Precision Marketing
Encyclopedia
Precision Marketing is marketing
technique that suggests successful marketing is to retain, cross-selling
and upselling existing customers.
Precision marketing emphasizes relevance as part of the technique. To achieve relevance, Precision Marketing marketers solicit personal preferences directly from recipients. They also collect and analyze behavioral and transactional data.
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Zabin and Brebach (Zabin & Brebach 2004) portray the development of market segmentation. They describe the inception of the term in the 1950s and show that with time, increasingly more information was considered relevant for marketing purposes. Market segmentation evolved from simple demographics
in the 1950s to geodemographics and behavioral segmentation in the 1960s (the propensity to purchase) to psychographics data in the 1970s (personality and lifestyle), to customer loyalty and profitability in the 1990s and to economic data in current times. The conceptual evolution of market segmentation is the cornerstone of precision marketing. In precision marketing, segments could be defined as narrowly as follows: full time MBA students, married with young children, planning their next vacation.
The evolution of segmentation was supported by advancements in technology. The shift into digital enabled an easier capture and retention of data while increasingly efficient databases facilitated the usability of that data. Although advancements in technology were crucial to the type of market segmentation used in precision marketing, they were not the driving force behind it. Instead, customer demand and expectation, alongside the fierce competition, were the driving factors.
Learmer and Simmons (Learmer & Simmons, 2007) determine that American consumers are overwhelmed by an avalanche of over 3000 marketing messages daily
Marketing messages increasingly penetrate the private domain both in print (direct mail and telemarketing) and in digital (emails and mobile phone). As a result, customers are becoming less receptive to unsolicited marketing communication, specifically if it is irrelevant or impersonal. This is the context that gave rise to the practice of precision marketing
and Tesco
.
Marketing
Marketing is the process used to determine what products or services may be of interest to customers, and the strategy to use in sales, communications and business development. It generates the strategy that underlies sales techniques, business communication, and business developments...
technique that suggests successful marketing is to retain, cross-selling
Cross-selling
Cross-selling is the action or practice of selling among or between established clients, markets, traders, etc. or the action or practice of selling an additional product or service to an existing customer. This article deals exclusively with the latter meaning. In practice, businesses define...
and upselling existing customers.
Precision marketing emphasizes relevance as part of the technique. To achieve relevance, Precision Marketing marketers solicit personal preferences directly from recipients. They also collect and analyze behavioral and transactional data.
Development
The development of precision marketing coincides with the development of market segmentation, advancements in technology and the customer's reaction to the proliferation of mass marketingMass marketing
Mass marketing is a market coverage strategy in which a firm decides to ignore market segment differences and go after the whole market with one offer. It is type of marketing of a product to a wide audience. The idea is to broadcast a message that will reach the largest number of people possible...
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Zabin and Brebach (Zabin & Brebach 2004) portray the development of market segmentation. They describe the inception of the term in the 1950s and show that with time, increasingly more information was considered relevant for marketing purposes. Market segmentation evolved from simple demographics
Demographics
Demographics are the most recent statistical characteristics of a population. These types of data are used widely in sociology , public policy, and marketing. Commonly examined demographics include gender, race, age, disabilities, mobility, home ownership, employment status, and even location...
in the 1950s to geodemographics and behavioral segmentation in the 1960s (the propensity to purchase) to psychographics data in the 1970s (personality and lifestyle), to customer loyalty and profitability in the 1990s and to economic data in current times. The conceptual evolution of market segmentation is the cornerstone of precision marketing. In precision marketing, segments could be defined as narrowly as follows: full time MBA students, married with young children, planning their next vacation.
The evolution of segmentation was supported by advancements in technology. The shift into digital enabled an easier capture and retention of data while increasingly efficient databases facilitated the usability of that data. Although advancements in technology were crucial to the type of market segmentation used in precision marketing, they were not the driving force behind it. Instead, customer demand and expectation, alongside the fierce competition, were the driving factors.
Learmer and Simmons (Learmer & Simmons, 2007) determine that American consumers are overwhelmed by an avalanche of over 3000 marketing messages daily
Marketing messages increasingly penetrate the private domain both in print (direct mail and telemarketing) and in digital (emails and mobile phone). As a result, customers are becoming less receptive to unsolicited marketing communication, specifically if it is irrelevant or impersonal. This is the context that gave rise to the practice of precision marketing
Application
The most common applications of precision marketing are in customer retention and revitalization. Here are a few examples for precision marketing tactics that have been used by several major companies, such Best WesternBest Western
Best Western International, Inc. is the third largest hotel chain, with over 4,195 hotels in nearly 80 countries. The chain, with its corporate headquarters in Phoenix, Arizona, operates more than 2,000 hotels in North America alone. Best Western has a marketing program involving placement of free...
and Tesco
Tesco
Tesco plc is a global grocery and general merchandise retailer headquartered in Cheshunt, United Kingdom. It is the third-largest retailer in the world measured by revenues and the second-largest measured by profits...
.