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Avoid the High Cost of Untargeted Marketing

by Mark Smith  |  
March 2, 2011

In this article, you'll learn...

  • The importance of targeted customer communication
  • Why personalization is key in marketing today
  • How to save resources by identifying the right customers to campaign to

To meet the growing demand for each customer experience to be tailored to individual preferences and tastes, marketers are quickly realizing they need to facilitate personalization across all marketing channels.

As our society becomes increasingly Web-engaged, users are growing accustomed to the personalized experience that Web 2.0 provides. With constant online access through smartphones and tablets, customer demand is starting to reflect the personalization perpetuated by the filtering, following, and friending options available on email, Twitter, Facebook, and LinkedIn.

Those capabilities allow users to apply their personal preferences to control what they want to hear and from whom. Those techniques have moreover bred the expectation that the same level of personalization should be available everywhere.

Delivering only relevant messaging to each customer is one way marketers can satisfy customers' growing demands and avoid wasting resources. By not reaching out to uninterested customers who will likely ignore unwanted information, or worse, become annoyed by it, marketers can save money and increase efficiency.

A sophisticated analytical technique called uplift modeling can empower organizations to target only those customers who will be positively influenced by a marketing campaign, helping to reduce campaign costs, improve customer experience, increase customer lifetime value, and reduce churn. More on uplift modeling later; first, a few words about why email is anything but free.

The Hidden Cost of Email

Though mail merges and email blasts seem a quick and "free" way of addressing a company's entire customer base by name with information about a promotion, new product, or service, they are becoming less effective—and, in some cases, detrimental to the success of marketing campaigns.

By sending untargeted generic emails intended to reach as many customers as possible, marketers lose the opportunity to engage customers on the personal level that those customers now expect. In addition, marketers risk driving customers away by contacting them about irrelevant products or services.

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Mark Smith is executive vice-president of sales and marketing at Portrait Software, a provider of customer interaction optimization software and now a part of Pitney Bowes Business Insight (PBBI).

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  • by Nick Stamoulis Mon Mar 7, 2011 via web

    It's always better to go after a more appropriate user, even if that means cutting down on the number of people you are actually reaching out to. While the audience may be smaller, going after a well-targeted user with the right campaign can deliver a higher conversion rate then the "see what sticks" mentality. It also has a better ROI because companies are spending money on marketing to good prospects and not wasting their time with an uninterested audience.

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