What’s in a Name? Part Two: Prospect Names
Chuck Romans, Senior Consultant to MDR — Friday, June 17, 2011
As I mentioned in my last article, What’s in a Name? Part One: The Customer, all customer names are important—although not necessarily equal. What about prospect names? Are there really major differences in prospect names? The short answer is “yes.” Targeting the right prospects can make the difference between a successful, profitable marketing campaign and a disastrous outcome.
One of the primary objectives of marketers is to determine or improve the profitability of prospecting. It costs significantly more to acquire a new customer than to keep an existing customer, and marketers have a limited budget. Education marketers are no exception.
There’re many approaches to determining the best prospects. Some marketers do it by their knowledge of the market and their prospects. Others spend a lot of resources on complex statistical models that rank prospects for their propensity to respond. Where do you start?
There’re a number of database marketing techniques that can be employed to target more responsive, profitable prospects and eliminate those that are less responsive. In the education market, we can look at prospects from a couple of aspects—where they are and who they are. Let’s review the “where” first.
Finding responsive prospects starts by using your customer file and some simple database marketing techniques to rank the education universe from the most to least responsive.
- Customer Institutions: Prospects in customer schools and districts are often the most responsive prospect names in any email or direct mail campaign. As a general group, these names will outperform other prospects by a considerable margin.
- Prospect Institutions in Buying Districts: These are schools that haven’t purchased but reside in a school district where other schools have purchased your product. Prospect names in this segment can be very profitable for marketers of classroom products, professional services, professional development books, or any company that sells at the school level and has multiple customer schools in a district. Educators typically share curriculum ideas, products that they use, and names of vendors of choice. Educators also tend to move within district boundaries so there’re likely former customers in these schools. Timely email and direct mail campaigns to this segment can be very effective.
- Prospect Institutions in Non-Buying Districts: These are schools that haven’t purchased and reside in districts where no other school has purchased. Prospect names in this segment have the lowest potential and will be the least responsive. Finding responsive names in this segment can be challenging. One way is to use the profile characteristics of the customer schools and select schools in this segment that have similar characteristics. Also using less costly marketing touches, such as email or postcards for prospect names, in this segment can help with the ROI.
Even within these three segments not all prospect names are equal. Some names will be more responsive than others. You can identify those names by some of their key demographics and behaviors.
- New Teachers and Administrators: These prospect names are often much more responsive as a group than other names. This segment can also be broken down by new to the profession (one or two years as an educator) and new to the institution but not necessarily to education. Depending on the product or service, new names can be highly profitable and more responsive than other names. Plus, if you can establish a relationship early in an educator’s career, the lifetime value can be very significant.
- Direct Response Names or Buyers: These are names of educators who’ve responded to email or direct mail offers but whose name doesn’t appear on your customer database. They’ve purchased from other education marketers or even competitors. These names tend to be more responsive in all segments, but they’re particularly responsive within the customer institutions segment. Even as responsive as these names are, there are groups of prospect names within the buyer group that are even more responsive. For example, buyers can be selected by recency of purchase, multibuyers, and other buyer selects (such as type of product purchased, which may be applicable for certain companies). Recency of purchase and multiple purchases can be a very powerful attribute to identify the most responsive prospect names.
- Qualified Inquiries: These are educators who’ve expressed an interest in your product but have not purchased. Age and the source of the inquiry name are key attributes that will determine if a name is any more likely to respond than another name. You need to ask yourself if an educator fills in their name and address at a convention drawing, are they really interested in your product or just in winning the item? Also, if an inquiry has been added more than 18 months ago, are they still more valuable than other names?
A qualified inquiry is a name of someone who has inquired about a specific product. For example, someone that filled in a landing page is a qualified inquiry. An educator that “clicks” on a link is a lead and is a better prospect than other names are just leads at that point. The other names that you may have compiled from conventions and other sources are just leads.
Even among the pool of qualified inquiries, there’re more responsive segments that can be predictive. Recent inquiries almost always outperform other inquiries who may have expressed an interest in the previous school year. Often an inquiry about a product or product line is in response to an immediate need, so the older the inquiry, the higher likelihood that the need has been satisfied. Older inquiry names will not respond any differently than other educators.
Lastly, the overall quality and the demographics available are key determinates to the value of a prospect name:
“It is not enough to use great care in the selection of names and in the building of the mailing list. Continual vigilance must be exercised.”
Names: The Key to Sales © 1932
This is as even more true today as it was in 1932 because of the dramatic increase in change and technology. The mobility of educators is increasing at a surprising rate. This mobility can be within the school or district or from one coast to another. There’s been a tremendous amount of change in the 2010-2011 school year, and there’s likely to be more in the next school year.
Regardless of segment, demographic, or purchasing history, in order for a prospect to respond to your offer, your source for email and direct mail data must be sure that the prospect names are active at the school and have the correct title. As you can see by the numbers in the chart above, “continual vigilance” is absolutely critical to maintaining a prospect database. Plus, it’s important that demographics are available to help you target to the prospects that fit your target audience.
So when selecting the source of your prospect email and direct mail names, be sure that they’re vigilant in keeping abreast of the changes in the education marketplace and providing the key demographics for targeting.
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Chuck has over 25 years of database marketing experience in the education marketplace and was MDR’s Vice President of Product Development, responsible for planning and development of MDR’s comprehensive product suite, including list solutions, e-marketing solutions, and sales solutions until his retirement in May 2011. He continues to work with MDR customers in a consultant role. Chuck has launched many innovative and leading-edge products—Education MarketView; Buyers at School response files; the Educators at Home database; and industry-leading analytical products, including development of sophisticated predictive indicators using database mining and modeling techniques. Chuck’s experience in customer database management has proved valuable in assisting many education marketers in leveraging their customer information to develop marketing strategies for increased profitability.
Prior to joining MDR, Chuck managed direct marketing initiatives at McGraw-Hill’s American School Publishers; the Random House School Division; and Educational Dimensions Group, a leading instructional video publisher.