June 06, 2018

Customer Retention or Acquisition? Programmatic Direct Mail® Works for Both

Customer Retention and Acquisition One of the biggest challenges in digital marketing is grasping its abstract nature. If you have a brick-and-mortar business, you know who your regular customers are because you meet them face-to-face. You also know who your prospective customers are because they live in your community. Word-of-mouth brings them in one or two at a time or an ad in the local paper might create a brief flurry. Through this process, you learn firsthand what motivates new customers. That, in turn, gives you a clearer idea not only of how to reach more new customers but also how to turn those new customers into repeat customers. The process is organic and instinctual.

Digital changes the dynamic. It expands your prospective customer base to literally anybody in the world who has a device. And while that opens up fantastic possibilities — I can sell my warm, hand-knitted sweaters to people in Siberia! — it also tends to blur your notion of your customer base into an amorphous blob. You can’t always tell who is who so you end up speaking to longtime customers in the same tone you use when trying to reach those hypothetical sweater buyers shivering in Siberia. And that’s more likely to alienate your existing customers than to appeal to new ones. (If you’ve ever had iPhoto misidentify your grandmother as your cat when you update your catalog, you know the off-putting feeling of dealing with digital technology that clearly has no idea who you are.)

PebblePost’s Programmatic Direct Mail® can help solve this problem. But to get the most out of it, first you have to determine whether your goal is retention (upselling or cross-selling existing customers) or acquisition (reaching new customers). Each requires a distinct strategy.

Programmatic Direct Mail® for retention
The typical retention campaign is designed to cross-sell or upsell existing customers. If someone buys a kayak from your outdoor outfitting company, your next step is to offer them waterproof backpacks, car racks, storage straps, etc.

Not only does retention require a different strategy than acquisition, but in many cases, it also requires a different budget from a different department. But brands often end up with departments at cross purposes, siphoning money from each other’s budget to pursue well-intentioned strategies that may not meet expectations.

How so? Let’s look at that outdoor outfitter. They can digitally retarget everyone who has ever visited their site, whether it’s a devoted customer or a one-time tire kicker. So, one week they retarget the entire list with a display ad for their line of kayaks. The next week they retarget the same list with an upsell offer for those car racks.

Can you spot the inefficiency? Someone who just bought a kayak from you last week won’t respond well to an offer for a kayak this week (especially if it’s less expensive). On the other hand, sending an upsell or cross-sell offer to someone who has yet to buy the core product is simply a waste of money. If you don’t own a kayak (or a car), you’re not going to buy a car rack for a kayak.

The key to effective retargeting is to separate one-time buyers from loyalists. Most marketers simply don’t have the tools or information at their disposal — but rest assured, it can be done. How? Well, without giving away too much secret sauce, there are seriously positive benefits to negatively retargeting your existing customers.

Programmatic Direct Mail® for acquisition
Sure, every business wants new customers. The challenge is in determining the most effective ways to reach them. PebblePost’s Programmatic Direct Mail® avoids casting too wide a net. There’s no sense in pitching snowmobiles to people who live in Florida.

What are the positives of negative retargeting your customers as mentioned above? For one:  prospects. Weed out those loyal existing customers and you’re left with a true pool of potential buyers. It’s not magic exactly but sometimes it feels that way.

We start by analyzing the relevant digital signal: prospects who have visited your site but didn’t purchase anything. We then further analyze that pool to match the most likely prospects with a physical address. Why? For one thing, most purchasing decisions are still made at home after thoughtful consideration. They’re not made on the fly by a distracted person using a device.

Rather than retarget via display ads that could potentially annoy prospects to the point where they go away for good, PebblePost follows up with a relevant piece of Programmatic Direct Mail® that is far more likely to drive them forward to a purchasing decision. 

Next steps
The challenge with digital is that you often can’t tell whether you’ve spent too much money targeting the wrong customers. With Programmatic Direct Mail®, we’re better equipped to make an appropriate determination before you even start.

For the outfitter’s prospective new customers, for example, we might recommend sending Programmatic Direct Mail® to all those who visited the site within the last month but who have yet to purchase a kayak. If the goal is retention — to upsell an existing customer — we might recommend sending a multipanel Programmatic Direct Mail® piece that showcases all the fantastic accessories to anyone who bought a kayak in the last year.

And remember, that’s only the first fork you’ll encounter along your marketing journey. We call the next one “Always On” vs. “Pulse.” Stay tuned for our next installment. 

PebblePost Engineering
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