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Opening Doors Blog

How To Focus Your Marketing Budget

Wednesday, May 17, 2017


Not all customers are created equally.

No matter how advanced we get with technology, we’ll never be able to predict how much a specific customer will spend. However, there are ways to analyze existing data to help profile customers and determine where your marketing budget should be focused.

The fact remains, not all customers are equally profitable, nor do they all have the potential to become your most profitable customers. This is a fundamental tenet of marketing, which is why it’s critical to continuously improve the impact of every marketing dollar spent. 

By utilizing your database to communicate the right offer, to the right person, at the right time, you can effectively influence customer decisions. It all begins with segmenting customers to deliver the right message at the right time.

Your budget will likely dictate how sophisticated you can be in your data segmentation. The three most basic forms of data segmentation are:

1) Demographic – Age, Income, Net Worth

2) Attitudinal – Psychographic, Clusters

3) Behavior – Lifestyle, Buying History

Once you’ve developed your segmentation, RFM analysis, and cluster analysis, predictive modeling can be used to measure and identify segments with the most relevance.

RFM looks at customer history to determine recency, frequency, and monetary value.  Customers are then scored and a contact strategy can be developed.

A cluster analysis can assist you in developing “clusters” or groups of customers with similar characteristics, but who are different from members of other clusters. By differentiating, messaging strategies can be better developed.

Lastly, predictive modeling identifies multiple variables that may or may not relate to buying behavior. Variables are fed into a statistical program and the output provides a score for every record. When compiled correctly, this is a powerful tool that can improve customer acquisition and decrease customer attrition. 

In the end, knowing your customer can be a critical aspect to developing a loyal base from which your business can grow.


Joe Contrino is CEO of The Contrino Group, a direct marketing agency located in Lafayette, CO.

Joe is an award winning direct marketer with over 32 of years of experience.   Prior to founding The Contrino Group, Joe was a Senior Partner at Suite 700 Direct, Integrated Marketing Solutions Manager at Henry Wurst, Inc., and CEO and owner of Contrino Direct Marketing, Boulder, CO.

Joe is a Direct Marketing Association Certified Direct Marketer Professional, Industry Co-Chair of the Denver Postal Customer Council Board of Directors, and speaks regionally and nationally on direct marketing topics and trends.



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