Bigger is not better. Smaller marketing budgets can only be stretched
so far before the impact on individual prospects reached reduces the bang
for a buck to an inaudible pop. For marketers with A&P budgets under $24,000,000
it's better to focus limited resources on a series of micro marketing
plans customized to appeal to the needs, belief systems and usage patterns
of the 20% of users that deliver 80% of volume.
Relevancy Marketing is a high leverage micro marketing tool that makes
every dime in the marketing budget dance like a quarter. It's a matter
of third grade arithmetic. In the classic 80/20 relationship each heavy
user contributes sixteen times the volume of moderate or lightweight users.
Clusters of heavy users with homogeneous characteristics that differentiate
them from other heavy user clusters can be found in concentrations nine
times greater than the normal population distribution. The impact of narrowly
targeted marketing and communication efforts custom designed to deliver
a relevant product positioning to heavy user clusters can easily double
the impact on trial purchase. And generating high volume repeat from a
heavy user cluster is a pre-programmed slam-dunk.
Run the numbers and it all adds up to a series of inexpensive micro marketing
plans -- costs range $500,000 to $2,500,000 -- that often project a six
month pay-out of the incremental marketing investment. Which typically
is considerably less than half the time required by conventional marketing
Relevancy Marketing is a segmentation-driven procedure that focuses the
least productive increments of the budget on different -- but internally
homogeneous -- clusters of users within the heavy-user segment of the
population. Narrow-target media, marketing events and promotional efforts
provide effective levels of reach and frequency against each targeted
cluster. Cluster-customized marketing programs then communicate a uniquely
relevant brand positioning that significantly increases the persuasive
impact of each brand exposure. Net/net: max impact. Minimal waste.
The incremental costs of 3-4 micro marketing options are estimated. Dollar
contribution to sales of candidate plans is calculated and projected payback
of each program is determined. Prioritized. And ultimately managers choose
the individual plans in which to invest the available marketing budget.
Programs are freestanding and can be deployed in parallel or sequential
The tool is a four step process that revolves around efforts to fragment
the 20% of heavy brand users into distinctly different clusters of heavy
users who share common demographic, behavioral, attitudinal and lifestyle
characteristics. Having identified a variety of options, cluster-relevant
micro marketing plans are created for the clusters representing the highest
return on marketing investment.
- Direction Setting:
Generation of heavy user clusters and prioritization by potential sales
volume. A 200,000 consumer database makes it possible -- even for brands
with 1-2% market penetration or extended repurchase cycles -- to identify
dozens of different clusters containing concentrations of high volume
users. Although each cluster is internally homogeneous the group's shared
values and behavior patterns are very different from other clusters.
The size and unit consumption of clusters vary significantly and the
resultant calculation of potential volume contribution reflects both
- Plans Development:
Creation of individual micro plans. Not all candidate clusters can be
efficiently accessed by available media, marketing events and promotional
programs. Following preliminary efforts to explore access issues Ideation
Workshops -- in which the client participates -- create freestanding
micro plans custom-designed for the high volume clusters that can be
accessed. In broad-stroke generalities, workshop participants propose
programs utilizing narrow-focus media / copy, user-relevant marketing
events, targeted promotional programs and hi-leverage public relation
- Financial Analysis:
Recognition of program costs and projection of incremental sales & profit.
Polaris managers develop costs for 3-4 fully developed micro plans.
Typically the efficiency derived from high concentrations of hi-volume
targets and the modest costs of narrow focus marketing vehicles make
it possible to generate effective levels of reach / frequency and target
prospect exposures. Database information is then used to project the
probable impact of each micro marketing plan on incremental sales /
profit and prioritize the opportunities by time-to-payout.
- Plans Review &
Adoption: Managers review, revise and adopt the individual micro plans
regarded as most effective in achieving brand objectives. Micro plans
are added until the pre-determined budget is fully committed.
The tool has pumped new vitality into mature brands struggling to justify
limited marketing expenditures. Offered brands with 1-2% market penetration
and brands challenged by extended repeat purchase cycles the opportunity
to access and impact meaningful numbers of hi-volume target prospects.
Proving there is a flip side to every opportunity, the process also supplemented
$100,000,000+ marketing budgets for brewers anxious to get the biggest
bang for their buck.
Heublein Wines uncovered a four month payback for one of their fledgling
brands in the value varietal sector. Found new vitality for a budget-strapped
Blossom Hill. Purina's Hi-Pro flushed a 10% share increase from an unrecognized
cluster of hunters. The OTC sector adopted the tool to revitalize Vivarin
-- with a 35% increase across four key clusters. Other OTC efforts freshened
both Cloretsand Certs P&L. Miller invited Texans to a trans-Texas block
party sponsored by Lite and orchestrated by the micro marketing strategy.
The shindig reversed 6-7% regional volume declines and added 4.5% in the
Potential applications center on services and products whose success is
driven by a narrow cadre of users and limited by budget realities. The
definition includes E-Trade's affluent baby boomers. Autoweb.com's GenX
prospects or Armor All's grease-under-the-fingernails car buffs. Roundup's
suburban cowboys or Combat's besieged urbanites. Dreyer's Grand Lite's
hedonistic weight watchers. Oracle's Web-centric prospects. Drugstore.com,
Babycenter.com, CDnow.com and every other e-commerce venture hoping to
aggregate a community of frequent users from the diverse collection of
online users flooding into the web.
© 2002 Polaris Marketing All Rights Reserved