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For managers of financial services products such as home loans, credit cards and motor insurance, there is a constant pressure to meet sales targets while managing the high cost of customer acquisition.
DBM Managing Director Dhruba Gupta shares two fundamental things financial services marketers should know to quickly lower acquisition costs and improve marketing effectiveness.
Identify the right target market
Understanding the position of your brand in the market is the key to determining where it would be most profitable for you to focus. Typically, market segmentation studies are used for this purpose.
While segmentation has a range of applications, it is sometimes does not have sufficient precision to decide where and how to pitch specific products within your brand portfolio. Convertible Marketis a tool that addresses this issue.
The Convertible Market uses advanced modelling of longitudinal survey research data to identify customers who are most and least likely to buy a specific branded product. By comparing the attitudes, behaviours and socio-demographic profiles of a set of individuals over time, we can distinguish which characteristics actually lead to those individuals buying – or not buying – a branded product in the future (e.g. six months later).
Models that describe this causal relationship between customer characteristics and their actual future-observed behaviour can then be used to score people from most to least likely purchasers. The individuals in the top quintiles are classified as the convertible market. In our experience, based on these validated models, individuals in the Convertible Market are 4-5 times more likely to buy your branded product than the rest of the market.
Once the Convertible Market has been identified, it can be profiled to quantify the “size of the prize” to support the business case to invest marketing resources. The Convertible Market can also be tagged on customer databases and digital and traditional media platforms using propensity model-based algorithms.
Tagging is the most effective way to reach the audience that will buy your brand. Customers on your own CRM database will often have the highest conversion rate. To reach non-customers on social and search platforms that already use learnings from first-party or experimental data, the Convertible Market tagging can provide additional overlays to fine-tune media buying opportunities.
Developing targeted campaigns
Whilst it may sound obvious, in order to convey the right message to the Convertible Market, it’s critical to also have the right creative built on the right customer value proposition (CVP).
Specifically, the right CVP should be based on your relative brand strengths over your competitors on things that matter most to customers. You need this insight to be able to leverage your advantage. By understanding the needs and expectations of your Convertible Market, you can promote the product features, pricing, service delivery, brand attributes and channel performance that will most appeal to this audience.
This will enable you to hit your sales targets at a lower cost, and sooner, than your current efforts.
But where can you access these fundamental insights to accurately identify your Convertible Market?
DBM Launchpad delivers new opportunities for growing revenues among existing customers and prospects that don’t currently have a relationship with your brand. This program is based on cutting edge modelling powered by DBM Atlas, an award-winning database. DBM Atlas contains critical data on over 400,000 retail customers that explains which brands are winning and which are losing, and why people select particular branded products over others.
Launchpad helps to get some fundamental things right.
DBM Launchpad can be delivered in less than 3 weeks, so you can go-to-market fast.
Find out how you can secure the next win for your team. Get in touch with a DBM consultant today.
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