How to choose from different customer acquisition strategies?June 21, 2016
Customer acquisition is certainly the top marketing priority for most B2Cs companies and for that there are essentially two primary existing paths:
1. Broad market advertising: Newspaper/print advertising, radio, online banner ads, TV commercials …
2. Prospects List
While the first one is certainly an effective medium for awareness, it is untargeted and therefore has limited impact on lead generation and measurement of effectiveness remains difficult. Prospect lists tend to be very measurable regardless of the channel (or combination of channels) used; one can easily measure the direct impact of a list by correlating who was touched by a specific campaign and who responded*. In the US B2C marketing space there are mainly 3 different types of lists available:
1. Generic prospect list
Generic lists have the asset of a very large prospect pool. Indeed, the main vendors have more than 600 variables and at least 200 million individual records. B2C companies do not typically buy the full database, they instead select sub-groups in these large lists based on criteria that they consider important to identify their target market. Typically companies make a selection based on geography, age, and often several other criteria. Social media outlets such as Facebook or vendors like Groupon also offer similar approaches.
2. Coop lists
Coop lists have a different reach and a completely different approach. The coop approach provides B2C companies with very targeted lists from within the industry by selling customer lists of the competitors in exchange of your customer list being added to the pool of marketable names. This enables B2C companies to receive more specifically targeted names than generic prospect lists, but it also has disadvantages: the coverage is much smaller (a coop prospect pool is usually 10 time smaller than a generic prospect list), you receive targeted names but also give your customer names to competitors (therefore increasing churn), you will market your product to consumers who may be receiving similar offers from your competitors.
3. Targeted lists
Targeted lists are the best of both worlds. Generally these lists are based on one or more “generic prospect list,” but a deep-dive predictive analysis is added. This analysis is called look-alike modeling; essentially using mathematical techniques to build a profile of your customer base. Once the profile has been built, it can then be applied to non-customers to identify people who are not currently your customers but have the right profile to be your customer. Once the target market is defined, it is up to the business to define the best marketing message and channel to grow the customer base.
It is no secret that at Reach Analytics we are big fans of targeted lists. We believe that this is the most efficient way to identify your best marketing leads. Having said this, there is no doubt at it also depends on your products and your go-to-market strategy. Indeed if you are new to the market and you do not have existing customers then the best option is certainly to define your target market using generic prospect lists. If you have a product which is very differentiated and well positioned in terms of price of TCO then coop is certainly the best option as you will win more customers from competitors as they will steal from you. If you are in neither of these situations then we would argue that a targeted list has a very strong value proposition. All you have to decide is whether you want a fully custom approach, which is slightly more precise but a lot more time consuming and costly or if instead you would like to use a B2C predictive marketing cloud.
* We will not in this blog discuss about the various attribution techniques that are available, including the measurement of the indirect impact of lists.