What is the Cost to Effectively Target Market?

April 29, 2008 at 8:00 pm 1 comment

Q: What is the cost associated with effective targeting?

A: That is a pretty open-ended question! We’ll address the cost issues first with a comparison of the costs of a variety of mailing lists. Let’s assume that a list that is only targeted by geography (which just might work well for some retailers) is our baseline for costs–the lowest cost mailing list available. I’m referring to those mailing lists that are addressed to “Occupant”; essentially a marketer ‘saturates’ a specific neighborhood by mailing to every household in a specific geography. The cost for this type of list ranges (depending on volume) from $5-$10 per thousand records. A good source for this type of list is Melissa Data.

The next level of targeting is to use demographics such as age, income and presence of children to target a named compiled list. Large compilers (such as Acxiom or Equifax) offer literally hundreds of data selections that you can use to target your list. Depending on selects and quantities ordered, the list will cost you $30-75 per thousand records. If your market is B2B, a business file ranges from $50-$75 per thousand, and can be purchased from companies such as InfoUSA and Dun & Bradstreet.

Another category of targeted lists are vertical files which include lists of product buyers, association members and magazine subscribers, to name a few categories. These types of targeted lists typically run from $50-$100 per thousand.

Finally, perhaps the ultimate in targeting mailing lists is to build a statistical model that predicts the performance you’re looking for (how likely is this prospect to respond?”, is the classic example), and then score your prospecting universe with this model to allow for the most targeted data selections. In this case, data costs can run you $65-$85 per thousand.

The above examples focus on targeting mailing lists. If you are targeting your customer base, or your outbound email, the general rule of thumb is that the more data you purchase externally, the more analytics you apply to the targeting effort and the more niche your specific market is, the more expensive the targeting will be.

With that said, you should more than make up your targeting costs in the following two areas:

– You’ll reach more qualified prospects, so your response and conversion rates should be higher.
– You may choose to market to fewer people, so your marketing costs will be lower.


Entry filed under: Effective targeting, Mailing Lists and Data, Uncategorized.

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1 Comment Add your own

  • 1. Target market  |  May 12, 2008 at 5:54 am

    Some small business owners think they can’t afford to research their target market, competition and product development. But if you desire to be successful, you can’t afford not to.


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