In order to maximize profit potential through direct marketing campaigns, it is crucial to target customers who are likely to buy from you. This is achieved through the process of profiling and modeling prospects and clients.
The days of mass mailings are over, as technology now allows for more precise and accurate targeting of specific customers. By collecting extensive information about customers, marketers can use profiling and modeling techniques to predict customer behavior and target them accordingly.
While these techniques are often used together, profiling involves overlaying data against an existing client database to create a snapshot of the customer, while modeling is used to sharpen the focus of a specific mailing.
While these techniques may add to the cost of a mailing project, there are several current trends that make profiling and modeling cost-effective. Rising mailing costs, coupled with the ability of computers to compute vast amounts of data rapidly and the availability of higher quality customer data, make it possible to analyze data before spending any money on postage, and to weed out useless names and mail only to the most likely prospects.
There are six factors to consider when building customer profiles: affinity profiling, demographic and psychographic data, lifestyle coding, mapping, cluster coding, and survey data. Affinity profiling analyzes current buying habits to better match customers to products, while demographic and psychographic data can be combined to yield a customer profile for marketing purposes.
Lifestyle coding, mapping, cluster coding, and survey data can also be used to enhance demographic and other data to build a more personal portrait of the customer. The direct marketer of today must be more precise and surgical in their approach, rather than relying on mass mailings to achieve their goals. With the use of technology, it is now possible to slice-and-dice data and create targeted campaigns that yield maximum profit potential.
