TakeAway: To find the “best” customer targets, marketers need to include digital and social behaviors into the profitability equation.
In addition to revenue measures such as lifetime value, current spending in category in dollars, current brand share, number and types of products or services purchased, and brand switching history/potential, there are also several other characteristics that make one customer more valuable than another because s/he’s easier to get and keep, as well as engage as co-marketers.
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Excerpted from AdAge, “How to Define a ‘Good Target’ in the Digital Age” By Kevin Clancy and Peter Krieg, November 17, 2010
Marketers have to integrate traditional and digital paid advertising with “owned” properties such as the brand’s website, as well as traditional and social “earned” media such as news articles and tweets in a way that gets them the biggest bang for their marketing dollar.
To separate the “best” from the rest, marketers need to find customers who are:
Less price sensitive. Unless you’re Walmart and want to grab share among the folks who put price above all other brand considerations, price insensitivity is another important indication of a buyer’s value to a brand and one particularly relevant these days.
Struggling with big problems. The bigger the problem your brand can solve, the bigger the market response.
Interested in new products and services from the brand. Introducing new products and services can generate the kind of organic growth companies crave. So why not ensure that new products and services will generate bottom-line growth by narrowing in on the customers most interested in considering the latest offerings from a brand or company? Apple’s pretty much got this one down.
Will advocate for your brand. The greater the level of influence a buyer has among her social networks, the more a brand’s marketing ROI will benefit.
Socially connected on the web. Because of the speed and number of tools available to customers to spread information about product and services online, word-of-mouth activity is even more important to capture in a digital environment. The more active and engaged a customer is with different social media, the more valuable he can be to a brand. Ford chose 100 20-something YouTube storytellers who’d developed a fan community of their own and gave them a Fiesta for six months. Each month they shared their experiences on YouTube, Flickr, Facebook and Twitter. Ford received 50,000 requests for information on Fiesta – almost entirely from new-to-Ford customers – and sold 10,000 units in the first six days of sales.
Rather than look at each of these things separately, though, marketers can and should bring together all of these “proxies for profitability” with financial data to calculate a single measure of value.
From an operational standpoint, then, marketers need to look for customers who are:
Distinct in terms of needs and wants. The more homogeneous and anticipated a target group’s needs and wants, the easier time marketers will have developing compelling positioning and messaging that breaks through in traditional and digital channels.
Relevant to traditional and digital communications decisions. Get a sense of how high-value customers use traditional, digital and social-media communications throughout the pre- and post-purchase process, and in particular, how they like to interact with a brand within different communication channels.
Findable in syndicated media databases. The “best” communications channels – either current or prospective – are the ones with a disproportionate number of high-value customers.
Edit by AMW
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