Let’s Talk First Party Data
We talk about First Party Data a lot. What it is?
First party data is data that your company has collected directly from your audience which is made up of customers, site visitors, and social media followers. “First party” refers to the party that collected the data firsthand.
First Party Data is collected from the people you have the most to learn from: your current customers! That makes the data as reliable as possible.
How can you collect first party data?
You can attain first party data from your CRM, surveys and subscription-based emails or products. This is also where Google and Social Media Analytics are important.
Google Analytics has a massive list of capabilities and ways to track website data. Using tracking code, Analytics collects information about the way the website was used.
- Time of visit
- Pages viewed
- The time spent on each page
- What browser and OS are being used
- Referring site details
- Network location and IP address.
This information can help you see where (and how) traffic is following to and through your website. Google Analytics also has a lot of other tools such as URL Builder that make it easier to track customer data.
Social media analytics are helpful for flushing out the demographics are your most engaged customers. What can you learn about customer from social media? Here’s are some things you can learn:
- What platforms your customers prefer to engage on
- What content do your customers enjoy most
- What type of campaign or advertising works for them?
- Do they have any other hobbies or interests?
- More specific customer demographics, such as age or gender
It’s also super important to connect as many touch points to your customers as possible. The more ways you have to interact with the customer the more likely they are to become a repeat loyal customer. Think about the companies you follow on social media. Have you bought from them? More than once? Are you loyal to them? Do you agree with their mission and goals? Following companies on social media feels like a personal one-on-one connection and generates loyalty.
Organization is Key
The next step of having/using first party data is organization. Having important information about your customers and leads doesn’t do much good if you can’t find it or if it’s connected properly. No matter what size your business is, having a CRM is key. The days of using a Rolodex are long gone. Now there a lot more channels of data to connect to a contact.
For example, in our CRM we keep track of more than just name, company, phone, and email. Our CRM keeps track of what social media we are connected on and any times the contact has engaged with us. We have it set up so that the CRM assigns a number value to actions a contact or lead can take, such as opening emails, clicking links, liking a post, and any orders.
How does all that information benefit us?
There are many ways! For one, we can use the information we have to target or retarget contacts, leads, and prospects. We can try different channels and types of touches until we find which one they respond best to. Having more than one channel connected to each contact makes multichannel campaigns possible.
The other advantage to First Party Data is that you can collect data and analytics about your customers from the channels you are using to constantly to learn more about your demographics and your customer’s buying habits. The more channels you use the easier it will be to learn about your customer. Then the more customers you have the more information you can learn about your potential target audience. You can use a Look-A-Like to build a list of potentials you can target based on information on your current customers.
What ways do use First Party Data?
Here’s how First Party Data might the key to the future cookie-less world.
How Can You Increase Sales Volume?
We all love talking about the big sale accomplishments, the brag worthy sales. But the day-to-day is often defined, not by the amount of a sale, but by the quantity of them. How can you increase sales volume?
Technically, sales volume is the percent of units sold within a period of time. Companies use sales volume to see what products are selling successfully.
What are some ways to increase sales volume?
- Know your product. Do you know all the things that make your product superior to your competition? Why should a customer choose your product? What’s your elevator pitch?
- Focus on the benefits? All buyers have only one question: Does this solve my problem? They want to know that what they are receiving will benefit them and be worth the exchange of time and money.
- Sell to the right prospects. If your sales volume seems to be decreasing it may be a good time to reevaluate your target audience. It is also a good idea to get an updated a list.
- Understand your customer’s problems. What problems are your target customers trying to solve?
- Work with your marketing team. Your marketing team will be able to create content and structures to support your sales volume.
- Remember, time is money. Increasing your sales velocity or the amount of time it takes a prospect to move through your pipeline will positively impact your sales volume.
What ways have you found successful in increasing your sales volume?
Can You Trust Your Data?
No matter how good the machine you build it is, it’s not going to run well if your fuel is poor quality. Data is the fuel the runs all marketing. The problem is, data error is commonplace. Data providers are all trying to give their clients the best data possible but often the data they are providing doesn’t match up.
Harvard Business Review did a study in May 2020 to test the accuracy of consumer data. They found that the accuracy of Demographic data was particularly disappointing. Most were only around 50% accurate. For example, the average accuracy of gender segments classifying males was only 42.5%.
“Half the money I spend on– department-store magnate John Wanamaker (1838-1922)
advertising is wasted; the trouble is,
I don’t know which half.”
What do those errors mean for your campaign? A study by Forrester Consulting on behalf of Marketing Evolution in fall 2019 found that “marketers estimate that 21 cents of every media dollar spent by their organization in the last year was wasted due to poor data quality, which translates to a $1.2 million and $16.5 million average annual loss for mid-size and enterprise organizations, respectively.”
How do a few errors on a record level equal so much wasted money? Record level data is the spring from which everything else flows. For a small example, if a few records in your CRM have mistakes in them, what is going to happen when you use them to send an email campaign? The opens and clicks from your email campaign may inform your audience for your social campaign. In every step and trigger along your campaign, the small errors effect more and more information downstream.
The company Truth Set is looking to minimize error across all data. How? By providing a third – party consumer report type service for data providers and marketers. Truth Set goes through every record available and assigns a percentage rating to all the attributes, such as ‘percentage that this record is actually male.’ That way, marketers won’t waste money on inaccurate data and data providers can keep their data clean.
The hope is that as more time goes on, third party quality checks and ratings will become commonplace and shrink margin for error unilaterally.
What can you do make sure your data is accurate? There are a few easy identifiers you can check for. How old is the data? How transparent is the provider with where the data came from? How consistent and relevant is it?
What changes do you think would make it easier for marketers to trust their data?
New Indicators Are Coming!
We are excited to announce a large update is coming to our exclusive National Auto Data File on NationalListCounts.com. We want to help you target prospects better than ever.
With the coming updates you will see changes to our audience indicators (aka: ‘In-Market’ selects.) These audience indicators will to help you find people who have indicated that they are interested in purchasing a new vehicle. We are also adding a New Teen Driver select to help you find households with a teenager who is going to start driving.
New lifestyle selects are also being added. These selects can help you get closer to consumers based on lifestyle behaviors that may influence their vehicle purchasing decisions.
Ready to take your marketing Multi-Channel? Now you can! We are adding in additional data sourcing to provide extended coverage to contact these consumers by Email, Mobile Phone, Landline Phone, and our Multi-Channel Flag.
What indicators are being added?
New Teen Drivers
Indicating that in the coming months or that there is a new teen driver in the household.
New Vehicle Purchasers
Someone in the household has indicated that they’re interested in purchasing a new vehicle.
Used Vehicle Purchasers
Someone in the household has indicated that they’re interested in purchasing a used vehicle.
Someone in the household has indicated that they own an RV.
Someone in the household has indicated that they are interested in boats, have purchased a boat or have interest in purchasing a boat.
Someone in the household has indicated that they own a motorcycle.
Someone in the household has indicated that they own a truck.
The Truth About Your Best Weapon
Every day, thousands of advertisers and marketers wrack their brains. How do you spread your message, sell your products and change people?
Simple. Give something away for free.
Could this be the most powerful business idea of the century? Look at Google. Giving out free things made them obscenely rich.
A free search engine, YouTube and then Chrome, the free browser everybody uses. Plus free maps, free email… on and on.
Doesn’t free make your stuff less valuable? Nope. People don’t value things because they paid. They value what others value.
Doesn’t free attract the wrong people? Sure. But it attracts everybody. And if everyone likes it, it’s valuable.
And when people are hooked on it and they need it? Now you can charge real money for it. Or create a bunch of services around it and charge for them.
And since free works so well… you’re bombarded by it every minute. Chances are, you won’t even finish (or get the value) of this article. All because you’re distracted by something “free.”
The Cost of “Free”
Are you an entrepreneur, marketer or creative person? You’re especially at risk for this shiny object syndrome. Creative people crave new ideas, new projects, new things.
The new thing is exciting. So you invest time and money in it. And then… something else comes along. Another new idea. Of course, with “free” training.
It’s like somebody brought free donuts in the office. Mmm… tempting. Colorful sprinkles… creamy filling… you can taste the glaze just by looking at it.
And free? Don’t you pretty much need to eat one? It’s ungrateful to say no. Stupid to pass up such an opportunity. Right? Right?
Wrong. Dead wrong. Sugarcoated lies. Poison.
More than anything, new “free” stuff keeps CEOs, CMOs and smart people like you from completing projects. Jumping ship and switching strategies? This destroys consistency and momentum. And keeps you from ever seeing your potential.
A constant stream of new and free keeps you away from the best long-term game plan… Wrong or incomplete action is far worse than no action.
How many great ideas have you “tried” (but really just threw away) because of new and free?
And oh, does new and free ever make you burn through the cash!
So many hundreds of techno tools with free trials. All so impressive, effective and fun to use.
That is, until your accountant (or empty bank account) says you’ve subscribed to too many services. And jumped between too many platforms.
Do you work with employees or business partners? Oh… this is even more terrible.
Your people won’t keep up. The new/free stuff changed direction in your business yet again. And when the previous projects, tools and goals are suddenly irrelevant?
Harvard Business Review’s grim answer: your people won’t be loyal anymore. Nor productive.
A decade ago, information overload (distraction) costs the US economy $900 billion per year. Do you think it’s any better now?
Most people spend 20 hours a week managing distractions from emails alone. And even if you could recover the money, the time is gone forever.
If someone offered you 3 days of free training, what would this really cost you?
Free training is noise. It almost never gives you all you need to master the new skill you want.
Get rid of the messes and noise in your life.
Everyone’s fighting for your attention. And too many people are stealing it. Distraction is the greatest thief of time – and you can never get it back!
Sure, sometimes you need new innovation, new ideas. They can spark life into your business. But too many sparks cause out-of-control infernos.
Make sure new ideas give you strength, not destruction.
The Great Rewards of Minimalism
Why did Steve Jobs always wear a black turtle neck, blue jeans and his New Balance sneakers every day? As the co-founder and CEO of the most valuable company in the world…
What did Steve know about decisions and distractions that most people don’t?
Every decision, every distraction sucks up mental energy. Even a small one, like what you’re going to wear. Instead, he wanted 100% focus on making Apple legendary.
“It’s what Apple said ‘No’ to that ultimately made them successful.” – Steve Jobs
Special forces on a military mission realize this. They maintain strict isolation. No contact with other teams, no TV, news nor internet. Why?
To protect their focus and deliver perfection on their goals.
How can you do this?
If you want results like you’ve never gotten before, get crystal clear on what you want. Then clean out all the distractions. Strengthen your focus.
Make your work environment and schedule as predictable as possible. The fewer decisions you make, the more effective they’ll be.
Once you develop this attitude, your life suddenly gets simpler. And it’s simply the fastest way to reach your goals.
Don’t Just Pay For Training, Learn Like A Master
People go crazy, even with paid training… books, conferences, seminars, multiple coaches, videos and programs.
And yet they’re completely overwhelmed. Stuff just sits on their hard drive or bookshelf. Useless. They don’t apply any of it.
Yes, you need a wealth of knowledge to build real wealth… but implementation is the key. How fast can you put the knowledge to work?
There are two kinds of learners: amateurs and masters. Both want just as badly to transform their life and business.
The amateur wants to get as much information as possible. As fast as they can. And the motivation feels good and helpful for a bit.
But as time goes by, there’s no real change.
The master learner knows exactly what their goals are. And yes, their goals might mean learning lots of skills down the road.
But what are the one or two skills to focus on right now?
And the master learner picks the right mentor or coach: somebody who stretches them just enough to change…
But not so much that the learner wants to give up: the master makes sure the training is broken down into manageable chunks. Reachable deadlines. Simple actions.
And the master doesn’t move on to anything else until they… you guessed it… mastered the skill they’re learning.
Which Kind of Learner Are You?
What does your finances, your business reveal?
Now that you know the honest truth about new ideas and free training, what will you do?
Yes, giving away free stuff can be your greatest marketing weapon. But eating up time consuming free stuff is easily the biggest business problem today.
Make it your aim to be the kool-aid producer, not just a kool-aid consumer.
And when it comes to kool-aid, only drink the flavor that makes you more alive. The kind that rockets you toward your goals.
Marketing Tactics That Will Actually Make You Poor
It’s so frustrating.
You heard some advice that really seemed to make so much sense, so you go for it. All in, 100%.
But then you grind and grind and nothing happens. You stay up late and hustle for every single response. It’s like you’re spinning your wheels, not getting anywhere.
What’s the problem? Does the idea even work?
Good news: marketing still works, and really well. Don’t give up. But there are a lot of popular tactics that won’t move the needle.
So why not ditch the useless ideas and start upping your game (and results) with what’s actually working? But to do this, you need to recognize these tactics that make you poor.
Here’s the first one…
Investing In That New Thing Because Everybody’s Doing It
Take AI, for example. Accenture Interactive says 80% of B2B marketers feel AI will revolutionize marketing.
Yet Andrew Stephen, writing for Forbes points out:
Look how easy it is to get Siri or Alexa confused – just ask the wrong question. Data quality is a huge issue. Garbage in, garbage out. If you feed poor marketing data to AI, you fail to get results.
Another big issue? Nobody agrees on the terminology yet.
Greedy sharks are throwing out fancy tech words and making big promises… But if you don’t carefully find out what they’re talking about, you’ll get sucked in. All your money gone. Nothing in return.
Slap together an audience selection tool, choose a few triggers, time a few messages and voila! A brand new “AI” thing with a big price tag. “Of course you should buy it,” they say. “Everybody’s getting into AI.”
Newsflash: it’s not really AI. And marketers have been using this simple, relatively inexpensive process (audience selection, triggers, message timing) for years.
Yes, you should innovate, disrupt and adopt new things, but… how much more profitable to ask yourself first: Where’s my business really at? What growth stage am I in?
If you’re a small business or just starting out, you definitely don’t need an advanced-stage marketing tactic with a high-dollar price tag on it. No matter how successful people say it is.
What to do instead?
Go back to the basics. Look at the marketing that’s always worked and still does: Pick up your phone and call people. Send emails. Leverage direct mail. There’s a far more predictable success rate here.
People know this, but why do so many still avoid what works?
It’s because you’re told to…
Just Do The Marketing That’s Comfortable
Maybe you hate selling face to face. Or on the phone. That’s why those supposedly enlightened gurus say, “Do what you love.” True, it helps to be excited about your work. And you should always sell yourself on what you’re doing.
But if you take these “follow your passion” phrases literally, you’re on a road that leads to…dead broke. So many of these traditional-marketing haters decide that digital is the only way to go, so they…
Hide behind the keyboard and pray to get rich quick.
And some metrics are so misleading. One Twitter influence metric can rank you in the top 2% of your industry, even if you have almost no clicks through to your website.
Other people crank out video after video on Facebook Live or Periscope. And while this works for some…
Hearts and thumbs up will not pay your bills.
What about paid advertising? Will you get the results you want with Facebook audience targeting? Let’s say you want to target everyone on Facebook with a yearly income of $50,000+ who also like boating.
But if you’re not targeting that same audience with mail and email, what are you missing?
Guaranteed, there are quite a number of middle-class boat enthusiasts who don’t really use Facebook that much. And an even larger number who might use Facebook, but they won’t get into your sales funnel this way.
Speaking of funnels, ever heard of click funnels? You can spend a truckload on these – but how much money will they really make you?
Granted, some people make a living with these things. Yet how many businesses are finding out the hard way that they aren’t what they thought.
What to do instead?
Even digital marketing experts agree: don’t sell directly on social media. The only purpose of social should be to get people onto your website and your email list. Where you can… sell them directly.
Ask yourself: What is going to get me to my audience the quickest? How do I get in front of people who will spend money? What’s the quickest way there?
Inevitably, this leads you back to the basics… calling people, collecting and sending emails, using direct mail.
Here’s another road to the poor house…
Just because somebody says is free doesn’t make it free.
What if somebody called you up today and gave you 3 full days of free training? And what happens, if after 3 days, you realize: well, that was kinda cool, but I knew most of it already. Common sense stuff.
Or they show you only one piece, just one of the many ingredients you actually need to succeed.
And in case you hadn’t figured this out… free training is there to sell you something. And of course the presenter makes it look SO easy. But the reality is, what you learned can sometimes take you months or even years to get set up and working profitably.
Truth is, those 3 days didn’t REALLY help you. You could have been using your time to actually get customers. So how expensive were those 3 days…really?
Well, how much do you WANT your time per hour to be worth? And once you’re actually worth that much per hour, you’re going to get paid that much. Without fail.
What to do instead?
Be very intentional with what you learn. When you write out your goals, ask yourself: what exactly do I need to learn to reach these goals?
And then force yourself to learn ONLY those things. Don’t get distracted.
What All This Means For You
Small and medium-sized businesses are getting fleeced by so many schemes and scams. All while good old-fashioned phone calls, direct mail and email marketing will help your business grow.
Think of what stage you’re at in your business. If you’re mowing lawns (or anywhere near just getting started with your business – you know who you are), you don’t need click funnels or AI.
Maybe you just need to use door hangers. Or a sign on your car. Or pound the phone. Even Mark Zuckerberg got Facebook started by sending a bunch of emails to his college buddies.
Sure, there are all those cool, shiny, fantastic marketing tools out there. But they may not be for you. At least not yet.
But if you stay focused and stay away from all these distractions, you can actually take your business to the next level. The level where there’s no more frustration, stress and worry about what works. Where there’s freedom to play with new ideas and options.
Where growing your business is fun again.
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A Huge Mistake That Will Kill Your Profits Immediately
At first everything was great. Tens of thousands of customers accept offers and cash in on coupons. The customer analytics data pouring in is an absolute gold mine.
Any company would love to have these solid, specific, fresh details: what offers people are actually responding to, when, what they’re buying, how they’re buying, what they’re ignoring and what they buy again.
But then the bottom dropped out…
The marketing director suddenly decided to ignore all this precious response data and go in a new direction. Months later? Sales are stagnant and everybody wonders what happened.
2017 was a bloodbath for companies making stupid mistakes like this. And sadly, the trend will continue. Why? It doesn’t have to happen, but people simply refuse to learn to market. “You’re selling from your heels,” the well paid expert explained to the nearly dead company. How does he explain the advice?
“It means you don’t 100% believe in what you’re doing.”
Despite all the hard work they put into marketing, tracking customer behavior, analyzing the data and sending out more offers… they threw it all in the trash.
Let’s say you have an employee. He’s a likeable and friendly salesman. But there’s a customer with deep pockets standing outside your door. And a whole week goes by. The customer still passes your door, pausing, waiting for an invitation to come in and buy. But your employee does nothing.
How long would you keep this employee?
Do you make this same blunder with your response data? It cost you real time, effort and money to execute marketing campaigns, track customer behavior and then store the data. Yet if you do nothing with it, this will cost you far more money than you ever spent to get the data.
In one study, 93% of businesses say data is important (or very important) to their success. Yet some companies lie to themselves: “Oh yes, we use our data.” But the truth is, they don’t send out any marketing until the next quarter. Data from the last quarter or last year?
It’s actually rotten by now. Unusable.
Nobody can deny it. Our business environment is changing so rapidly it takes real focus to keep up. It’s vital to know exactly who your target audience is… this month, this week, today. And it’s becoming essential for survival to use behavior data to narrow your focus down to who is going to buy right now.
Let’s say your analytics find 100,000 people who look just like your current customers. Yet predictive modeling shows that only 15,000 of these people will buy immediately. You’re smart. You don’t dismiss the other 85,000. You simply market to them differently than the 15,000.
You keep on digging. You find 5,000 among the 15,000 who become the prime focus of your marketing initiative. And you send out offers to them at least every month.
Companies who will dominate this year have a strategy and a plan that includes action like this. Are you starting to appreciate why it’s absolutely critical that you use really reliable data?
And then act on it?
The biggest mistake companies make is failure to take action. Enough action. Often enough. To grow their business and achieve the results, success and freedom they want.
Don’t make this mistake. Guard your data. Use your data. Refresh your data. Profit from your data.
Let’s make this year the best one yet.
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Why Behavior Data Is The New Unfair Advantage You Need
Two, 5 or maybe 10 years from now, the story of you and all the other companies in your industry will be exactly like Amazon vs. Walmart, Target, Sears, KMart, etc. There will be a couple who turned out sort of okay. There’ll be a lot of losers and one amazing success story. You can be the success story, and here’s how.
Everybody’s talking about mobile device data, big data and behavior data. But the real question is: How should you be using this data right now? (And yes, you should be.)
Think for a moment about how people act and what this tells you. For example, the armed forces know they’ve had a lot of success recruiting young people who:
- Have a veteran (or someone currently serving) in the household.
- Visited an armed forces website.
- Are taking some responsibility (looking for a job, getting a car or planning for college).
This is a great example of propensities. In this case, a person with a high propensity to join the military. People who behave a certain way are more likely to take an expected action. The more criteria they fit, the higher the propensity they have (the more likely they are) to act.
Notice the first item (veteran in the house) is a simple demographic. Marketers have known about and used demographics for years. And what about the website visitors? Cookies and targeting pixels can often be matched to specific people with their consent. (They entered their email, filled out a form or requested information.)
But what about the last item? Back in the day, there were only desktop and laptop computers. Now, almost everyone uses their mobile device.
Keyword tools can tell you what searches people type into Google. But can you see how the apps people install on their phones tell you so much about them? They tell you people’s lifestyles, habits, even the purchases they are about to make.
How can you use this information? Well, you could make a list of certain apps and target anyone who uses them. One little problem with that: tons of brand new apps are popping up on people’s phones every day. Your criteria is obsolete before you can use it.
How can you solve this? Categories. Every app falls into a finite number of categories. In the example above, some apps fall into the job-seeking category. Other apps are for college planning.
If you sell cars, imagine how useful it would be to know that someone in your area is searching for a car right now. Either on your lot or a competitor’s. Even if they’re searching for Fords and you sell Chevy – wouldn’t you like to know about them? And as you can see, behavior data not only tells you who – but can tell you when to make people offers.
It gets better. To get the best deals, consumers are happily revealing their location through their devices. And even the purchases they make. Can you see the opportunities here?
Yet there’s another reason you should be using behavior data now. Earl Nightingale, one of the first business philosophers said something really powerful:
“If you really want success…you can get a head start by looking at what everybody else is doing and do the opposite.”
It’s strange advice for those not familiar, but it’s a great strategy for those who are serious about improving their business. Let’s deal in reality here. Most people want 100% certainty before they dive into a marketing method. (And most people make excuses instead of progress, too.)
Mobile device data, behavior data and propensities are still new. And yes, there will always be a bit of unknown in any marketing strategy. Yet the risk behind behavior data is far lower, far safer than just using demographic data or all those marketing tactics people used in past decades. When you use methods like behavior data to narrow your focus and target a specific audience, you don’t just get a little better – your marketing gets exponentially better.
Not everyone will act on this. Some will just talk. Others will wait and see. And that’s why some companies will sort of do ok. Most of them will fail. And only a few will win big.
What will you do?
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How to Succeed With The One Habit of Highly Effective Marketers
This one habit is everything: finding the right people.
Because let’s face it, this is more important than all the sales methods, copywriting techniques and negotiating tactics in the world. The wrong person doesn’t have the money. Or they don’t care. Or may not be as easy to convince.
If your marketing doesn’t get you in front of the right people, you’ll never sell. Plain and simple. Yet even this is not enough. In these competitive times, if you try to sell to everyone who will buy…you will fail.
Starbucks understands this. They know that 40 out of 100 people are willing to pay 50 cents for a cuppa joe. Yet they find and focus only on the 8 people willing to pay $2 to $5 for the luxury blends. (And this is why all those corner coffee shops went out of business.) If you’re not targeting the crucial 20% of your audience (or 10%), you need to learn how. And how do you do it?
Predictive analytic models.
Yes, there are a variety of these models to increase your revenues and delight your customers. But don’t let all the science or choices scare you. Here are some (hopefully) simple, real-world examples to help you know what to do.
Think of these models as tools in a toolbox. (You wouldn’t use a saw if you needed a hammer.)
First, just like in the Starbucks example above, you need to segment (or cluster) your audience. Who are the 50-cent people? Who are the $5 people?
This is not just demographics like age and zip code. Want to delve deeper and get a more profitable answer?
Some of your customers may be big spenders on their first order. Others may purchase less at a time but be more loyal, long-term buyers. Still others may buy more because of discounts. Do they contact you via your website, in person or use the phone?
Not only could you look at average order size or total revenue for each…what about days between orders? Total number of orders? Total items per order? Size of first order? Number of products in their first order? Percentage of spending on discounted items?
Let’s say you have a group of frequent buyers with small orders. A simple offer like this could really increase your profits: “Earn double reward points when you spend $20 or more.”
You could also segment your customers by product. Do they like coffee or tea? French or Italian roast? If you represent multiple brands, which brands do your best customers prefer? Which brands do they have the least interest in?
Have you thought through who your best customers are (or might be)? Talk to an experienced data provider about this kind of segment/cluster modeling to help you analyze your own buyer data. And once you know who your very best customers are, you still need to find more people like them. How?
Propensities Predict Profits
The best data companies can also match your best customers with their records – and find a whole lot more of the best kind of people, ready to buy from you. From this new, larger list, propensity modeling can rank each listed person a number of ways:
You can predict someone’s…
- Future lifetime value as your customer – even before they buy from you. This data also tells you their demographics, email and what channels they use to buy. Can you see just how valuable this is when choosing how to market to them?
- Share of wallet. For example, if a customer spends $100 with you, is this 10% or 90% of their total spending on this type of product/service for a given time period? If you know your future revenue potential with them, you can design campaigns to capture this money.
- Propensity to engage. If they don’t click on emails, you don’t want to send emails to them. Or you might see that they will answer the phone or open direct mail.
- Propensity to unsubscribe. This allows you to know how often to send them emails. If they are good buyers but likely to unsubscribe, send them emails, but less often.
- Propensity to convert. You already spend enough getting offers in front of people. Reduce your spending by only putting offers in front of people likely to respond.
- Propensity to buy. When you know who is ready to buy and who isn’t, you also know how aggressive to make your offers. And ready prospects don’t need high discounts. Stop eating up your margin with them. (But you might want to make more aggressive offers to get incremental profits from people who are still high value.)
- Propensity to churn. One auto insurance company used this model, calling it their Auto Insurance Switcher model. Think of how profitable it is to know who is likely to buy your insurance now but switch next year to get the current cheap rate. Instead, you can reduce ad spending while increasing profits – all by targeting people more likely to stay with your company.
What You Must Know About Propensities
Propensities, when used right, can be scary accurate. They can predict what people will do, long before even they realize what they are going to do. Yet this kind of math has lots of variables. Here are a couple common ways to fail:
- Use one provider to analyze your data, but buy your list from another vendor.
- Use one set of methods to select your best customers, but another set of criteria for your prospect list.
A good data partner can help you gather your data, compile reports, identify your audience and best prospects. Every winning company this coming year will take their data and their data partner very seriously.
After all, finding the right people is the one habit of highly effective marketers.
What will you do? How do you find the right people?
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Save 80% Time & Money: How to Market to the Crucial 20%
Wouldn’t we all like to save 80% of our time, money and marketing effort, while getting 10 times or even 100 times the results?
However, that’s just what Cara accomplished. Let’s see how she did it, and how easily you can do the same.
Starting out, Cara did what most failing marketers do… she found a “deal” renting a cheap list of 5000 prospects for 20 cents per name. It cost her an extra dollar per person to get the offer in front of her list. Total cost: $5500. Since 40 people bought her product at $100 profit each, she got $4000 back for her effort.
Poor Cara. She lost $1500 on this campaign. (Okay, I rounded the numbers, but this is really close to what happened.) Sadly, she thought her target audience should be “everyone interested in my product.” But the school of hard knocks really motivated her to take a closer look at buyer personas and exactly who her ideal audience is.
“What things do I need to look at to find my ideal customers?” Excellent question, Cara.
Fortunately, she found a great data provider who guided her through modelling tools and buyer propensities. Cara selected a list of only 500 prospects. Sure, these extra data analytics cost $2 per name instead of 20 cents each. Was it worth it?
Well, considering she spent the same dollar per person to get her offer in front of the new list, her total cost was $1500. This time, she sold to 30 people, making sales totaling $3000. Yay for Cara! This time, instead of losing, she doubled her money.
Really though, she saved 73% of her marketing cost. And she converted 7.5 times as many prospects into sales. But, you may say, how could you get 100 times the results? Another great question.
We’ve all heard of Mr. Pareto. The original 80/20 guy. Truth is, his principle can be applied to itself. Not only will 20% of your best prospects give you 80% of your profits… The top 4% of your prospects will give you 64% of your profits. (20% of 20% and 80% of 80%.)
So, if you can identify the top 20% of your best prospects, you can really be 16 times more profitable. And if you identify the top 4% of your prospects…wait for it…you can be 250 times more profitable . If you are not following this formula, “you are leaving millions on the table,” says Brian Kurtz, Executive Vice President of Boardroom Inc. and leading direct marketing expert.
Don’t think it’s that valuable to niche down this much? Look at Amazon. They specialize in one tiny niche after another. And even a decade ago, that’s how they sold 50% of their books. Even small businesses can compete with large companies by targeting a smaller niche like this.
How can you make this easy for your business?
Let’s say you’re the Dallas Cowboys. Most fans will get into the stadium for $19. Some of them will get $1000 season tickets for the mediocre seats. Only a few will get the $10,000 seats near the 50-yard line. And a tiny fraction of them will dish out far more money than this to enjoy the ultra-exclusive sky boxes. How much will a raving football fanatic (with money) spend on football? A virtually unlimited amount. You want to find THIS kind of people. And you CAN (and should) find them.
Even if you’re only the company selling the peanuts.
Ask yourself about demographics: Who are your best customers? How old are they? Where do they live? What about their gender, income level, education, family/marital status, occupation and ethnic background? Now, ask yourself about their motives. What makes them buy? What is their personality, attitudes, values, interests/hobbies, lifestyle and behavior?
How can you know this stuff?
It’s not as hard as you might think to learn the right way to use a propensity modelling tool. Or some brand new (and yet relatively inexpensive) methods to give you real behavior data on your ideal customers.
Or better yet, call us. We’re happy to walk you through our tools right now.
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