From Market Segmentation to Customer Segmentation: Opportunities for Competitive Advantage and Growth, Part 5

In the final article in this series on strategies and tactics to help multichannel marketers find and take advantage of opportunities for growth, increase profitability and gain competitive advantages, I provide brief examples of how the strategies discussed earlier in this series can be used for short-term results.

(For part 1, click here; part 2, here; part 3, here; and for part 4, click here.)

Although some of the strategies from the previous articles are primarily for achieving longer-term objectives and goals, they all can be applied to optimize existing strategies and begin developing new ones.

* Market segmentation: Target different purchase motivations instead of implementing a one-size-fits-all messaging strategy. Target advertising to different audiences for short-term increases in customer acquisition and/or sales.

* Competitive strategies/branding: Optimize your competitive strategy — i.e., how you compete with direct competitors — and branding/positioning based on competitive analysis to reap short-term benefits.

Working with a client recently, I spotted a competitive analysis that identified an advantage and opportunities to own “share of mind.” This retailer quickly integrated this advantage into advertising, a customer acquisition microsite and offer strategies.

* Acquisition products: In conjunction with market segmentation and product positioning, there are short-term opportunities to increase customer acquisition results.

Take a look at recent customer acquisition results. For each product, total the number of customers acquired; then calculate the total contribution margin generated by each product. Sort the two lists in descending order, and optimize your acquisition strategy based on whether your priority is new customers or contribution margin.

* Multichannel marketing: Short-term multichannel marketing provides two opportunities to increase top- and bottom-line results: better integration and redirecting budgets based on return on investment.

By focusing on a handful of products generating the majority of your customer acquisition and sales, and integrating your timing and messaging across channels, you can increase e-commerce sales by double digits.

* Buying cycle stages/shopping behavior: Easiest, least expensive and fastest to do online, there are likely numerous opportunities to optimize your e-commerce sales, online lead generation and customer acquisition by targeting different buying stages with paid search advertising copy/offers, landing pages and microsites.

With low-cost e-commerce store/website visitor intercept research, you can quickly identify the different needs and shopping behaviors of your online visitors, and optimize your existing company website or e-commerce store.

* Customer segmentation: Traditional catalog and mail order marketers have known for a long time that customer segmentation based on transactions can provide quick increases in sales and profitability. For those new to direct marketing, because the same tactics can work with email to increase sales, the following are short-term opportunities to consider:

• Due to the high costs of sending catalogs and direct mail, it's imperative to model customers based on RFM, create break-even analysis, and redirect budgets for short-term sales and/or profit increases. This is a short-term strategy only; over time, it'll reduce the size of your active housefile.
• For email, RFM-based marketing won't have a major impact on profitability unless you have a huge housefile. By effectively targeting your most active customers, however, you should see increased short-term sales.

Paul Becker is a multichannel marketing consultant. Reach Paul at (702) 587-9011 or themarketerpaul@yahoo.com.