Marketers are unlikely to have the freedom they had pre-recession to spend their way out of poor performance. Pouring dollars into advertising, rarely increases profitability and sometimes it doesn't even boost sales. It certainly doesn't guarantee improvements in marketing effectiveness, ROI or operating profit margins.
To optimize the impact of a reduced budget, marketers must abandon the shotgun approach for more laser-like precision. That precision approach flows from accurate targeting. If you nail targeting, everything else will fall into place.
To get your retail marketing strategy centered to take advantage of the (albeit gradually) improving economy, you need to answer several key questions about your customers:
- Which customers and which segments of customers will be the most profitable to pursue?Study data such as current spending, lifetime value, number and types of products or services purchased, and brand-switching history/potential to assess total customer value
- Are your target customers open to your brand? They are open to considering and trying your brand if they're not already using it. They know your brand and have positive feelings about it. They are primed to buy if encouraged to do so. If not, don't waste valuable marketing dollars chasing them.
- Are they influencers? They will tell their friends about your brand and become brand evangelists helping spread the gospel about your retail store.
- Are they price sensitive? Customers that are less price sensitive, are likely to be more loyal to your retail brand and less apt to change - unless you mistreat them - and thus require less promotional investments targeted at them
- Do they desire and value the newest products? If they value bleeding edge styles, releases or are early adopters of technology, ensure you promote your newest offers to them to ensure they're loyalty - they value having the latest and greatest and appreciate your recognition of this value
Understanding which segments offer the most value for your marketing investments and then strategically designing marketing programs to meet those segments needs will go a long way to achieving the sales and profit objectives for your store. Strategies and tactics that many know but few have the focused discipline to execute. Think laser, think target, think precision, achieve your goals!