Stop Wasting Your Marketing Budget: Using Consumer Buying Behavior to Increase Marketing ROI
Any effective marketing campaign requires all the right stars to align: message, market and moment. In order for a campaign to succeed today, marketers must transcend the tradition of mass emailing target demographics and delve deeper into analyzing consumer behavior. According to the blog that cites this 2014 study by the American Marketing Association and Duke University, marketing companies spend roughly 10 percent of their revenue on marketing. For some companies, 10 percent can be the equivalent of millions of dollars each year spent trying to maximize marketing return on investment (ROI). But how much of that money is being wasted on customers who may fit the target demographic but are unlikely to buy at the time of the campaign?
A new level of market segmentation
Generally, providers want to be able to predict which of their customers will be active on a revolving account in the next 12 months. This allows providers to focus their offers and marketing spend on specific customers, and include the right marketing messages. One study recently completed by Equifax shows how a credit card provider could better identify consumers who are ready to buy.
In order to obtain this level of market segmentation, you need insight into more than just standard marketing demographics. You should also consider individual consumer behavior and credit information, including customer spending habits, scheduled payments, past due amounts, payment dates and other factors that can significantly impact cash flow.
Equifax Dimensions™ combined with Advanced Decisioning Attributes may be the answer. Together these Equifax solutions provided the client with the trended consumer credit data and deep insight into consumer buying behavior. As a result, the client was able to better predict which of its customers would be most likely to utilize their revolving account in the next 12 months.
Results in revolving account predictions
The study showed a 21 percent incremental lift in the ability to predict customer’s revolving account use. This significant improvement can enhance a credit card provider’s ability to make insight-driven offers and create more compelling, revenue-driving campaigns. Armed with this knowledge, the credit card company can reduce marketing costs, increase revenue, confidentily assign credit limits and strategically prioritize and segment marketable populations. These results are specific to this one company, however, results will vary on a case-by-case basis.
As the adage goes, “you have to spend money to make money,” but that doesn’t mean you should do it blindly. With increased insight into customer behavior through Equifax Dimensions and the power of advanced analytics, you can tailor your strategies and make the most your marketing spend.
Image Source: Big Stock
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