Many business owners think, “Everyone is our customer”. This is not necessarily true. This common misconception is the one trap that most often leads a direct mail campaign to failure.
Let’s say you were a chocolatier— If you sell chocolates that cost $2.00 each, and come bundled in dozen-unit cases, then the least your customer would spend is $24 for a case of chocolates. However, people on fixed or low income, for instance, are highly unlikely to do so. After groceries, rent, gas, and electric, they are unlikely to have the disposable income for a $24 case of chocolates. Presenting this offer to them would simply be money down the drain.
This is why targeting is so important. By using a targeted mailing list, you put your marketing dollars where they are most likely to have results. By looking at geography, demographics, and the things your prospects already buy, own, or subscribe to, you find out who would be interested in the offer before you send it, and you don’t end up using your marketing budget in unnecessary places.
Targeting starts with geography. Where do you want to sell? A radius around your store? A nationwide audience? Regional market area? No matter the size or scope of your market, it’s important to focus on those segments that will be most receptive to your offer, and most productive for your company. If you can only afford to mail 1000 pieces, don’t do a nationwide mailing. 20 mail pieces into every state is rarely productive. Unless you target your mailing so tightly that you are only reaching your very best prospects, you would be throwing good money after bad. You need to reach people who can buy from you today! Finding the balance— distributing your mailing into a geographic and demographic group that saturates properly, but remains within your budget and mailing run— maximizes your ability to reach new, ready-to-buy customers.
Next is demographic targeting: Who are your customers? Are they young? Old? Do they have children? Are they renters or homeowners? Asking these questions helps you eliminate households that would not have interest in your products, freeing up time and money to concentrate on those who do. I personally get mailings to my home (an apartment complex) trying to sell replacement windows, a new furnace, and roofing services. With over 758 units in the complex, that is a lot of money wasted on people that will never buy from them.
Look at your customers closely. Can you specify their age, gender, and income? Do they have children? Rent or own their home? Do they have high net worth, disposable income, or a specific interest in pets, crafts, boating or other such areas? These are the questions you need to answer.
As an example, Let’s look at a single zip code here in Michigan: 49506, East Grand Rapids. It’s an upscale market with some interesting characteristics.
|Number of Businesses||817|
|Sales less than $500,000||170|
|Physicians & Surgeons||39|
If you were to send a “saturation” mailing, but your product or service was used primarily by homeowners, you would be sending 2,830 pieces of mail to renters, who have no use for your products. Even with a postcard, the cost of postage alone for 2,830 mailings would exceed $760!
If your geographic market area is wide enough, you can narrow down your list by using subscriber-based or lifestyle-based selects. Typically, these highly-targeted options have much lower counts per-area, but allow you to specifically target mailings to people you know are already interested. If your business has a very tight geographical range, you probably would not benefit from these selects, as each demographic selection generally contains far fewer people per area. However, if you want to narrow down a wide-ranging direct-mail campaign, subscriber-based and lifestyle-based selection is the perfect tool for precision targeting. Typically there is a 5,000-name minimum for subscriber and lifestyle lists so the focus geographically must be greater.
As you can see, you can focus your business lists as well by selecting the size and type of business you need to reach. Don’t waste marketing dollars on market segments that are not going to buy from you. Less is more in most cases.
Successful targeting can make your marketing dollars go further. Don’t spend money talking to people who will never need your product!