Good companies have an affinity for spending wisely

One of the hardest things to do in business today is to spend your advertising budget wisely.

Many companies take a "shotgun" approach, where they advertise to large groups of people with the hope that a small percentage will respond. The problem with this type of advertising is that the general population that will see the ad drives the cost. The preferred way to advertise is to spend your money where you will reach the highest number of qualified potential customers, or what many people refer to as a "rifle shot" approach.

My experience is that a direct-mail campaign to highly qualified perspective clients usually is one of the best investments to grow revenue. The problem is discovering the identities of these groups.

One of the current darlings of the advertising world is the "affinity" marketing program. These types of programs target groups of people who have similar interests and needs.

The credit card industry is widely viewed as the creator of the affinity marketing programs. They found that they could offer a card that allowed members of groups to get the product they needed and identify with their group at the same time.

NASCAR is a great example of an affinity program. Not only can you get a NASCAR credit card you can get Jeff Gordon, Dale Earnhardt Jr., Bobby Labonte, Tony Stewart credit cards plus a host of other NASCAR stars. This is a classic example of affinity group marketing.

You don't have to issue an affinity credit card to get an advantage from this type of marketing. Not long ago we had a client in the transportation business that needed to communicate with individual business travelers. The cost to advertise in the national magazines and in-flight magazines was prohibitive. We needed a way to identify these potential customers and get information to them that was more detailed than a magazine ad. We immediately began to look for groups that had memberships made up of individual business travelers.

We found 20 distinct groups that met our target audience. These ranged from airline frequent-flier programs to associations for self-employed individuals and hotel-award program members. Each of these groups had a different cost to use but all of them met our criteria of affinity groups. They gave our client the opportunity to get their message out to a focused group of potential clients. Some of the airlines gave us the opportunity to buy award points to bundle with our client's incentives. Eventually, all offered some partnership program to assist their members in using our client's service.

Take a "rifle shot" approach with your advertising. Plan to advertise directly to potential customers. Find groups of people who you can identify and access. Talk with the group administration and see whether there is a partnership opportunity that would allow you to reward their group members. Invest more money per contact to explain your product in greater detail. The result will be a lower overall cost of advertising with better new customer growth.

DALE BUNCE IS THE FOUNDER OF CONSULTING FIRM INTERNATIONAL MARKET DEVELOPMENT AND FORMER PRESIDENT OF HONEYWELL-SHARECOM AND THE CHUBB COS. REACH HIM AT DALE@OPENMARKETS.COM OR (803) 642-5544.