As a business, you want to maximize your marketing potential every time you use direct mail. The only way to accomplish that, besides coming up with killer copy or a premium that knocks people’s socks off, is through market segmentation and targeting.
The following are several ways you can use market segmentation with your direct mail to increase the response rate of your audience.
Demographic
Demographic data is known, collected, and specific characteristics about people. Marketers pull records based on specific demographic characteristics to tailor a message and a product or service to a particular group of people.
Some demographic criteria that are often maintained on customers through internal and external data collection include, but is not limited to:
● Full name
● Street address
● ZIP Code
● Homeownership status
● Age
● Occupation
● Employment
● Purchase activity
● Political affiliation and involvement
● Hobbies and interests
● Income
With just the information associated with that list, you could create a customer profile and target your direct mail appeals to your core audience. Doing so would achieve the following:
● Cut down on postage and production costs
● Increase the likelihood your appeal will be well received
● Increase your market contact to purchase ratio
The key with demographic data is to be more refined with your criteria to be selected, based on known market and customer behaviors.
For example, If your core customer is male, 25 - 55 years old, making over $100,000 a year that likes fishing, it makes no sense unless you are running a test to try and market your product or service to retired females over 60.
If, however, you can narrow the core customer criteria to male, 35 – 40 years old, making $110,000 a year that likes fly-fishing, you have decreased your overall mailing numbers but improved the likelihood you will sell your product or service.
Demographic Tips
Follow these tips to maximize your demographic selects:
● Personalize as much as possible
● Target major life events
● Factor age into pitches
● Do not make assumptions based on political activity
Location
By selecting the location of a person, you can tailor a message that will most likely resonate with them based on where they live. Someone that lives in New England, for example, will probably be more responsive to winter clothing deals than someone that lives in Arizona.
Most location selects are based on zip code. Secondary characteristics that might be targeted after zip code are town and street address.
In this way, you can tailor a message to your core target audience and use their location as a reason your products or services apply to them.
Location Tips
● Recognize location limitations (Restaurant delivery distances)
● Tie in with local events
● Segment deeper than zip code when marketing in rural areas
● Get your list cleaned up once every six months to reduce dead addresses
Known Needs or Interests
Data segmentation works with business customers as well. Suppose you are a project manager for a small business and have recently purchased equipment to better keep the devices on your network private and secure after a major security breach.
If you received a mailing that pitched anti-virus, firewall, or data backup software you would be more receptive than if you received information on contact management software.
Likewise, outside of business, people are also creatures of habit. That guy that just bought a fishing boat, will almost assuredly spend money on other fishing equipment, tackle, and boating products. They will probably not spend much on dining room placemats.
Known Needs or Interests Tips
● Be as general as possible in your data selects
● Do not assume – not all women like makeup or all Republicans are hunters
Mix and Match
A data selection can almost always be improved upon by narrowing your criteria as much as possible. The only way of doing that is to add requirements for a data record to be selected. The requirements should be attributes of the target community that increase the likelihood of them responding to whatever you are sending to them.
This is an effort of improvement by reduction. You are narrowing your potential target market, but increasing the likelihood your product or service would be considered and purchased. For example, if your average customer is male, over 45, college-educated and a homeowner, selling to all males over 25 does not make much sense.
The universe of the former group is smaller, but because it is your core customer, the likelihood you will be successful increases.
Mix and Match Tips
● Do not guess at your criteria unless you are testing
● Have an open mind regarding testing new data
● Test assumptions
● Remember customer preferences can change
