Technology for MSMEs: Every company already has a marketing strategy. Precision targeting doesn't replace a company's primary selling strategy; it augments the main plan.
- By Aditya Saxena
Technology for MSMEs: Precision targeting lets a company reach consumers at the very moment when they are most likely to be in need of a product or service. For instance, using precision targeting, a company may prompt a young unmarried man to buy flowers and chocolates as a particular date approaches. Similarly, a married couple may be prompted to buy a vacation as an anniversary draws near. While precision targeting is valuable to many industries, it is especially useful for startups and young companies. With precision targeting, startups and young companies can acquire customers at a significantly lower cost per acquisition.
What is precision targeting
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Precision targeting is the application of customer insights and data to the process of building tailor-made customer segments. The more the brand understand their customers, the more effectively they can address their needs. It is useful to cut the crowd and reach those who are likely to need a company’s product. For small firms with modest marketing budgets, precision targeting is an unbeatable value proposition.
Every company already has a marketing strategy. Precision targeting doesn’t replace a company’s primary selling strategy; it augments the main plan. Using precision targeting, firms can acquire new customers at a dramatically lower cost per acquisition. Furthermore, using precision targeting, firms can quickly discover which potential customers are likely to be the most profitable. This is achieved by identifying common attributes of existing high-value customers and then going out there to target personas tagged to similar attributes.
Who does precision targeting
While it may seem tempting to build in-house capabilities for precision targeting, there are several reasons why expert help is necessary for the program to be successful. Most importantly, businesses don’t have proprietary data handling software’s that makes it possible to segment and target customers. Firms that specialize in precision targeting spend considerable resources in developing and maintaining robust data handling software. Such sophisticated software makes it possible to target the right consumer at the right time.
Data drives precision targeting
People across the world spend an average of two hours online every day; many spend considerably more time. During this time, they chat with friends, watch videos, shop, and much more. While doing all this, they generate data. Using data, a firm can identify the kinds of products a consumer is likely to need. Such a firm that understands precision targeting, segments consumers based on life events. It can then precisely target consumers with advertisements for products. For instance, using data, a financial services startup can reach a consumer at the approximate time the latter needs an insurance policy with a more comprehensive cover.
The need for more significant protection may arise when there is a life event like an addition to a family. This may compel an individual to buy more cover. Using life events as a guide, firms can precisely target consumers when they are most in need of products or services. The enormous volumes of data footprint left online when crunched and looked at analytically can reveal a lot about lifestyles and behavioural attributes. These attributes can then be correlated to success/failure probability based on historical data.
Cost of customer acquisition is an important determinant of unit economics for a start-up or a young company. Precision targeting helps bring down the cost of acquisition by ensuring that the marketing dollars are spent where the mouth is i.e. to reach the prospects who are most likely to buy. Thus, it’s important to include precision targeting in a company’s marketing arsenal to ensure that the company can keep scaling profitably.
Aditya Saxena is the Senior Vice President APAC at iQUANTI. Views expressed are the author’s own.