Contributions to Profit: Plan For 2007 and Rank Your Customers, Prospects
5. Suspects. People you suspect may become customers, this group is the basis of any new customer acquisition plan. It consists of various target markets within and outside your product category. Since you have no history with this group, only suspicions, test carefully as you would anything new.
Up the Food Chain
When thinking about your plans, try to follow the Pareto principle: 20 percent of your customers (buyers and advocates) will fund 80 percent of your business. Therefore, the goal of your plan should be to move each person higher up on the food chain with each marketing effort.
This industry tends to be focusd on circulation plans. Too much effort gets placed on prospecting, and less effort goes into converting triers to buyers, buyers to advocates and keeping advocates happy. We look at our customer categories as numbers on a spreadsheet, not as individual groups of people who need certain attention (beyond the number of mailings sent). We have loyalty programs as well, but these days loyalty programs have reached a certain degree of parity and tend to lack differentiation. It costs a great deal of money to prospect — as we all know — but we can contribute more to our bottom lines by focusing on the other four groups.
So what can we do, beyond the circulation plan, to impact our business and create more multibuyers and advocates? In the second part of this series in the December issue, I’ll flesh out some promotional ideas you can use to move prospects and customers through the hierarchy. In the meantime, send your tested and untested ideas to Editor in Chief Paul Miller at firstname.lastname@example.org.
Jim Gilbert is president of Gilbert Direct Marketing and professor of Direct Marketing at Miami International University of Art and Design. Contact: email@example.com.
Jim Gilbert has had a storied career in direct and digital marketing resulting in a burning desire to tell stories that educate, inform, and inspire marketers to new heights of success.
After years of marketing consulting, Jim decided it was time to “put his money where his mouth was" and build his own e-commerce company, Premo Natural Products, with its flagship product, Premo Guard Bed Bug & Mite Sprays. Premo in its second year is poised to eclipse 100 percent growth.
Jim has been writing for Target Marketing Group since 2006, first on the pages of Catalog Success Magazine, then as the first blogger for its online division. Jim continues to write for Total Retail.
Along the way, Jim has led the Florida Direct Marketing Association as their Marketing Chair and then three-term President, been an Adjunct Professor of Direct and Digital marketing for Miami International University, and created a lecture series, “The 9 Immutable Laws of Social Media Marketing,” which he has presented across the country at conferences and universities.