Approximately once every two weeks I receive the exact same credit card offer. It comes in the mail. It’s a heavy, glossy packet containing two separate booklets and a small stack of disclosures printed on flimsy, recycled paper. It looks expensive. I throw it out every time.
It seems like such a waste. Why go through all the trouble of sending me this slick, expensive-looking piece of advertising? How much money are they wasting on these things?
In reality it isn’t a waste at all. What you call junk mail is actually a highly successful form of marketing known as direct mail advertising, and in this age of online everything it’s still one of the most reliable methods of reaching consumers and making sales.
Why is it so effective? Because direct marketers know more about you than you might think, and they use this information to only advertise the right products to the right audience. Which just raises the question: exactly how much do they know about you?
Following the information breadcrumb trail
There’s a pretty famous story about a man who went down to the local store of a certain national big box retailer to complain about a direct mailing his teenaged daughter had received. It was a stack of coupons for maternity items – lotions, supplements, clothing, diapers, etc. The man was furious. He thought this store was trying to talk his daughter into early motherhood.
It turns out his fears were unfounded – his daughter was already pregnant. She hadn’t told anyone this, and certainly no one from the store. Instead, this store had analyzed her recent shopping habits and determined that she was likely pregnant. The store then served her an advertisement designed to turn this information into sales (as they would to anyone), and in doing so, showed the girl, her bewildered father, and the world just how much businesses know about individual consumers.
As queasy as the whole thing might feel, the national retailer was doing something salesmen have been doing for centuries – understanding their audience. The more you know about someone’s habits, preferences, and economic circumstances, the easier it is to sell them something. Someone with a dog, for instance, is about 100 percent more like to respond positively to a coupon for dog food as compared to someone without a dog.
You may not like the idea, but you are constantly leaving an information trail. Anyone with something to sell need only follow that trail all the way to your wallet.
Information for sale
Knowing your audience is the most important aspect of your direct marketing efforts. To grow your business, you need marketing leads lists that match the profiles of your current best customers.
That’s leading credit reporting agency Experian describing their small business marketing products. According to Experian’s website, these tools enable merchants to learn about the “demographics, lifestyle attributes, shopping behavior, purchasing habits, [and] opinions” of local consumers.
As data collectors like Experian know, the secret to sales isn’t finding a customer and then figuring out what they’d like to buy; it’s creating a profile of the consumer most likely to buy your product, and then finding customers who fit that profile. Rather than searching for suitable consumers, companies instead turn to third party lead generators and say, “This is who we’re looking for.”
Experian is far from alone in providing retailers and creditors with consumer information. There’s big money in big data. With everyone looking for the cheapest way to make the most sales, it’s important to know that all of your data – no matter how benign – is being collected by someone, then sold to someone else, for the purposes of selling you something. In other words, your data gets around.
You, the Consumer
All of this data paints a pretty compelling picture of you as a consumer. And thanks to data mining, there’s very little randomness when it comes to marketing. There’s no place for it. Advertisers would much rather reach out to a smaller group of consumers with a higher likelihood of converting (that is, making a sale).
This means that the contents of your mailbox are almost never accidental. The offers, flyers, and advertisements you receive all come to you for a reason (even if that reason is simply that you live within delivery distance).
- Do you have poor credit? There’s a good chance you’ll receive plenty of potentially predatory offers for credit cards and loans with bad terms.
- Did you just move into a new apartment? Expect to hear about some “unbeatable” rates on rental insurance.
- Are you approaching retirement age? Don’t be surprised to find a flood of special offers in your mailbox “just for seniors.”
- Do you have young kids? Here’s a Back to School sale I really think you need to know about!
Take back the power
Just because advertisers manage to offer you what you need when you need it, doesn’t mean you should necessarily make the purchase. Remember how those coupons and credit card offers got to you in the first place – through a detailed analysis of your personal and financial history. Being smart with your money means putting in that same kind of effort in the opposite direction.
If you’re planning on making a purchase, be sure to check competing prices and rates. Do your homework. Shop around.
Receiving direct advertising means that you fit a certain profile. Consider flipping roles by creating a profile for potential purchases and then going out and finding items that fit that profile. Advertisers save money by understanding exactly who they want to sell to. You can benefit from those same principles by understanding exactly what you need to fulfil your existing need or want.
And if you’re tired of being marketed to at all, opt out! You can say no thanks to junk mail and avoid those targeted offers altogether.