Marketing 101: The List
“Marketing is designed to bring people into something.”
What is the tallest mountain in the world? Everest. What is the deepest ocean? The Marianas Trench. The fastest person? Usain Bolt. Greatest magician of all time? Houdini.
Now answer me this – the second tallest mountain? The second deepest ocean? The second fastest person? The second greatest magician?
Kudos if you got any of those right. Most people will miss all or most of the answers of the second place holders – except maybe Ken Jennings (holder of the longest winning streak on Jeopardy). We just don’t care. We know the best and after that we lose interest.
Much like the first place winners in those categories, there is a first place winner in marketing/advertising. It’s the “List.” The List is very simple – it is the list of people you are going to send your offer to. Doesn’t matter how you are advertising, direct mail, email, print ads in a magazine or ezine, Adwords, website, banners – doesn’t matter.
The List, or who you’re sending your offer to, is the most important aspect – period. In fact, it’s 10 times more important than the next most important element in marketing. 1,000 percent more important.
Get this wrong and you have an epic fail. Get some of the other things wrong and you maybe don’t do as well… but get this wrong and it will rip a hole in the fragment of time and destroy everything as we now know it.
Okay. Maybe not that bad… but close.
Let’s look at an example. Let’s say it’s your job to gain new customers for women’s cosmetics. You just learned that 90% of women use the same brand of cosmetics that they start with, through their entire life. So you want to catch them at the beginning of their first use of makeup.
This desire creates a universe of potential customers. Let’s define them.
First, they are female. If we send our offer to males, we waste our money. So we knock down our universe by 50%. That’s good! You want the most refined List as possible—save those marketing dollars that may otherwise get wasted. And I don’t like wasting my marketing dollars. Neither should you…
Second, you want to catch them when they first start using makeup. Age 13? (or whatever the starting age is when you’re reading this). Now you have an age range—more definition. The more definition, the better. That will cut out 75% of a list. Fine tuning is sweet. Third—Other demographics (just a fancy word for “things that define you”).
Any cultural aspects? Nationality? Race? Size? Taste? Hobbies? Title? Industry? What else defines your potential customer?
The more you can define or profile your actual customer, the more you will hit your target audience the least expensive way.
Let’s say our line of cosmetics is upscale. More refining our List. For sports enthusiasts. Whatever.
Define & Refine
In essence, you are defining the customer as, “the person that will buy my product!” The more you can accurately paint the picture of that customer, the more you can find the right List to go after. In our cosmetic scenario above, if we go after all women we will get some sales, but not as good a ROI as if we fine tune our list deeper.
Women between the age of 13-15 gives us a smaller list and therefore more targeted then just “women” or female category.
Adding a refinement of upscale may mean looking for a family income of greater than $150,000—further refining. Drill down to the perfect customer. And on it goes.
You want to refine it as far as legitimately possible. For some things, you can refine it down to a gnat’s eyelash (meaning very small) and the ROI of your list will be far greater. If I advertise my cosmetic to 10,000 women in general (no other refining other than “women”), I might only get a half percent response, or 50 sales. If I refine it closer to those that will fit my target audience—women between the age of 13-15 living in upscale locations, I should be able to get a higher percentage—let’s say 3-5% or greater—so 300-500 sales.
By the way, these percentages are different for different products, campaigns, etc. It’s typically a very low number—less than 5% – but the point is that if you refine your list to get it closer to your target audience, you should do significantly better than just a “shotgun” approach to your marketing effort. Results will vary. Law Five (chapter six) will take care of this—or at least help you understand it better.
Back to our cosmetic example.
I can now send out 10,000 advertisements/impressions to my refined demographic (women, age 13, living in upscale areas) to get 300-500 sales instead of 50 sales from my general universe (women only). So my cost is the same but my ROI is much better.
As a further example, if I send the advertisement to 10,000 people which included men at 50% of the universe, my sales would cut in half because half of them do not want my product—they cannot use it. Logical. Doing the math, you can see how defining your demographic can potentially give you (in the above scenario) a return on investment of 10 times! Your advertisement is the same, your offer is the same, everything else is the same—you simply did your homework first and defined your target audience. That saved you a boatload of cash and gave you a much better ROI.
Reflection & Action
Define your audience’s demographics—paint a detailed as possible picture of what your customer looks like demographically (or if you are just starting out what you think your customer will look like).
There is a time when you want to paint with broader strokes, and not only is it legitimate, but to not do it is foolish. If you don’t have any idea what your customer looks like—or who your best customer is—do a test to the wider target (all women in our example above). Bracket your campaign and keep 100% excellent records so the truth of the marketing will show itself. If you do a small test to a broad audience, the truth of who likes your product should become obvious and you can start refining your test and drilling down to the perfect, most cost effective demographic List.
Please take some serious time here. As I said in the beginning, get this wrong and it’s expensive. In order to accomplish the perfect list, you have to ask some great questions about defining that list.Next up: You need to learn to ask the one question that will save you 50- 80% (and possibly more) on your marketing expense.