How to Segment Special Occasion Customers
Oprah Winfrey has been good to many businesses. Who will ever forget when she gave every member of her studio audience a new Pontiac?
If lucky, Oprah would promote a product that your company sold. When I worked at Nordstrom, it was the beneficiary of good internal PR, merchandising and marketing staffs, coupled with Oprah’s kind words.
Sales would flood in for whatever item Oprah promoted. For the next few days, sales and profit were great. At the end of the month, the finance department would tally our successes.
A good database marketer does something with this information. At Nordstrom, we analyzed the customers that purchased items featured on an Oprah Winfrey television show. We looked at whether these customers were new or existing, whether they repurchased or not.
Special occasion customers act differently than customers who purchase because of advertising or those who purchase organically. Special occasion customers are often new to the business, buying merchandise for reasons that are different than the average customer. As a result, these customers can be less loyal.
From a marketing standpoint, it's not terribly difficult to flag these customers in your customer database. Create a separate code for each special occasion, and then fold this information into your RFM analysis, statistical models or the information you routinely provide your co-op databases. Test different combinations of email marketing campaigns and/or catalog mailings to this audience. You'll likely find that these customers become less loyal faster than your average customers, requiring less marketing.
If you overlay demographic information, be sure to profile these customers to see if they're different from your core customers. Often, demographic overlays suggest that special occasion customers represent a different lifestyle or psychographic profile.
By flagging these customers as being “different,” you can increase profit and save marketing expenses while increasing your business and marketing intelligence.
Every one of us manages a business that features special occasions. Categorize these occasions, segment customers based on their behaviors and then treat the customers differently based on the results of your analysis reporting.