By Matt Boot, chief analyst, KDB
Knowing your customers is one of the first rules any good marketer learns. But during a recession, it is all the more important for companies to know which consumers or business buyers best match the profiles of their most loyal and profitable customers – or simply of those that are willing to spend, given the current economic climate.
When times are good, consumers may be more willing to take a punt and marketers have a certain amount of leeway in their approaches. However, consumers are now more watchful of their spending and speculative campaigns are likely to have a much lower yield.
So how can you ensure a successful marketing campaign during a recession?
1. Target your customers
Marketing budgets have been cut just as consumers are becoming increasingly cautious in the face of economic turmoil. Marketers are thus under increasing pressure to make their campaigns more targeted in order to increase yield on smaller volumes of marketing and CRM communications.
The difference between a good campaign and a bad one can be determined by the people it targets. If incorrect or obsolete data is causing the material to be sent to consumers in the wrong market segments or firms to aim at consumers with profiles that are unlikely to produce profitable relationships, the campaign is a failure.
2. Use your customer data
Using customer data to inform marketing strategies is vital in the current economic environment. The fact is that customer data is a tool that is easily at the disposal of most businesses and, when used smartly, it helps them to make sure they are focusing on both existing and potential customers that will help keep up their margins and cash flow in the face of the recession.
The last thing marketers should be doing is wasting their budgets on less profitable customers or those who won’t stick around long enough to make the marketing investment that went into gaining their business worthwhile.
3. Use existing customer data to target prospects
Firms should be using customer data to get the most out of existing customers so that they can up-sell and cross-sell additional products or services. This understanding then needs to be applied to prospects.
Segmentation and modelling techniques can be used to create detailed profiles from the existing customer base of exactly who the right customers are, and establish what they buy, how they buy, how much they spend, and their preferred channel of communication
This can provide a comprehensive picture of the key customers and should then be used to approach look-alikes – i.e. the potential customers who are most likely to be interested in, and respond to, an offering.
By taking this customer insight and applying it to prospecting activities retailers are able to contact prospects through their preferred channels, at the right moment, and with offers that interest them. By doing so, they increase the likelihood of gaining long-term customers.
4. Know your customers
Being recognised as a valued customer has an overwhelming influence on the likelihood of a customer revisiting – the better you know your customers, the more likely you are to know what they will want to buy. Detailed customer insight allows marketers to tailor their marketing in an informed way – and to target more precisely.
5. Promote a responsible image
This is increasingly important as public irritation at the nuisance level of unwanted marketing materials means making sure communications are relevant, well-timed and delivered through the right channel, is vital.
Companies that want to promote a responsible image and foster customer loyalty will be reluctant to cause tension with customers by contacting them in a way that does not suit them. And marketing material that is viewed as irrelevant is not only a waste of money – it also leads the consumer to consider the company as being out of touch.
6. An on-going process
Customer insight needs to be an on-going process rather than an isolated incident, so that businesses can change with their customers. Otherwise, they will find themselves approaching today’s customers with last year’s data and parameters.
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