The age of mass marketing is slowly coming to an end and procurement is changing as a result. We see it in the way orders are handled. In our recent survey, we found that 51 percent of all orders had fewer than 1,000 items. While the number of large orders has remained the same, medium-sized orders have declined over the last four years from 35 percent to 28 percent. Small quantity orders, however, have grown to 50 percent in the same time frame. With so many small quantity orders comes a greater degree of complexity. The reason for both of these alterations to the market is the use of targeted marketing as a viable strategy to reach the ideal audience.
Building multiple niches
Targeted marketing is defined as utilizing a more focused promotional approach to reach out to your audience. Instead of capturing the largest number of people possible, customers are targeted based on the likelihood they’ll buy a company’s product or service. This doesn’t reduce the amount of potential customers, but rather segments it into smaller groups so they’re more easily accessible. What makes targeted marketing distinct, and a cause for concern for procurement, is this segmentation. Instead of one large order, you need to complete several small orders for the campaign based on specific niches.
There are certain benefits to using this approach from a strict procurement perspective, as Demand Media noted. You greatly limit the amount of excess materials you get from suppliers, ad agencies and other stakeholders for the campaign. Because there is a specific audience in mind, your orders are limited in quantity to the size of each niche. Combined, this reduces aggregate spend. More importantly, if something goes wrong with the order or the campaign fails within the niche, you can successfully compartmentalize and mitigate the losses.
In addition, there is less waiting time to receive the deliverables. While this may mean that a single supplier will have to churn out a series of orders, it’s also possible to use different suppliers to get the same result much more quickly.
Customizing the situation
With the understanding that audiences will vary, there is more to targeted marketing than mere content. Customization also takes a role in terms of design and display, which presents new challenges for procurement. Instead of creating a single order for the campaign that will fit in all markets, each targeted order can have a custom design in mind, requiring different materials and specs.
At the same time, using customization on different marketing products, including displays and flyers, can have some distinct advantages. For example, signage firm Benchmark Displays pointed out adding customization, even with a smaller order, increases brand awareness due to the level of refinement and uniqueness attached to it. Depending on the target audience, you can display more or less information. Because it’s refined to a target audience, you can develop methods for reducing waste by designing specifically for a location or a consumer. You can procure materials with distinct placement and accessibility in mind, greatly improving your interaction with the intended customers. By targeting your audience, your orders get smaller, but your return on investment becomes larger.