Segmentation and Target Marketing: Visualize the Data

Posted on August 17th, 2009 Adam Honig Comments 0

How do you visualize data? Photograph by Hamed Saber.

Do you need a “data visualization” tool to better segment customers and design more effective marketing campaigns?

For the marketing group at one of Innoveer’s clients, the answer was yes. In particular, it needed a better way to combine information on different groups of people, so it could empower its marketing department to create more effective customer segments and marketing campaigns.

Segmenting & Targeting 101

One bit of essential background information is that the company places all readers, on a per-publication basis, into one of several segments based on how frequently they consume the company’s products. The marketing team also tracks whether or not the publication has permission to contact them via email, phone, SMS or third parties. It uses third-party data to supplement and update this information, for example, to remove any deceased people from the contact list.

Overall, what the organization wants to do, continually, is increase sales, readership, and thus its advertising rates. Accordingly, its strategy is to try and advance people from one readership segment to the next.

To do all of those things, however, first the company needed to better understand its customers, and meet their expectations.

The Art of the “Special Offer”

Of course, newspapers and magazines have a well-known technique for obtaining more information about readers and subscribers. Namely, they use a mind-boggling array of offers and programs, including:

• book clubs
• discount electronics and jewelry
• DVD set or hard drive containing all past issues
• email newsletters and updates
• fantasy sports (soccer, football, cricket)
• free gifts
• loyalty clubs
• plants, fruits, vegetables and seeds by mail
• puzzle-solution hotlines
• vacation/holiday offers
• wine clubs

These programs exist to generate revenue or gather more information about readers—or ideally, both.

Know Your Customers

So, special offers bring in quite a lot of readership data, right?

Unfortunately, even though readership for the various publications can number in the millions, and hundreds of thousands of people may have responded to special offers, the company has detailed information on only 10 to 25 percent of the readership for any given publication. Partially, this is because so many people do not subscribe to the publication, but rather pick it up it at their local news agent or store which makes collecting information on these readers very challenging. Furthermore, the company estimates that there are twice as many readers as buyers.

Accordingly, the company must find better ways to take what it knows. To do that, it must sift through  data produced from its existing readership, as well as from third-party/partner channel offers and outreach. Then it needs to combine this information with data purchased from companies such as Axiom and Experian that sell information based on postal codes or actual addresses.

By properly analyzing all of this data, the organization can create better segments and run more precise marketing campaigns which are more efficient and effective. Efficient, because every type of outreach—even email—costs money. Effective, because a message that works well for one percent of readers will likely irritate the other 99 percent. Discretion and accuracy count. You don’t want to contact everyone on the subscriber list, or they’ll begin filtering your emails into their junk folder.

Data Visualization Provides New Insights

The problem was that the company lacked such insights. This made it difficult to design effective campaigns. Oftentimes, for example, the marketing team would commission a campaign from its third-party campaign management provider, using criteria they thought would produce perfect results, only to have it match but a handful of actual subscribers. This wasted time, effort and money.

The solution: visualize the data. After working with Innoveer, the company’s marketing team was able to use a desktop-based data visualization tool. Anytime they’re thinking about designing a campaign or just want to see how customers might fit together in random or unforeseen ways, they can us the tool to graphically drag criteria and group customers, to build campaigns as they go.

They might, for example, find that only five of their readers meet a certain criteria, but then if they take something out and add something else in, they may have 50,000 matches. That isn’t perfect—yet—but through this process, they can quickly get to the point where they have a viable new segment to target.

Results from Data Visualization

How has the data visualization tool helped?

Most importantly, people in the marketing department can now access subscriber data directly and are empowered to work with it themselves. That enables marketing teams to become more fluent in what marketing data exists, better understand what the team can do with it, and more quickly launch new campaigns.

Of course, once you begin gathering more information about readers, you can also build better segments. For example, create a campaign to entice readers of one publication, with a certain income, to subscribe to a corresponding publication. Or sell corkscrews to members of the wine club who have in the past purchased gifts from one or more publications. Or market foliage tours to people in a certain income bracket who have previously purchased both tour packages as well as garden products. It’s all about using better market intelligence to maximize cross-selling, increase subscriptions and build that bottom line.

How Innoveer Helped

Before you can put data visualization tools to work, you first typically need a company like Innoveer to help you implement the tool and align your processes, and ensure existing data is collected, organized and managed, so that the tool can function effectively. For example, for the publishing concern noted above, Innoveer helped the company clean and combine existing membership databases, move data into the new tool, implement dedicated campaign management software and bring that function in-house. Finally, Innoveer spent time training marketing personnel to use the new data visualization software.

Learn More

One prerequisite for creating more effective marketing campaigns is ensuring that marketing has equal access to customer management systems.

To create better customer segments, having dedicated campaign management tools is often essential. For more information, see our white paper for the high-technology industry (but broadly applicable to any industry), “Precision Marketing Leads to Higher Returns: Campaign Management for the High-Technology Industry.”

Finally, data visualization tools also pair quite well with analytics and BI software. See “Increased Business Intelligence: Turning Customer Data into a Competitive Advantage,” our white paper about how to build an effective BI program.