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 If you want to increase revenue
using direct mail, you have two options: sell more to the
customers you have, or find new customers and sell to
them. The tricky part is knowing how to do that.
I recommend that you start by segmenting your house list.
Dividing your customers into groups that share a common
interest helps you understand your customers better. Let
me illustrate.
Assume you are a business that manufactures and markets a
line of polo and golf shirts that businesses issue to
their staff as casual uniforms. You examine your house
list to find out who buys what, and when and how. You are
looking for patterns, trends and opportunities.
Gender
You discover that 75% of your customers buy shirts for
male staff only, even though you carry a line of women's
shirts. There may be an opportunity here. You may be able
to find customers in similar industries as your customers,
but in businesses that are operated by women and that have
female staff.
Industry
Looking at the SIC codes in your house file, you learn
that a large percentage of your clients are retailers.
This means you can look for other retailers in other
industry segments that may also be interested in your
product line.
Buying cycle
Another piece of data that you uncover is that a
sizeable segment of your customer base prefers to have
their shirts embroidered with their company logo or
slogan. What do these customers have in common besides
that? Are they in similar industries? Are they all
involved in the hospitality industry? You may spot a new
market for your products. Or find a way to up-sell existing
customers when they renew their orders.
Trends
You discover that one shirt is more popular this year
than it was last year. Is this a fad? A trend? Look
carefully and find out. Maybe you can capitalize on this
new development to grow your business with existing and
new customers.
Frequency
You also learn that many of your customers order their
shirts in the Spring. Is this because the weather is
growing warmer, because your Spring prices are always
lower, or because your clients must hire all new staff
each Spring? Each of these three reasons presents a
different opportunity.
Payment method
Your customer database also tells you that the most
popular payment method is check, followed by credit card
and cash. The most popular medium is your catalog,
followed by your website (although your website is growing
in popularity). Are there opportunities here for reducing
your promotional costs by moving your entire catalog
online? Or for sending promotions by email instead of
postal mail?
As you can see, the advantages of segmenting your customer
database are great.
* you get to understand your customers better
* you uncover opportunities for creating special offers
for unique segments of your list
* you discover trends that help you modify your product
line
* you gather the knowledge you need to make intelligent
decisions about which prospect lists to rent
* you discover potential markets that you had not even
considered before
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