We all know that it’s less expensive to keep a customer than to find a new one. But to grow a business, prospecting is arguably as important as retention.
To help you find new customers profitably, Mark Traverso, vice president of list management, new business, and e-commerce at Pompano Beach, FL-based Lighthouse List Co., and Michele Volpe, vice president for Novato, CA-based list firm Media Source Solutions, offer some suggestions:
1) Model with all your channels in mind. Predictive modeling and regression analysis are standbys that mailers have used for years. But how do you capture and measure former customers and potential customers if you don’t include all the multichannel ways your best customer uses to shop? You can’t. E-mail modeling is one of the newest modeling tools mailers can use to help determine the best way to find their online shoppers. Continuing to use the standard models will deliver the standard results. Incorporating the new data elements will strengthen the value of the model and provide a better algorithm for your best customer.
2) Take advantage of online marketing. Many mailers are reluctant to combine their Internet marketing efforts with their offline tactics. This may be the aftermath of the e-mail marketing hype of several years ago, when too much was asked and promised of the medium. E-mail is not its most effective as a stand-alone marketing program. It works best when used as a component in a multichannel marketing effort. When used in tandem with direct mail, retail, or telemarketing, e-mail has been proven to boost results.
E-mail is especially good for building brand awareness, driving traffic to special events, and for customer recognition programs (for instance, “It’s your birthday– take 20% off your next purchase!”).
3) Don’t overlook lifestyle and other compiled data. Compiled databases today contain a rich source of well-maintained consumer lifestyle data. These files are not your mother’s databases. Consumer lifestyle changes such as a new address, new baby, and new phone are captured and segmented as frequently as every week.
4) Prospect for retail as well as direct sales. A whopping 24% of consumers will visit a store within 90 days of receiving a direct mail promotion. How can a cataloger benefit from this knowledge? By integrating a multichannel approach to your prospecting efforts to ensure that your message has the best chance of reaching potential customers on one or more levels.
Before mapping out your prospecting strategy, consider what you’ve learned during reactivation efforts. Do your recently reactivated customers now prefer the Internet to the call center? Were they at a new address and purchasing with a newly issued credit card? The insight you have gained can also be used to identify new prospecting segments when testing outside lists.