It’s one thing to segment customers by behavior — most merchants do. It’s another to sort them by origin. But that may be just as important for a multichannel enterprise.
For one thing, the source sheds light on how the person likes to shop — you can plan your contact strategy based on that. And it can help you when targeting, as some firms have discovered.
Take Learning Resources. The educational marketer sells to consumers, teachers and resellers. And it has many entry points, including trade shows, call centers, the home office and the Web.
Let’s say a person visits the Learning Resources booth at a show and signs up to receive catalogs. The firm codes that just like any other entry. “We know that prospect came from ABC trade show, and that coding will always remain, even if the prospect becomes a buyer,” says Mike Peters, Learning Resources’ catalog manager for direct markets.
Why bother? Because it’s useful during acquisition. Did people who signed up give good feedback on the event? Then the firm would target prospects in that state who share the same characteristics.
The company has been doing this for 25 years, Peters says. “It’s something that has helped us stay organized, too. If you’re not mailing the right materials to the right people, you’re not going to get the response.”
Not that it’s hassle-free. A teacher may come in through a trade show or online. But the purpose order would probably come from the school.
That’s easy to solve — the firm simply does a matchback to determine if the person was a past buyer. But that was not a problem when each channel had its own database.
It’s useful in another way, however. A trade show that pulls in good prospects should be revisited the following year. And the resulting data can help the firm determine which magazines are going to be at that show and whether it should advertise in them.
Segmenting by source is hardly a new science. It was widely done in the days before the Web, according to Geoff Batrouney, executive vice president of Estee Marketing Group. “When renting a list, we’d always ask for the suppression of television-sourced names from Time Life music, for example, because those buyers are less valuable than direct mail-sourced buyers,” Batrouney says. “Why is that so? We don’t know why.”
Perhaps it was because they had responded to a promotional offer, and were less targeted than the direct mail buyers — certainly, they tended to fall off more quickly.
But times have changed. These days, more than 50% of all orders start online — in December, it’s 75%. And consumers have different ways of landing on a site — through paid search, natural search and customer reviews.
All that should be coded — and used, Batrouney adds. For one thing, it can help you save postage on mailings the person doesn’t want. “I believe we should be channel-sensitive 10 months of the year,” he says. “If you found me and ordered via the Web, then I won’t be sending you a catalog until November. But come the holiday season, we should be prepared for all the rules to go out the window.”
But there are a couple of things to keep in mind. First, this works only if you’re consistent. Code that original contact point regardless of the channel. And then be sure that you track performance over time.
Is it hard to master? Hardly. And it can quickly pay off. “It’s not an exact science, but a learning thing for us,” Peters said. “If it gets more people to learn about our brand, then it’s worth the experiment.”