Relevancy Marketing

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 plans.

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 series.

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 considerations.

  • 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 programs.

  • 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 following year.

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.'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.,, 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.

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