Are You Talking to me?

I love to wander through a vibrant market but I hate being shouted at by a hawker, evangelist or charity fundraiser. And I don't want an over-eager salesperson swooping on me while I'm browsing in my favorite store – it makes me want to run the other way!

Maybe it's because I'm English, but I find such approaches intrusive, embarrassing and presumptuous. Often, the products being pushed are not what I want anyway, so the vendor has wasted valuable time and effort by bothering me. He might even have missed the one true potential sale of the day by spreading his resources so widely and thinly.

I still remember my university friend, Mike, and his job selling high-quality studio portrait photography over the phone. He and his colleagues would work their way through the residential directory, methodically but indiscriminately.

It was a soul-destroying role, not because the people who Mike spoke to were rude but because, mostly, they were sad and lonely. They were at home in the day, not in work, usually retired or on sick leave; they often had no family to share a special photograph with, and no money to afford one anyway. Some of them found such unexpected and ill-judged conversations confusing or distressing, only to have them end abruptly – the sales staff had to move on fast, to meet their targets.

Unsurprisingly, staff retention rates were low at this company, and its public image became tarnished. It certainly had a poor business model.

These anecdotes just go to show the importance of segmentation in marketing and sales. Even at street level, a skillful stallholder will get as much information about you as she can, before she tries to catch your attention. She'll make quick judgments based on your sex, age, the clothes you're wearing, how you walk, which other businesses you've visited, and so on. Similarly, a savvier telesales company might buy a list of customers from a related business so that it can target people who have similar interests. But it's still an expensive and time-consuming process with a low return on that investment.

Greater success comes when an organization focuses its attention on the customers it's already dealt with. If it collects the right data and does the right number crunching, it can work out who on the list is most likely to buy again and, even, who's most likely to encourage their friends and family to engage too. Then it can choose who to target and how, with better results.

I used to be involved with a nonprofit that adopted just this kind of approach. As well as endeavoring to attract a constant trickle of new supporters, replenishing what was referred to rather grimly as "natural wastage," the nonprofit started to examine its existing database more closely. It grouped supporters by their frequency, size and method of donation, and by types of behavior, such as buying from its online store, sharing news about it on social media, and helping practically with its work.

In effect, the nonprofit was using a modern form of RFM Segmentation, though its marketers didn't use such fancy terminology. And, as they'd predicted, it was far more efficient to communicate with enthusiastic and active supporters than with cold and passive ones. But they also learned the hard way how easy it is to overdo the attention. Positivity and passion for the organization faded quickly if too many demands were put upon the most valuable members of the database. Although the environment and technology were very different from a market, the effect for some supporters was similar to being accosted in the street, and they backed away.

My experience of seeing marketing in action "from the inside" has made me very aware of the messages that bombard me in my daily life. Whether I'm looking at billboard advertising by the bus stop, reading mailings in my Inbox, or watching election campaigns on TV, I'm wondering, "Are you talking to me?" and deciding how to respond.

So, how do you approach your customers and what's the best way you've discovered of finding out about them – are you a fan of RFM Segmentation, for example? Join in the discussion below.