over a period of time – who’s bought what in the past? And what action would they most likely be taking for your upcoming campaign?
Modeling – Slash Budgets and Boost ROI
- Identify which customers are most likely to purchase from you right now or in the very near future. Look at demographics and purchase history to narrow down your list. For instance, if you’re running a campaign to promote outdoor patio furniture, customers who have recently purchased outdoor patio furniture should be eliminated from your marketing campaign.
- Build a model that accurately predicts which customers are most likely to respond to a particular campaign. Create a comprehensive model that uses data over the lifetime of the customer relationship, combining buying history ‘action’ with more static demographic info like age, gender, income, education. By looking at past behavior and trends, you will be able to accurately build a model that represents your ideal customer for this campaign.
- Revisit your customer base in terms of the model you just built. Categorize customers based on whether or not they fit the model. If they don’t, it means they are unlikely to respond to your campaign, and should be removed from it and/or marketed to in a completely different way. This strategy is critical for drastically reducing your marketing spend.
While it may be tempting to flood all of your customers with every marketing campaign, you are left with a ‘lose-lose’ scenario of wasted resources and a low ROI. Develop a more effective approach by creating strategic campaigns targeting those customers proven they’re ready to take action!
How much could a 30-50% increase in response to direct mail, voice marketing and e-mail marketing campaigns yield for your furniture store or chain? Take the next step...Download
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This article was written by Bonnie Massa, President at Massa & Company.
Turning Data Into Furniture Sales
Articles in Turning Data Into Furniture Sales