I’m Feeling Fatigued: Managing Diminishing Marketing ROI

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As marketers, we consider fatigue in two ways.

Definition: A declining opinion of a company due to being overexposed to unwanted marketing efforts from that company.
Definition (2): The declining value of a marketing investment over time, based on frequency.

While the cadence with which you contact your customers is critical to maintaining a good relationship with them, today we’re going to focus on the second definition. As you invest in your marketing outreach, how effective will the 5th email in a week be? What about the 10th direct mail piece in a year? Do you know when the money that you’re spending on your marketing decreases in efficacy?

Fatigue analysis is something we do frequently at Pluris. We review the success of marketing campaigns relative to the frequency of contact over a certain amount of time. But what, exactly does that mean?

Jane’s Widget Emporium (not a real client, if you couldn’t tell) has a tight budget for their successful direct mail program and a healthy database. JWE is concerned about continuing to invest in direct mail without fully understanding the potential yield. Equally important, JWE is planning for next year. Should they increase or decrease the frequency of their mailings? Should this be a blanket strategy for their full list or specific to particular segments?

To solve for these questions, we’ll dig into the data to see who is responding to JWE mailings, and when. Our research will uncover which customer segments are most engaged and the tipping point of when mailings stop being as effective. Our fatigue analysis almost never shows a need to completely stop contact with a customer. Instead, our recommendation to JWE would be to slice their customers into specific group and tailor specific messages and timing to each group: 

  • Group A should be contacted weekly on all new products;
  • Group B should be contacted the first week of the month for products that they have shown interest for;
  • Group C should be contacted Tuesdays to Thursdays on upcoming products;
  • Group D should be contacted when there is a sale or promotion;
  • Group E should be contacted only if they are new to their home;
  • Group F should be contacted if the price drops below x%; and so forth…

The key to segmenting customers is to allow for change. Just because a customer was in Group C in the current month, it doesn’t mean they will remain in that group in the following month. Continuous adjustment of each customer’s group score will allow JWE to effectively tailor the correct message and delivery to each person in their market. This sort of deep understanding of the efficacy of marketing investments helps the good people at JWE not only improve their ROI, but it also frees up marketing dollars for them to invest in new, less tested strategies. 

Customer responsiveness varies wildly based on industry, brand awareness and customer segment. Every dive we do into the data is different. What remains consistent, though, is that with a better understanding of the data, marketers can spend smarter, more efficiently and have better returns.

Learn Why  Marketing Analytics Fail

Category: analytics, segmentation

Michael Caccavale

Michael Caccavale

As the leader of Pluris, CEO Michael Caccavale is the innovator and forward-thinker behind the company’s marketing enablement, analytic and optimization solutions.

About this blog

At Pluris, we believe that we all can do a better, more efficient job at marketing to our most important customers. On this blog, we'll discuss how strategy, database management, offer optimization and analytics can help us all be better marketers. Sometimes, we may just talk about sports.

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