Targeted product and service promotion

With a new product or service on offer, who are the best customers to target?

The sales system offers huge potential. It contains the information you need to better understand purchasing behaviours: the who, when and what was purchased. This customer understanding will provide sound direction for marketing activities.

Finding the right customer

A client was promoting a new product that complimented their existing portfolio. They felt that their customers would be interested in the new product, they were right. However, for successful promotion they needed to identify the right customers to target.

The client has an established and successful business, with a good sales system. Their system contains customer details and when and what they purchased.

Using this sales information, we built customer segmentation to target the right customers with the right proposition. The segmentation provided customer insight:

• Categories of products purchased
• Demographics of customers
• Purchasing traits

The results provided the basis for targeted promotion of their new product.

Customer segmentation

Customer segmentation helps you recognise the needs of different customers. By grouping customers by these needs, each group can be addressed appropriately.

If you have an established business, you will have a sales system with customer and purchase details. This data provides a sound base for customer segmentation.

Using sales data, we are defining implied needs i.e. based on the products they purchase. Of course you could also conduct market research to add value to the segmentation.

The segmentation starts by identifying the commonality and differences between customers:

• Business or consumer demographics e.g. type of customer
• Products purchased
• Recency, frequency and value of purchases

These indicators are use to drive marketing activity and regularly refined to tune marketing strategy.

Considerations before implementation

Before undertaking customer segmentation there are a few things to consider:

• What demographic information is available?
• How are customers and products defined within your sales system?

To understand how to develop customer segmentation, view our free guide to customer segmentation.