Would you want your brand message to be heard by 70% or 10% of any market? Most likely, you are eagerly answering “70%.” However, what if the 70% was mostly made up of an audience who have no interest in your product or no need for your service? And what if the 10% were potential customers who were searching for a business or product like yours to solve a problem of theirs? Suddenly, that 10% sounds like the better audience for your message to be heard.
Targeted marketing makes oversaturation a thing of the past, and your advertising budget can go directly to increasing your ROI and conversions, customizing an engaging message, and attracting the ideal audience that needs to be exposed to your advertising the most.
The Benefits of Targeted Marketing
Targeted marketing is all about focusing on consumers who are more likely to buy your product or service. It involves really understanding who your buyers are, what motivates them, and where you can find them. It also entails using the right media to deliver your message, with a more personalized approach.
For example, if you are a high-end chain restaurant brand that wants to target diners with above average spending power. Looking at previous research and customer information you narrow down this audience to families that own a home and have a household income of $100,000 or more. They are likely to live in certain zip codes, the decision makers are typically 40 to 60-year-olds, their children are either older (teenagers) or grown and out of the house, and they care about quality and customer service when it comes to dining out.
This persona is based on past engagement, interaction, and studies you have conducted. You know this type of customer is more qualified because you’ve used your sales data to identify who they are and you know that they reflect previous customers.
Targeted Marketing vs. Oversaturation
One of the key differences between targeted marketing and oversaturation is the ability to customize your message for different audiences. Unlike mass saturation, where the same message or offer applies to everyone, with targeted marketing you’re not guessing or throwing your message out there to see what works and what fails. There is less risk involved with a more targeted approach: while you want everyone to buy your product, the truth is that not everyone will. Instead, streamline your message and personalize it to the people who make up your ideal audience.
The guesswork and gamble is now reduced because you’ve segmented your audience. In other words, instead of inferring who a customer is or should be, there is high quality research data, including past analytics and behavior studies, that paint a clear picture of the right audience. This involves placing your current and potential customers into groups by metrics such as motivation, needs, locations, and demographics. Then, using that data, you can begin segmenting your message and/or offers.
It’s important to note, this does not mean you have to sacrifice reach when taking a targeted marketing approach. Many media options can allow for both, without having that “be everything to everyone” methodology.
For example, a large grocery store chain is looking to promote a new line of organic foods to their audience. Based on their market research, they have broken down their audience groups into young professionals with an income of $75,000+ and families with a combined household income of $100,000+. For the young professionals, the advertising message might be based on eating healthy and being environmentally and socially conscious. They find they don’t need to focus on discounts or pricing with this particular group. However, for the families, the message might incorporate the well-being of their children and the need for parents to keep their kids healthy and happy. Pricing and coupons matter and should be incorporated with this group.
When you have a targeted marketing strategy, you’ll find that you’re truly able to connect on a more customized, personal level with consumers, and therefore increase conversion rates and engagement.
Return on Investment
In addition, your business should also consider the overall cost compared to the ROI when allocating marketing budgets. With over saturation, you may be looking at big numbers on paper in terms of reach. And your budgeting price may even be lower than if you used targeting metrics, but the reality is that conversions do not happen as easily or as frequently as when you invest the time and dollars into targeting your message to the right audience. While your ad spend may be higher, your ROI ultimately will increase the more geo- or niched-targeted you get.
Putting Targeted Marketing to Work
When trying to understand if your marketing is effective, you must first look at what you are doing now. Ask yourself and your team if your advertising is not only reaching the right audience, but also conveying the right message to these unique consumers. Are you at risk for spreading yourself too thin? If so, consider why you should target your marketing. Not only can you utilize market segmentation to classify and differentiate your audience for the future, you can also build a strategy that reduces risk and increases the ROI of your allocated advertising efforts.