Dear Customer, I Know EXACTLY What You Want (Part 5)
It’s one thing to understand who to target. It’s another to know what to offer them.
Putting relevant offers in front of your prospects and customers is one of the holy grails of effective marketing. Done correctly, marketers can expect to see a sizable increase in campaign conversion rates, not to mention an increase in transaction sizes (in more exciting terms: financial results!).
Helping your customers sort through a wide range of distracting options to suggest the perfect product or service helps build a better connection with them. Successfully implementing “best offer recommendation” techniques can help you stay top of mind with your audience and ultimately, drive increased marketing ROI.
To make this a reality, companies should consider a 4-step approach:
- Gather the data: The best way to understand how your customers behave is to first look internally at your own data. Gather the transactional data for all of your customers, as well as any other demographic or fimographic attributes that can be used to develop “look-alike” models.
- Identify your best customers: Your top customers are the ones who drive the majority of your sales and/or margin. Pick a method and separate these higher-value customers from the rest of the herd. The end-goal should be to replicate the behavior of these customers in your newer customers and prospects.
- Understand buying patterns: Segment your best customers even further into clusters with similar buying patterns. Construct “buying path” models to understand these patterns. These models will help determine how different customers progress in their relationship with your company over time.
- Apply models: Fit existing customers or prospects into segments appropriately. For existing customers, determine where they are along the path and identify the next logical progression. For prospects, identify the ideal starting point that will put them. In both cases, it is important to identify the appropriate path and provide a nudge in the optimal direction with a relevant offer.
Understanding buying behaviors across your prospect or customer base can yield invaluable information as to how buyers interact with your company. It often provides critical insight into the right direction you should steer your customers in. Many times, they would have headed in that direction anyway, although the upside is that you may even uncover something they didn’t know they wanted in the first place! Either way, relevant offers based on behaviors that have proven successful in the past can turn good marketing into smart marketing, leaving a powerful and lasting impact on your bottom line.