List Acquisition 101 - Which List is Right for Your Business?

As business owners and marketers look to grow their businesses, one thing we all do is search for ways to grow our customer base. After all, a strong loyalty program does have limits. Even your most loyal customers have a natural limit to what they can buy.

List. Flickr user Ex-Smith.

Thus begins the search for new customers. You can find new customers in a lot of different ways – advertising, social marketing, word of mouth, and list acquisition.

List acquisition happens when you rent a list of people and market to them. Those that respond to your marketing become members of your own house file. The ones who don’t respond can’t be marketed to past the terms of your list rental agreement, which may be for single or multi-use.

As a general rule, you can rent lists of people two ways –by demographics or affiliation. You can even combine the two. Here’s how it works:  

• By Demographics – you can choose the age, income, net worth gender, location, interests, and a number of lifestyle and buying habits. Do you want homeowners or renters? Parents or non-parents? People with pets?
• By Affiliation – you can also choose from a wide range of memberships and magazine subscriptions. Do you want members of AARP? People who subscribe to Cat Fancy? Graduates of certain colleges? Members of teachers’ unions?
• Both – Work with a reputable list broker and they will be able to provide you with, for example, Cat Fancy subscribers between the age of 25 – 45 who live on the Eastern Seaboard and make more than $40,000 a year.  

What’s the difference between mailing lists and email lists?

With mailing lists, for the most part, you’ll be able to bring the names into your database and use them for the rental period as you see fit, per the terms of your rental agreement. This gives you the opportunity to send a series of promotions. Anyone who responds remains on your list after the rental period is over, even if they don’t buy.

Email lists are, in general one-time or one-campaign use, and you don’t get to send the email from your desk – the list rental company or list owner does that – you provide the creative content. Again, anyone who responds and opts in joins your house file.  

What about those coupon sites?

I have posted on this blog before about my wariness of coupon sites– after all, we all have to deeply discount our product and the customers get more and more loyal to the coupon brand – Groupon, LivingSocial, or whichever - rather than our own brand.

HOWEVER, it’s worth investigating how much this might cost –the contract with the coupon site, your discount, costs of doing business, AGAINST the costs of a traditional email list rental campaign. After all, the coupon sites’ customers are loyal to that site and thus likely to open the email with your deal. Those who sign up for the deal become your customers. Depending on your business and your offer, you may garner more customers this way.

Do the math, before you do anything else. If numbers aren’t your thing, it’s worth paying your accountant for an hour of her time to show you what’s what.

How are you building your list? Please share in the comments.

Related Posts
Secret Trade Secrets to Defining Your Audience
Group Discount Sites - My Two Cents

Your 2012 Strategy - Understanding Your Customer Data

Last week, I kicked off 2012 planning with a some notes on crafting your marketing framework around your overall business goals.

Data Disks. From Flickr user Emilian Robert Vicol.

This week, I want to have a bit of a chat with you about your customer data.

What do you know about your customers and how can you put that to use?

Here are a few basics to consider:

1) Geographic location - provide customers special deals based on the closest store location, on the season it is where they live, on the local sports team, or on common leisure activities in their part of the country. A strong local marketing strategy should be a key driver for your business.

2) Demographics - like age, income, net worth, and education - While lifestage is a stronger marketing metric, you can still tune the language and the imagery you use based on these kinds of metrics. Also, knowing the typical demographic of your customer is critical when you're considering where to advertise and how to price new products.

3) Purchasing behavior - this is really the strongest data you have. People's past behavior is the strongest indicator of future behavior. Important points to consider:

• Frequency - how often each customer buys
• Recency - when the most recent purchase was made
• Method of purchase - at the store, online on a computer, or online via a tablet or other mobile device
• Source of purchase - referred by another customer, responded to your catalog, clicked on an email, web search, responded to an ad, or direct visit to your web site

Once you understand purchasing behavior, you'll be able to group your customers by behavior and market accordingly - sending emails more often to email customers, turning up ads from places where customers are responding, and tuning your search marketing based on the keywords that are working for you.

Data is your most powerful marketing tool. If you're not using it, you're marketing with the lights off.

Need to turn off the dark? Let me know, I can help you make the most out of your data.

Age vs Stage - What's More Important?

You probably know that you have different types of customers, and that it makes sense to group them somehow. After all, segmenting your customers makes your marketing more efficient - you'll be able to customize your campaigns to work most efficiently for each group.

So what's more important, customer age or customer stage?
photo © 2010 Vivian Evans | more info (via: Wylio)

Well, customer age can be a useful measurement - after all, you're going to pitch your messaging differently if most of your customers are over 65 than if most of them are under 21. It's also great to know your customers' birthdays so you can send them special promotions.

But wouldn't it be more practical to know if, for example, your 35-year-old customer is...

...a new parent?
...a full-time college student?
...a newlywed?
...just started a new job?
...taking care of an elderly parent?
...CEO of a large company?
...recently retired?

Wouldn't it be much more useful to know this information, rather than the age of your customer?

This is why lifestage is so important. Understanding where your customers are right now will help you craft offerings that resonate far better than anything else you might try simply based on customer age.

So how you do you find out what lifestage people are in?

The best way is by far the simplest- just ask.

Are you in the stage of life where you need some marketing help? Let me know.

Related posts:
Email isn't Dead! Permission Based Marketing Works
Secret Trade Secrets on Defining Your Audience

Secret Trade Secrets on Defining Your Audience

So who's buying your product anyway?

The more you know about your customers, the better you can serve them and develop new products and services that fit their lives.

Who the heck are these people?

What kind of people visit your retail stores, purchase from your print catalogs, buy on your web site, or on their mobile phones?

How are marketers targeting people by income, age, house value, hobbies, magazine subscriptions, etc., etc., etc?


Let me tell you about the data overlay.


photo © 2010 Emilian Robert Vicol | more info (via: Wylio)

That's right. If you want to spend a little money (there's usually a fee per thousand records) and you have valid street addresses on your customer file, you can buy hundreds (even thousands) of data points on your customers. What kind of cars do they drive? How many children do they have? What type of home do they live in? How educated are they?


Understanding some key data points about your customers will help you to group them into buying segments.

Having all of this data enables you to profile people who behave in a certain way. Maybe most of your catalog customers are married men over the age of 55, and most of your mobile customers are single women aged 18 - 27. Perhaps the people who spend the most money with you per order are married female online customers aged 30 - 45 with a household income of $60,000 per year or more and a college education. Perhaps gardening hobbyists are attracted to your brand.

There are lots and lots of data points. What should you buy?
I recommend the following for most products:
Age
Gender
Household Income
Net Worth
Education
Presence of Children
Ages of Children

Then, it depends. If you're selling housewares, you'll want to know what types of homes people live in. After all, you don't want to send your outdoor furniture catalog to people who live in apartments. If you're selling pet-related products, then you'll want to buy data on pet ownership. Ditto for cars. If your product is related to a specific hobby (say gardening or travel), then you'll want to make sure you get your records flagged for customers with those interests.


How does it help?
Knowing more about your customers' basic demographic makeup helps you to craft products and messages that are tailored to their stage of life. It also helps you create groups of customer clones. In the example above, I mentioned that your most profitable customers might be educated, high-income, married females age 30 -45. Since you know that this type of person has potential to be extremely profitable for you, now you can start looking for places to find more people like this. By cultivating people who are a lot like your best customers, you're raising your chances of getting more good customers.


Where does this data come from?
There are several organizations that collect this data, most notably the three major credit agencies. They get it from warranty cards, survey responses, loan/purchasing behavior, and a number of other sources. If this gives you the heebie-jeebies, you can contact the Direct Marketing Association or sign up for OptOutPreScreen to protect your privacy.

Now what?
You can contact any one of several vendors who provide data overlay services, or contact me and I'll help you get started.