Defining Your Target Market
One of the best ways to define and develop your target
market is through the use of a mailing list. If you already have some idea of
who your target might be, but are unsure how to proceed, then you can use a mailing
list to further refine your target audience for direct marketing. Here are a
number of ways to compile a mailing list, and how to use them effectively to
define your target audience:
How to create a mailing list
The easiest and most common way
to compile a mailing list is by capturing name and address information for
everyone who buys or shows interest in your product. If you sell by mail, then
this is not a problem, as you already have this information to hand. If you
don’t then you can find other ways to get the information from your customers.
You can ask customers who use your product or service if they would like to
sign up for special offers and information. You can also create a mailing by
placing a classified advert, and then take the details of the people who reply
to your advert.
Rent a mailing list
Of course, if your company is
just starting out, it may be hard to find people to include on your mailing
list. One way around this is to rent a mailing list. You can rent a mailing
list either by contacting a company, or by using a professional list broker
Any company that mails merchandise or information
to its customers will usually have a list manager, who handles inquiries and
orders for the mailing list. For example, if you know that young teenage girls
are the target audience for your product, then you can call up a teenage
magazine and rent their list directly. Another good source is local newsletters
or group membership lists, which are often more cost effective than renting
from larger companies.
If you are not sure who to call, or cannot find a
suitable company who will let you rent their list, then use a list broker. List
brokers know all the lists available and can advise you on what type of list
would be best for you. They can also create custom lists for you if you have
specific requirements. You can find brokers in the Yellow Pages under “Mailing
lists” and “Mailing Services,” and or in the classified sections of mail order
trade publications.
Mailing list costs
The cost of lists can vary, but a lot of companies
will let you sample a list before committing to purchase. Rental costs can
vary, but are usually reasonable. However, the lists that they send you are usually
for one use only, and they often put in a number of their own names to make
sure that you abide by this rule. You can get mailing lists on computer disks
or paper lists, depending on the company.
How many names?
Working out the number of names to use for a mailing
list can be tricky, and really depends on your business. A lot of experts
believe using less than 5,000 names for any business is not worthwhile, as the
cost per name is higher and the response will be low. However, it really does
depend on what you want to send out. Sometimes it is better to have a smaller
number of names, because if the response is higher than you imagined you would
have problems. Although getting a high response level might seem good, if you
cannot keep up with the responses then you will damage your reputation.
Response rates
The first mailing list you send out should be a
test to see if you have the right target audience. Rates are usually low, and
anything around 3% is very good. If you have anything lower than 1 or 2 percent,
then you know that something is wrong. Either the market is not right, or the
mailer you used was poor, or the prices you have offered are prohibitive.
Refining the list
Once
you have found a mailing list that works, then you can begin to refine the
list. Start by removing one key area at a time, until you can pinpoint the
demographic that wants your product the most, and who you want to market the
product for. Once you have done this, you can begin to carry out direct
marketing campaigns and market research on this defined group. If you use your mailing
list well, it can help you define your target market and so increase the
effectiveness of your marketing.