It’s not the size of the data…
If you’re trying to catch a lot of fish, which is better: one fishing line or a net?
When there’s a missing person, does one person go out looking for them? No. It’s a group, often arm-in-arm, covering every square inch of the search area.
Archaeologists looking for lost antiquities cover large swaths of land using a grid so they can dig methodically.
But marketing? That’s laser-focused. No shotguns here! Only finely tuned rifles, loaded with the best data out there.
That’s certainly what we’ve convinced ourselves we need.
Overtargeting and Overmissing
Let’s look at a simple scenario. Your bank needs to add new checking accounts. You hope to add clients with high deposit amounts. So, which is better:
- A. Buy 100 highly targeted leads for $75 each?
- B. Buy 10,000 less-targeted leads for 7.5 cents each?
Scenario A is not outlandish. The premium rate-searching sites are charging this much per lead—not per conversion. You get a chance to market to a prospect alongside all the other banks that paid $75 for the same lead. Scenario B is a typical cost for a well-qualified list purchase.
Even so, this is a simple example. It doesn’t take advertising costs into account. While acquisition costs are the same, it will cost 10x more to market to the larger list.
But bear with me. We’ll get back to this.
The base problem with the scenario above is twofold: yield and scale.
A hundred highly qualified prospects will still be the victim of statistics. You might not waste much money, but you won’t get much yield, even if your campaign performs well beyond any reasonable expectation.
Over-targeting can lead to over-missing.
Pinpoint targeting means that if you miss, you’ll miss big.
Scaling factors such as postage on premium leads can eat your lunch. You must plan on a yield to balance out the investment. It’s not just about saving money. It’s about producing results.
Sometimes, it’s beneficial to back up. A friend of mine was recently running for a local political office. He found himself in a runoff. A consultant priced out a direct-mail campaign to the most important neighborhoods. It was expensive. My friend called me for my opinion. We quickly looked at the USPS website’s Every Door Direct Mail (EDDM) map. EDDM lets you buy a full mail route at a much lower postage cost and no list cost. There is no personalization, but you can blanket a large area. My friend purchased three carrier routes and sent nearly ten times the number of mail pieces needed to reach every home in these neighborhoods for a quarter of the cost (printing and postage included). He won the primary runoff.
I want to reinforce a key point: not only did he buy ten times the houses for one-fourth of the price; all of the houses in the targeted list were included in the carrier routes. He could’ve overpaid to reach those houses. By backing up, he reached his targeted list and their neighbors—and likely picked up more votes in the process.
My friend might have killed a cockroach using a hand grenade, but it was more cost-effective – and just plain effective.
The Best of Both
Neither approach is fully correct, though.
As we mentioned, costing comes into play in both mailing scenarios. More pieces can cost more money. This is why you should layer your approach, especially in the testing phase. You might send a more upscale (expensive) piece to the more targeted list while sending something more generic (cheaper) to the less-targeted list. As you find success in one area or the other, you can always scale up toward that method. Conventional contemporary wisdom leads us to lean into targeting (sometimes a little too much). Don’t be afraid to back up and look at a wider universe. This will ensure you’re not putting your eggs into the wrong basket—or at least too many of them.