Targeting your marketing in a challenging economy
Ben Shipley, Chief Innovation Officer, Ovato
The Australian economy is under increasing pressure in 2019. Interest rates are the lowest they’ve ever been, wages are stagnant and overall economic growth is slowing. With that kind of outside influence, it’s important to play smart when it comes to your marketing dollars.
Instead of spending into oblivion, you need to be targeted, strategic and thoughtful, not only in your methods, but with where and how you apply advertising and marketing content. Targeting your marketing using smart data is the most powerful way of getting to your customers, and one that doesn’t need mega-bucks to have a proper impact.
Right place, right time, right product
At its most basic, targeted marketing involves breaking the market into pieces or segments and concentrating your efforts on the sections that will have the most positive impact on your business. Instead of just dropping catalogues in thousands upon thousands of letterboxes from Bondi to Blacktown, hoping to find the proverbial needle in the haystack, you’re speaking directly to groups of customers who are most likely to buy your product or service.
The moment you break your market into targetable groups, you’ll discover efficiencies and savings, as you’re not working to cover as much ground as possible. For example, demographic segmentation uses basic measurables such as gender and age to identify large groups. While it’s a start, it doesn’t provide the ideal level of granular detail you need to get true efficiency.
Geographic segmentation, on the other hand, breaks the market up based on location. It assumes that grouping people together based on where they live means they have a shared need or desire for products and services. It’s community minded.
More sophisticated data segmentation is becoming increasingly accessible and will give you the edge over competitors reliant on these more basic targeting tactics. With real transactional and behavioural data, you can start to understand customers’ habits, lifestyles and interests. And as AI tools become ingrained in businesses, you can identify the next action a customer will take with you, using predictive data.
Getting more bang for your buck
While undertaking this kind of segmentation is a good first step, how do you put it into practice?
As an example, the Federal Government recently passed the Low and Middle Income Tax Offset, a tax break for small and medium income earners that should see between $255 and $1,080 finding its way back into some people’s pockets. This means that some otherwise cash strapped Aussies are going to be a little flush, and many will be looking to loosen the purse strings from July. However, the amount that people will receive from the breaks will differ.
If you’re selling TVs, you don’t necessarily want to reach consumers getting the minimum amount from the tax breaks. You do, however, want to reach those getting the full $1,080. They’re the ones who might be looking to spend big on a new OLED TV. Similarly, if you’re in the travel industry, you’re seeking potential customers who have an extra thousand dollars in the bank, not someone with the minimum amount. However, if you run a chain of beauty salons, looking for those on the minimum tax break is a good idea, as a massage or manicure is more affordable than a trip, yet still a luxury people will be more likely to indulge in with extra money in their wallet.
This is where targeting your advertising correctly can really have an impact.
Applying some serious thought, analytics and data to who you want to reach is as important as knowing how you intend to reach them. More reasoning at the beginning of the process can save you time and money.
The same principles apply to all your marketing channels. If your audience is made up of parents with school-age kids, they probably won’t be opening email newsletters at school drop-off and pick-up times. Sending at 8 or 9 pm when the kids have gone to bed will have a better chance of engaging them, which means you’ll generate higher sales conversions. Similarly, social media advertising that is blasted out to a national or state-wide area will reach a lot of people to whom your product is completely irrelevant. Narrowing it down based on interests will be more useful. So, if you’re a bookstore targeting avid readers with a new release, look for those who follow other book-related pages and stores, with interest in the relevant genre, such as fantasy or crime fiction.
The customer is changing
It’s clear that customer needs and wants are changing. Each customer is also wildly different depending on who your audience is. And they’re expecting more from businesses, and willing to take their money elsewhere if their needs aren’t being met.
By deciding on your market, equipping yourself with the relevant customer data and focusing on specific targets, you can keep your spend down while maximising your impact.