The Value of Marketing Blog Series – Part 1: The Value in Targeting
Imagine this: you have a product or service that you feel is hands down the best product/service available in the marketplace. The good news is that your belief in this product/service is unwavering. The bad news is that no one else knows about it (or very few people do). They don’t understand what it is, why it’s great, and who it serves. They don’t know how it will make their lives better. And they won’t until you decide to start marketing the idea. Marketing is the process of researching, preparing, branding, and advertising your amazing product/service to the world. It is how you communicate to the marketplace the value of your product/service.
Unfortunately, there are times when marketing is seen as a cost centre, but in reality, there are so many ways that marketing can create value and drive your business forward In this multi-part series, we’ll share the different ways we’ve seen our marketing strategies and analytic intelligence have a dramatic effect on our various clients’ business.
So without further ado, let’s start.
The Value in Targeting
Using customer segmentation and targeting in your advertising campaigns is a science and can sometimes take months of research or experimentation. If you are not using relevant targeting, how do you know how much of your spend is reaching the right audience and how much is wasted?
When thinking about targeting and segmentation ask yourself these 3 questions:
- Do you know who your potential customers are and what they might gain from your product/service?
- Do you know which customer group is most loyal and how you attracted that customer or what service/product category they first purchased in?
- Do you know what product/customer type has the most value or spends the most and stays the longest with your organization?
This exercise is worth the effort and should involve analyzing your current data, talking to your sales team, reviewing any customer research or reviews, and if applicable talking to your customer support team.
Is Bad Data Wasting 20% of your Media Spend ?
At Vovia, we take marketing analytics and intelligence very seriously. The reason for this is because we know the value of clean, reliable data and its ability to feed marketing efforts, including accurate customer targeting. “According to a study conducted by Forrester Consulting on behalf of Marketing Evolution, wasted media spend is the highest-ranked repercussion of poor data quality (37%). A whopping 21 cents of every media dollar spent by organizations in the last year was wasted due to poor data quality, resulting in inaccurate targeting (35%) and lost customers (30%).” Source
That means that if you spent $100,000 on media last year, $21,000 was wasted! That is a big number! And not something you want to be reporting back to your stakeholders. At Vovia, we spend many hours researching the ideal target, but we also use data to confirm our assumptions. Here are four examples of how this has worked for us.
1. Determine customer value
We have some clients that sell a variety of products where some products and their customers have longer-standing relationships (i.e. 4 years) with the organization vs. other products where the customer might only be around for 1 year. If these leads are treated equally it is easy to focus on the higher volume lead, which likely would be a cheaper product with a shorter customer relationship. But if we look at the value of the customer as a whole we can start to target based on that value and not a single purchase or event. In another example, for one of our clients, we learned that the value of a lead varied by the customer/product type. Therefore we moved to a weighted model and this shift resulted in 12% growth in for the product in business revenue for their most profitable product (the year prior we had only seen 3% growth). It’s these shifts based on data that help drive the businesses we work with forward.
2. Understand that not all leads are of equal value
What about overall business revenue? We had a client in 2021 who switched to Vovia from a prior agency and found that their leads dropped by 30% in a particular market year over year. This sounds like a bad news story, but what we found was despite that decline in total leads, the revenue for that client ended up being 25% more with no rate change in their service. In the end, we drove more qualified leads whereas the media partner before drove more unqualified leads which hurt their sales and was more work for their sales team.
3. First-Party data
Understanding the shifts within the industry are critical to ensuring your marketing investment goes further. With the loss of third-party cookies in browsers and the loss of tracking on devices due to increasing privacy restrictions we understand the importance of first-party data. That is why we work very closely with our clients to ensure that they themselves have access to that data within their orga
nization and that the data is reliable. When done well, we can leverage this first-party data in a privacy-safe manner to inform our advertising targeting. This ensures that marketing dollars are spent wisely and efficiently.
4. Using accurate advertising targeting for your marketing campaigns is a science
It takes research, hypothesis testing, and data analysis to ensure that every cent of your marketing dollar is being spent wisely. You can’t just throw something out there and hope it sticks. To be successful in sharing your product / service with the world you need to do the work. But once you work through the process and find that ideal customer target, well, that’s when the real value of marketing comes to light.
If you have any questions about this blog post please reach out to us at firstname.lastname@example.org. Otherwise, stay tuned for Part 2 of our Value of Marketing blog series coming soon!