Customizing to optimize on their promotion ROI?

Companies utilize a large percent of their expenditure on marketing, yet the question of an equal and profitable return has always been in debate.

Why don’t companies utilize their AVAILABLE data to target their audience? Why don’t companies use specialization as a target to generate better ROI? Why is AVAILABLE data wasted?

Supermarkets acquire details of their customers from the brand and volume of toothpaste purchased to the personal details. Using this data supermarkets can identify which product offering is to be promoted to which individual opposed to sending out a generic message to all the customers in the database.

Companies should analyze their data and cluster the consumers preference, the effective analysis of data would allow companies to assume a wide range of consumer preference which would assist them to identify what the consumer is more prone to buy. If a pizza delivery company sends recommendations based on a customized basis the meat eater would be more interested in promotions and discounts available for their taste rather than a cheese lover’s preference.

In comparison Amazon has mastered the arts of customization as its recommendations generate most of its profits, Amazon’s secret to its sales increase is its recommendations engine, it adds up to 35% of Amazons revenue, its recommendation engine is developed through a unique algorithm an item-to-item collaborative filtering, which scales to massive data sets and produces high-quality recommendations in real time. This system focuses on creating an effective way of facilitating a personal shopping experience for every single customer which enables Amazon to increase their sales rates as the average proportion of customers buying products increase.

The fact that local companies fail to recognize the importance of customizing their marketing strategies to best suit their customers is also a loss, as companies spend million to send out text messages apart from other methods of promotions, and the revenue generated falls short as the messages sent out fail to address the needs and interests of their consumers.

While SMS is a smaller portion on the promotional mix, customizing to different clusters of the customers can drive higher relevance and accelerated growth.