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How can marketers use Precision Marketing to increase RoI?

AdFalcon Blog Our online journal

Today’s consumers are well aware of the products they need and the channels to get them at a better bargain. Moreover, the number of promotions and offers brands keep sending to existing customers makes them spoilt for choice. But the offers and deals tend to lose relevance if they are done in excess and without a proper marketing strategy. The whole exercise will turn futile if the marketer is not targeting the correct customer set. As a result, consumers will eventually stop responding to offers that are of no use to them and will stop looking into the brand’s communications. So, to get them to shop more and act positively on their promotions and advertisements, companies need to devise marketing plans that can help them retain their customers. Today’s shoppers want to buy products from brands that understand their needs and tailor their offerings to suit them.

This is where precision marketing comes into the picture. It is a strategy through which marketers examine a particular customer segment’s requirements to make informed business decisions and increase their return on investment. This form of marketing relies heavily on the company’s capability to analyze tons of data about a particular audience segment and then use it to make a personalized marketing plan. With precision marketing, brands try to turn their existing customers into more frequent, loyal, and long-term buyers.

At the heart of precision marketing is market segmentation, where the brands divide the market into smaller and more specific blocks of customer to address their unique needs.  For example, brands can create a broader segmentation like ‘men’ or narrow it down to ‘men under 30.’ If they want to be more specific about whom they want to target with their promotions, companies can further narrow their market segmentation to ‘unmarried men under 30 years.’ The product requirements of all the customer segments will differ, and brands cannot afford to target each segment with generic promotions and offerings. So, precision marketing enables them to create highly personalized offers and deals that resonate well with their audience, increasing their top line.

As we have already discussed, the main objective of using this marketing technique by businesses is to retain the existing customers, and one of the ways through which it can be achieved is loyalty cards. Loyalty cards or customer reward cards are a great way not only to get the shopper to become loyal to the brand, but it also allows the company to gather a lot of data about their purchase behavior and their frequency to shop. Armed with all these details, marketers can continuously improve their existing precision marketing strategy to hit the bull’s eye.

Additionally, the success of the whole campaign will rely on how well the brand knows its customers and how meticulously they can chart out the market segmentation. Based on the available research data of their shopper’s behavior, it is of utmost importance for the marketers to be as precise as possible to identify the audience they need to target with that particular marketing campaign.

However, to attain the objective mentioned above, marketers have to first clearly define the goals they are seeking to achieve through their precision marketing campaign. Goals can vary from company to company; they can be big or small, but it is advisable to keep them measurable. Whether you are planning to increase your e-mail newsletter subscription or the traffic on your website, you need to be specific. Brands also design their campaigns to boost their click-through rates and call-to-action engagements, which drives their revenues.  Once you are clear on the ambition behind the precision marketing campaign, it will be easier to create content and promotions that will catch your customers’ attention and compel them to take favorable action.

Companies in retail and travel & hospitality domains extensively use this marketing technique to increase their revenue as they primarily thrive on repeat business, and the return on investment it provides is on the higher side of the scale. In addition, precision marketing is also a prevalent tool amongst small and medium enterprises because of its cost-efficient nature and higher returns. Apart from being a valuable strategy to retain the existing consumers, precision targeting also prevents their attrition problems which is also a crucial factor that impacts the health of the businesses. Overall, the results of precision marketing have been noteworthy in creating brand loyalty, increasing repeat purchases, and retaining shoppers for brands of all sizes, and if done diligently, it can prove to be a cost-effective tool that can generate high returns.