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Kris Vranken - 23.10.2024
Achieving return on investment is more important than ever. In marketing, the secret lies not only in finding the right channel, but more importantly in understanding the value of your customers and how different communication channels respond to them.
However, many companies fail to set up effective customer value segmentation and update it regularly. This means they miss valuable opportunities to target customers in a more targeted and effective way.
We also see many marketers deploying various channels across their entire customer base without distinguishing between different customer segments.
As a result, the efficiency and impact of certain channels is completely lost because they are not optimally aligned with customer value.
At Stratics, we continuously track hundreds of KPIs on performance, sales, campaigns and customer behavior.
These insights form the basis of our strategies to maximize the return on marketing efforts and choose the right channels.
For years, we have been measuring how the same message performs across different communication channels. This has given us valuable insights into what works and what doesn't. Below we share some of our most interesting findings.
Our ongoing analyses consistently show that customer segmentation is the key to using marketing budgets efficiently. By segmenting your customers based on Customer Value (CV) and Propensity to Buy - a measure of their potential and value to your business - you can communicate much more profitably. This leads not only to higher customer satisfaction, but also to better results for your marketing efforts.
It is essential to realize that not every communication channel is equally effective for every customer group. Through our ongoing measurement and testing of campaigns through Direct Mail (DM), SMS e-mail, ... we have learned that the impact varies greatly by customer segment and channel.
Our studies show that Direct Mail by mail, although it has a relatively high cost per action sent, performs exceptionally well for customers with high Customer Value. This channel has a high conversion rate with premium customers, but its effectiveness drops significantly when used for lower value customers. Thus, Direct Mail is a powerful tool for targeting your best customers, but ineffective for wider audiences.
With SMS , we see a different pattern. SMS has a more consistent conversion rate and can be profitable for a wider audience. It has a lower return per customer than Direct Mail for the top customers, but remains effective for a larger portion of the customer base. This makes SMS an interesting choice for a medium-sized group of customers with average Customer Value.
Email appears to be the most cost-effective for the masses in our studies. Although the average revenue per customer is lower than Direct Mail or SMS, email has been found to be consistently effective for a large proportion of customers, up to 80% of the customer base. This makes e-mail an excellent choice for large-scale campaigns where cost efficiency and reach are important.
What these results show us is that there is no one-size-fits-all approach to marketing communications. The power of optichannel marketing lies in smartly segmenting your customers and optimally deploying the right channels for each segment. At Stratics, we use advanced AI models and machine learning algorithms to do this, which continuously calculate the Customer Value of customers. These insights help us make real-time decisions about which customers should receive which type of communication.
Thanks to this technology, we can not only optimize the ROI of each campaign, but also increase customer satisfaction through personalized, relevant communication. By targeting customers in the right way, companies can significantly improve their ROI.
If your marketing strategy is not yet based on detailed customer segmentation and data-driven insights, you are probably missing out on opportunities. With the growth of available technologies such as AI and machine learning, now is the time to harness these innovations. At Stratics, we can help you gain insights into your customer database, and through our ongoing monitoring and testing, we ensure that your marketing actions are maximizing returns.
Want to know how Stratics can help you with customer segmentation and optimizing your campaigns?
Contact us today for a no-obligation consultation!