(1) Manage your moneyThe first step, naturally, is to establish what your budget should be. Here, restraint is generally preferable to largesse. The advent of big data has led some companies to believe that, when it comes to information gathering and analysis, “more” is always better. This is a mistake – and one that often leaves advertising departments out of pocket. You could certainly invest your entire budget in creating data lakes, implementing data management platforms and programmatic algorithms, but it’s a lot of money to spend on something with no real assurance that the results will be relevant to your company’s needs. Insight projects are often cheaper, and will generally allow you to put the information you’ve already gathered to good use. Analysing conversions and click through rates will give you a better idea of meaningful correlations and behavioural patterns – allowing you to improve your targeting, segment your end-users properly, and boost your profits without draining your internal resources. (2) Segmentation of your digital ad spend Maybe, as the cliché goes, the customer is “always right”. That doesn’t mean they’re always valuable. If they’re big users of your customer support services, they may well cost you more in man-hours than they paid for the product or service in the first place. If they’re returning products or demanding refunds on a regular basis, they’re also a net loss to your business. While we often talk about data segmentation in terms of attraction and retention, it can also be used to identify the less desirable customers. Only when you filter out these less profitable prospects can you focus on the ones that matter.
(3) Retain and gainBusinesses of all sizes tend to focus on customer acquisition, but research has demonstrated that improving retention rates by five per cent can increase profits by up to 95 per cent. The customers who already know who you are need to be persuaded to hang around: if you neglect them to focus on new business, it’ll hurt your revenues in the short and long term. If any relationship gets boring or one-sided, it tends to wither and die. Put a little spice back into your customer interactions from time to time: create advertising campaigns with personalised deals and offers to appeal to people who already know who you are and what you’re about. Remind them that you care about their custom and they’ll be more inclined to keep the relationship alive. Getting the most out of your ad spend – and, for that matter, your data – is more a matter of ‘how’ than ‘how much’. If you’re trying to generate more sales, it’s always better to make the most of the information you have than it is to gather data that you can’t actually use. Go deep, rather than wide. Embrace the data you already have. Your customer’s actions say more about them than any algorithm can tell you. Jason Lark is MD of Celerity. Image: Shutterstock
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