How hyperlocal marketing with postal codes can lift your acquisition returns

Posted on March 24, 2017 by Canada Post in Marketing solutions

Hyperlocal marketing is gaining traction as a way to attract consumer attention and prompt desired actions in in a world where it’s estimated that the average person is exposed to hundreds of ads and thousands of brands each day – with only 12 ads making an impression. Hyperlocal marketing can be an effective technique to reduce the costly process of acquisition.

It works by targeting small, geographically centered “communities,” giving you the power to tailor marketing to resonate with your prospects’ immediate and compelling interests. The communities can be identified by layering different types of data – like age, income and shopping habits – onto geographic areas.

Taking it hyperlocal

When you go hyperlocal for acquisition, whether through digital or direct mail, there are three very important targeting considerations:

  • Where do you your existing customers live?
  • What is the profile of your high-value customers?
  • Where do prospects who mirror your best existing customers live?

Tip. The rise of online shopping and services means that your existing customers (and most likely prospective customers) might be far away from your business. Look for customer location patterns in your e-commerce shipping data. If you find address clusters with high sales, you’ve just identified prime marketing territory. Then, tap into brand new acquisition possibilities by finding hyperlocal target areas whose residents share these characteristics.

Acquisition marketing’s gold standard? Targeted, repeat exposure

The ideal acquisition campaign delivers high value, long term customers who provide the kind of profits that makes businesses happy. The challenge lies in figuring out who are the most likely prospects and how to reach them. Once identified, it may take several exposures to acquire these ideal prospects as customers. And that engagement is likely to require touch points across different marketing channels.

Repetition builds your message’s credibility and trust factor. The more often people see a message, the more inclined they are to believe and remember it, according to studies on the Familiarity Effect. The marketer’s takeaway? You’ll probably get better return on investment by sending the same message three times to 10,000 people rather than sending it once to 30,000 prospects.

Even better results can be expected when the targeted prospects share characteristics with your ideal customers. There are many ways to crunch customer data to reveal likely acquisition targets, but one of the easiest methods – with data that most customers are comfortable providing – is by postal code.

Postal Code Targeting

There’s buried treasure in your CRM’s postal codes

Many businesses have an untapped gold mine of postal code information sitting in their customer relationship management (CRM) system. If the only information your CRM holds is a postal code, you can see:

  • Where your customers live
  • If they’re urban or rural
  • Whether they’re attached to a business or residence
  • If the building is an apartment building

But that’s just the start. Marketers using direct mail can target even more precisely by using a complete postal code to drill down to as few as 20 addresses with Postal Code Targeting. Adding data overlays creates a very detailed picture of just who lives or works at the addresses typically found in each postal code. You can segment this hyperlocal prospect group by:

  • income
  • education
  • ethnicity
  • types of homes
  • buying patterns
  • online shopping habits
  • age ranges
  • car ownership
  • And much more

What’s hidden in a postal code?

Every postal code is broken in two chunks.

The first chunk, the Forward Sortation Area (FSA) contains about 9,000 addresses. It reveals the area of Canada, whether it’s rural or urban and the larger section of a city or town. This is the level that digital postal code targeting, like Google’s, targets.

The second section is the Local Delivery Unit (LDU), narrowing the area down to an average of just 20 addresses. It contains the smallest number of geographic addresses, identifying whether the address is a business, residence, or apartment building. In urban areas, it reveals the block area and even the side of the street the address is on. This is the level of targeting precision available with Canada Post’s Postal Code Targeting.

Personalization by postal code

The data available within each postal code permits a valuable degree of precision for acquisition campaigns. Marketers can tailor messages like special introductory offers and promotions to appeal to different groups within their new audience. A study by HubSpot that reviewed nearly 100,000 calls to action found that those that changed according to the recipients’ different characteristics had a 42% higher action rate than generic “spray ‘n pray” calls to action.

Increase visibility with integration

Acquisition campaigns can lift their reach and impact by combining physical and digital hyperlocal. The clear evidence that physical marketing makes a much stronger impact on key areas of the brain makes targeted direct mail the natural channel to build awareness and trust. Blend it with location-based digital targeting from companies like Google and Bing who serve up your business on search, mobile and display and through location extensions to help prompt actions.

Tip. When using a direct mail acquisition solution like Postal Code Targeting remember to use the feature that suppresses your existing customers’ addresses from the mailing. Not only does this save you from spending money on customers you already have, it means that you aren’t sending them irrelevant messages that damage the relationship with your business.

In the end, hyperlocal marketing makes it easier to attract consumer attention with relevant messages. Eliminating the scattershot acquisition approach and suppressing existing customers provides more bang for the marketing budget.

Canada Post’s newest acquisition marketing solution is Postal Code Targeting.

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