Segmentation increases eMarketing response rates
Selling to existing customers is without doubt the most cost-effective sales activity.
By comparison, cross-selling (i.e. selling related products to existing customers) requires typically three
times as much resource (time, budget, staff hours).
The costs of acquiring new customers however, can be as much as seven times as high as selling to existing
customers.
Why segmentation?
Because not all customers are equal.
Just 2% of customers - the Key Accounts - typically generate 18% of all profits. The next 18% of customers
- Major Accounts - typically generate 62% of all profits.The 65% of customers who make up the mass market
of Normal Customers generate typically 20% of all profits. The last group - representing as much
as 15% of customers - may generate next to no profits at all.
That being so, the best – and most cost-effective - opportunities for continued sales growth are:
1. growing Major Accounts into Key Accounts
2. growing Normal Customers into Major Accounts
3. avoiding sales to customers who generate zero profits
Accurate customer segmentation, combined with targeted eMarketing communication results in:
• A style of comunication that is optimised for the customer segment
• Offers that have greater relevance for the target group
• Higher response rates for each target group
• Higher total response rates across all eMarketing campaigns.
Wait a moment ...
Smaller target groups result in higher response rates? How can that possibly be?
It may sound counter-intuitive, but it’s true.
Click here to read the article on "List sizes" and see for yourself.
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Customers
Organisations that we have supported with our eMarketing experience and insights include:
Deutsche Investment Trust, Dun & Bradstreet Germany, Field Fisher Waterhouse, Miltenyi Biotech, Pivotal Corporation, SAP AG.
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