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02 May '15 | Debjyoti Paul

German Shoppers: Meet Them in the Fast Lane to Phy-gital

15 January '15 | Ralf Reich

Shoppers Will Share Personal Information (But They Don’t Want to be “Friends”)

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Modernize or Perish: Property and Casualty Insurers and IT Solutions

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Benelux Reaches the Phy-gital Tipping Point: Omnichannel Readiness is Crucial

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The New Omnichannel Dynamic: Finding Core Principles Across Industries

13 January '15 | Debjyoti Paul

Technology does not disrupt business – CIO day 2014 Roundup

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Apple Pay – The Best Is Yet To Come

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Digital transformation is a business transformation enabled by technology

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3 Stages of FATCA Testing and Quality Assurance

06 October '14 | Raman Suprajarama

3 Reasons why Apple Pay could dominate the payments space

18 September '14 | Gaurav Johri

Beacon of Hope: Serving Growth and Customer Satisfaction

05 August '14 | Debjyoti Paul

The Dos and Don’ts of Emerging Technologies Like iBeacon

30 July '14 | Debjyoti Paul

What You Sold Us On – eCommerce Award Finalist Selections

17 July '14 | Anshuman Singh

3 Steps to Getting Started with Microsoft Azure Cloud Services

04 June '14 | Koushik Ramani

8 Steps to Building a Successful Self Service Portal

03 June '14 | Giridhar LV

Innovation outsourced – a myth or a mirage or a truth staring at us?

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Micro-marketing – the three Key Principles

Posted on: 20 January '12

Micro-marketing, which is about understanding, segmenting and targeting markets at a local level and also at an individual level is an important business analysis and planning tool. It helps to establish stronger relationships with customers and partners, boosts revenue realization and also improves operational efficiencies. Let us discuss the important aspects that we must not lose sight of, as we embark on these potentially transformative marketing programs; especially in this era of digital evolution and convergence.

The three Principles:

1. Consider the relationships

Analysis in isolation has never been a great idea. A recent study published by a large data mining firm conducted a segmentation study for credit card users of a large bank. The study was fascinating as it measured transaction types against revolving balances, and derived key conclusions about profitability of customers who did not carry a balance. But it failed to consider that credit card customers may also be customers of bank offerings outside of credit cards. So a customer who had a large balance in his checking account potentially could have appeared on the pink slip list. This may imply lesser promotions, lower rewards, higher interest rates or just plain ignorance of a customer whose engagement should have been marked to be boosted, not reduced.

Such scenarios may be prevalent across industries and firms. A CPG firm that creates smaller clusters of retailers within larger areas often garners pricing and supply chain efficiencies through micro-marketing. At the same time, the CPG firm may leave a lot on the table, or even sacrifice sales and loyalty by evaluating individual product families.

No matter how large the individual business units may be, analytics dealing with important positioning and relationship decisions, must be built with as broad a view as possible. Organizational hierarchies, data and IT silos, as well as constraints arising from external partnerships or lack of time should be resolved before these high impact programs are initiated.

2. Include relevant channels

It is important to consider all relationships as well as all channels. Sometimes the objectives of micro-marketing can be met by looking outside the usual channels. For example, consumer level targeting can be maintained and nurtured online or through mobile, providing manageable goals to the physical supply chain. In case of a CPG firm, this micro-marketing approach may help to segregate consumers who can be serviced outside the traditional big box retailer model, perhaps through a different supply chain. Alternatively, for the retailer, this higher engagement with the consumer can create more predictable inputs into inventory planning, by customizing the flow and type of foot traffic. Mobile coupons and promotions are some of the many emerging methods that complement this strategy.

Channels analysis is even more important for industries with a traditionally higher Customer Interaction Index ( Hence For businesses fitting these criteria, such as banks and credit card companies, including social channels through mobile and web can dramatically boost the effects of micro-marketing.

3. Know your supply chain

Sometimes additional benefits from micro-marketing come at higher costs. This is the proverbial “elbow” or the efficient frontier concept in finance. The supply chain for your firm, regardless of the industry it is in, will often influence the level of targeting that you adopt. A CPG firm can potentially do store level marketing and inventory planning, but often a mini-chain level cluster within the overall retailer network will be enough to realize most savings. This can be done without sending supply chain complexity and costs through the roof. This also applies for banks as they plan localized campaigns and offerings through their branch networks.

The takeaway here is to understand these supply chain dynamics before the analytics goes too far forward. The key explorations are:

  • What is a long term constraint?
  • What can be resolved?
  • What aspects of your supply chain can be evolved to support these goals?

This is often an ambiguous situation, but scrutinizing and navigating appropriately is critical to the success and ROI of a micro-marketing program. At the very least, it gets the right stakeholders engaged at the right time. For a high impact program like micro-marketing definition, the sponsor should aim to bring traditional adversaries together or seek other champions to help garner support.

The Next Step

Micro-marketing is an important and necessary tool. To encourage the adoption of these three principles and realize the full potential of micro-marketing, it is vital to integrate data silos and analyze business processes from a top down perspective. Escalating such programs to encompass stakeholders from key functional and product areas is even more critical. This is done to guide the initial phases that build the business scenarios and program benefits. Nevertheless, micro-marketing is as much of an art as a science, and a unified approach will go a long way towards achieving the goals. What is your take on it?

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  • sunil jogdeo

    The write has given additional info on some different aspects of micro marketing. There is no doubt that micro issues must be taken care of to achieve macro results. Thanks.

  • neela

    Nice Article