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Are Your Marketing Dollars Buying Customers—or Just Renting Them?

by Debra Ellis  |  
October 13, 2009

How many marketing dollars did you waste last year contacting customers who didn't buy from you? It's easy to look back to see where your investment was ineffective.

On the tangible side, there are the catalogs and direct-mail pieces that were sent to people who didn't buy. Less quantifiable are the effects of increased spam reports and lost goodwill because you persistently contacted people who have completed their life span.

Also, there's an ongoing branding debate about the value of impressions to build awareness and goodwill. What's the cost of bad impressions from over-marketing? It has to be exponentially higher than the value of good impressions.

How many marketing dollars will your company waste this year?

That question is harder to answer. How do you know which customers have completed their shopping life cycle with your company? If they are grouped in a high-performance segment, they may receive promotions for up to two years after they stop buying.

The problem is that in most marketing models all new customers are treated equally. The first purchase is the entry fee into the promotional funnel. Individuals are bagged, tagged, and sorted by identifiers such as recency, order size, and demographics.

Not all customers, new or old, are equal

Some customers enter the marketing funnel excited about your products or services and stay a lifetime. Your marketing dollars purchased the privilege of a long-term relationship.

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Debra Ellis is a speaker, consultant, and author of the integrated marketing guide Social Media 4 Direct Marketers. She is the founder of Wilson & Ellis Consulting ( and can be reached via

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  • by Nick Tue Oct 13, 2009 via web

    Very good article were just doing something similar but on actual client leads to sales ie breaking the lead down into Good, Average & Bad and rating the client as Good, Average or Awful. We hope this data will allow us to spend our resources on the group that matters most and if Awful and bad do go together

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