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Finding Riches in Niches

Learn How to Aim At and Hit Your Target Customer!

You’d like to use direct mail as a source of marketing, but you just can’t stomach the high costs involved, and besides the designing and printing, you’ve got the postage that adds up fast! And then if you add in the important principle of multiple touches…or in this case, multiple mailings…will the results justify the cost? They really can IF you do it right. You’re first mission is to properly identify the customer, or niche, that you are trying to target. Your customers come from all types and walks of life, but you have a group of customers that are your most profitable and most likely the 80/20 rule holds true here, 80% of your sales come from 20% of your customers. So the question becomes, who are those 20%?

Businesses need to be “Customer Centric”, or more focused on the customer’s needs than their own, of course once that happens you will find that the sales you need follow. Segmentation is the first step to a customer centric approach. Break your customers down by industry, age, income, ethnic category, likes, hobbies…whatever it is that allows you to identify your most profitable customers. Then look at each of those groups and learn what the criteria is that they use to determine their purchases. You can probably do a little research by talking to your best customers and asking them why they chose you, why do they continue doing business with you…etc. You will then be able to further define which groups are the most loyal and most likely to be profitable in the long term. So segmentation will ultimately give you several identifiable groups which will include things like:

1. Demographics: Age, Income, Gender, Profession, Business Category, etc.

2. Contribution: Revenue, Profit, Lifetime Value

3. Behavior: Product, Frequency, Channel, etc.

4. Attitudes: Loyalty, Trust, Anticipated Problems, Self-Destruction, etc.

The picture of your ideal customer, or several ideal customers should begin to emerge. What do you think you can do with this kind of profile? When you create a mailing list, or purchase one, you can narrow down your prospects to those that are most likely to buy from you. The idea is to shoot your marketingmore like a rifle…rather than the old shotgun approach. “Let’s send 100,000 mailers out and see what hits”, instead, let’s send out 2500 mailers to specifically target individuals that fit our ideal customer profile. Obviously your response will be better. A good list is 40% of the success of a direct mail campaign.

It is truly amazing to me the demographic controls we have available to us to help identify your customer and make a successful campaign. I had a builder once want to target homeowners with incomes over $100,000 and that had been in their current homes over 3 years to market their higher end homes to. We ran the count for the area they targeted and came back with 30,000 prospects. The number of prospects and the oversize mail piece that they had designed made the postage costs WAY exceed their budget. As we talked I had the idea that consumers that were in debt would not be likely prospects, so we added an additional qualifier to the list search and we only did selects that had approximate net worthe over $100,000 with the reasoning that anyone who didn’t was too much in debt to buy the homes they were selling. It took the list count down to 13,000 and put the campaign right on budget! I tell my customers not to think a select or demographic is a weird request, I can’t remember when we couldn’t find the information!

So target your niche! There’s gold in them thar hills! (if you dig in the right spots)

PIP Printing & Marketing Services

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