Targeting customers with product samples
Socio-demographic profiling of prospective customers
Simply Argan Ltd contacted us as they wanted to know the socio-demographic profile of people requesting free samples and whether they subsequently purchased a product.
Simply Argan Ltd produce a range of 100% pure Argan Oil products. Argan Oil has many benefits such as anti-aging, rehydrating dry skin and improving hair health. To find out more about their ethical and organic products visit - http://www.simplyarganoilshop.com/
Simply Argan Ltd had been sending free product samples to prospective customers and wanted to use our geodemographic profiling service to:
- Check if they were targeting the right types of people (target market)
- Improve their return on investment
Considering how much free samples actually cost they wanted answers, which only socio-demographic analysis could provide.
No such thing as a free sample
Sending free product samples can be a great way to introduce potential customers to a product and brand. It gives potential customers the opportunity to experience the benefits of the product before buying which, in today’s online retail world, is not usually possible. If the samples are sent to the right types of people they’re a great tool and will convert well.
Unfortunately, free samples aren’t actually free. A business has to produce the sample at a cost in the hope that someone will like it enough to pay.
A free sample, costing £5.00 to produce, that leads to a £50.00 sale sounds like money well spent and good marketing. If you have a great product, then of course people will want more. But not all people are the same.
Therefore, the key to a good return on investment, when sending free product samples, is to target the right people. If you’re targeting the wrong types of people with free product samples you could be wasting money and time.
But how do you know if the free samples are received by the right people?
To answer this question Simply Argan Ltd first needed to understand their customers. This required geodemographic profiling.
Geodemographic profiling is how we can understand people by using the places they live. It’s based on two principals
- Two people that live in the same neighbourhood are more likely to be similar types of people than two people chosen at random
- Neighbourhoods can be categorised according to the characteristics of the people who live there. Therefore, two neighbourhoods belonging to the same category are likely to contain the same types of people. This still applies even if the two neighbourhoods are geographically miles apart
Now I bet that’s got you thinking. If you have customer postcode data, then you can start to understand other people by using geodemographic profiling…
Please note that this is just a quick overview of geodemographic profiling. If you’d like to know more visit our geodemographic classification, P² People & Places.
Back to our client’s challenge.
Simply Argan Ltd wanted to understand whether the people who requested free product samples were subsequently becoming paying customers.
We uploaded Simply Argan's customer postcode data into Prospex, our GIS software and used P² People & Places, our geodemographic classification module, to create the geodemographic profiles.
We also mapped the locations where the free product samples had been sent and then compared them to the locations of their existing customers using the geodemographic profiles.
The maps highlighted that:
- People who were requesting samples were not going on to buy the product (become paying customers)
- Existing customers were buying the products and, in general, had not received a free sample
Although Simply Argan Ltd had a suspicion that the free product samples were not converting they did not have the insight required to prove or disprove it. Profiling their customers and comparing the data to the locations where the samples were sent highlighted the pattern. It gave them the accurate data they needed to make decisions about the free samples.
Marketers aim to produce relevant communications which requires insight. It’s the same with sending free samples. If you focus on the wrong types of people, you’ll generally receive a poor return on your investment. Focus on the right types of people and voila; you’re building relationships and giving people what they want.
Now Simply Argan Ltd are able to use the geodemographic profiles to ensure further communications and promotions are targeting the right types of people.
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