How to run successful sales campaign to existing customers
According to Harvard Business Review, acquiring a new customer is somewhere from 5 to 25 times more expensive than retaining an existing one. Other study shows that returning customers spend more than 30% in comparison with new customers and are more willing to purchase new items from the offer. These statistics obviously show how high the potential of the selling products to existing customers is. In the article we will explain to you how to run a successful campaign for this group of customers.
First of all we need to select the target group for your campaign.
Let’s assume you are starting a promotional campaign. The goal is sell one of the products offered by your company. Let’s assume that you are running a hypermarket and the product for offer is children bicycle.
We need to determine to which of your customers to send the campaign. To all or not to all?
Let’s clarify, why sending the campaign to all the customers is not worth it.
1. The cost of a campaign could be high.
If you use e-mails it is the cost of the service for e-mail sending plus the cost of consultants from call centers or info centers who will be explaining the details to the recipients if any questions appears. If the campaign is offline – it is the cost of printing leaflets.
2. Part of customers will be dissatisfied.
It is happening when the offer is addressed to the audience, which is not interested and sometimes never will not be interested in the product. For example if you sent the discussed promotion to the individuals without children. These customers could be upset and, in the long term, it could lead to their churn. And, of course, this kind of mass campaigns promotions to all the customers will not let you build a good relationships with you customers and could even be a reason for discussing the company with the wrong side. We all know that dissatisfied customers tell about their experienced to 10 and more of their contacts.
3. Inadequate response to your next campaign.
Clients who are bombarded with campaigns they are not interested in very soon will stop reading or, even worst, block your e-mails or sms. And when the next campaign ideally match clients expectations, he will not pay attention to is assuming that it is spam again.
…Clients who are bombarded with campaigns they are not interested in very soon will stop reading or, even worst, block your e-mails or sms. And when the next campaign ideally match clients expectations, he will not pay attention to is assuming that it is spam again.
Now we clearly see that campaigns should be addressed to those clients who are likely to buy the product. But how to determine those clients for whom the campaign will be interested?
There are 3 ways:
1) Use your marketing intuition
2) Make customers segmentation based on your future needs and campaigns
3) Use predictive analytics
The 2nd and the 3rd options definitely will be more efficient. Moreover, if you have no experience in it we will gladly help. With our assistance, segmentation and using predictive analytics will not be complicated.
Let’s dig more deeper in each option.
Segmentation. It can help split your client’s on segments base on their profile. Quantity and characteristics of segments depends on business needs and business intentions. For example, there could be segments, which are responsible for family status of the clients. For example, there are or there are no children. Based on this segmentation the discussed promotion should be only send to the segment, which has children.
Segmentation could significantly improve the effectiveness and response to the campaigns, but there are more improvements for the efficiency increase. To predict which clients will be most interested in the offer, you should use data, which describe not only your clients but their behavior and the results of previous campaigns regarding the product.
If there is no data on previous campaigns, we suggest to run a pilot campaign. It’s results will be the basis for predictive analysis.
…Segmentation could significantly improve the effectiveness and response to the campaigns, but there are more improvements for the efficiency increase. To predict which clients will be most interested in the offer, you should use data, which describe not only your clients but their behavior and the results of previous campaigns regarding the product.
Pilot campaigns. When you have the data from the pilot campaign, you can create the profile of the customer who has purchased the product. Is it a person from a city or town, a man or a woman; is it a person who spent more or less than 100 BYN per check…? To find the factors that influence the purchase is not always easy, especially when you have many data. It is difficult to choose from hundreds or even thousands of customers’ characteristics and their behavior those factors that are critical in the purchasing process.
We are looking for customers who are likely to buy a children bicycle. Based on pilot campaign we can evaluate response efficiency and determine what are the key characteristics, which influence the response. And the weight of this characteristics on clients decision.
And this is where predictive analytics is very useful. It is find the profile of the ideal customer for this special offer.
The predictive analysis will define the impact of the different levels of the given characteristics on the likelihood of purchasing a product. Most relevant characteristics for the purchase will be selected.
Based on all the selected characteristics there will be determined the probability percentage (0%-100%) for each client to buy.
Based on cost of making an incorrect decision and profits of making a good decision we will choose those customers, to whom the promotion should be sent.
Let’s sum up.
It is cheaper and effective to increase sales in existing clients than on new ones. But it is not worth to rely on your intuition. How client make decision for buying, what is important when making a choice etc is not easy to determine when you have hundreds and thousands of client’s characteristics. And it is where predictive analytics will help you a lot. Computers and analytical tools will find the right decision more quickly and in a better way. And all these decisions will help to gain more trustful relations with you clients.