What Really Matters When Creating Personalized Offers

Dear Dr. pROfIt: Should my marketing team offer personalized marketing materials to consumers based on how far they live from a store?

Dr pROfIt: One of the mysteries of cross-channel marketing is the behavior of consumers in urban, suburban and rural areas. Not many businesses analyze customer behavior by distance to the nearest store, but that shouldn't stop you from doing so.

Customers who live within five miles of a store tend to act differently than customers who live 25 miles from a store. The customer who lives closer to a store typically responds to direct marketing in the retail channel, whereas the customer who lives 25 miles from your closest store is highly likely to use print and online media to facilitate purchases.

The customer who's 50 miles or more from your closest store is often more responsive to direct marketing than the average customer. This customer doesn’t have the retail opportunities of the average customer, and often lives in a rural area where broadband internet coverage isn't as prevalent as in an urban environment. Rural customers tend to purchase what you present to them, whereas urban customers tend to purchase after being inspired by advertising.

Personalizing messages based on store distance is a lot harder than basing messaging on purchase history. Focus your attention on personalizing marketing messages based on purchase history, as this data can predict future purchases. Once you’ve accounted for purchase history, an overlay of urban/suburban/rural customer information (or distance to closest store) will complement your personalization activities.

On average, purchase history is more valuable than geographic information. Therefore, use purchase history data in your personalization endeavors.