Marketers invest significant time creating consumer mailing lists to ensure their direct mail messages reach the right audience. This week, we begin a new blog series, “Mail Smarter,” where we will explore how consumer mailing lists are compiled and how marketers can leverage list selects to enhance their targeted direct mail campaigns. Over the next three weeks, we will delve into the critical aspects of selecting and utilizing consumer mailing lists effectively.
Step 1: Analyze Your Trade Area and Customer Database
The first step in creating a successful consumer mailing list is to examine your current customer database and trade area. Ask yourself key questions:
- Who lives in your trade area? Are they homeowners or renters? Baby Boomers, Gen-Xers, or Millennials? What ethnic groups are present?
- What are their spending habits? If they are homeowners, how likely are they to invest in home furnishings, home renovations, or landscaping?
Understanding these demographics helps in identifying the right audience for your direct mail campaign. This data should include:
- The absolute number of residents.
- Household characteristics such as size, composition, and family life cycle stage.
- Current and projected demographic, lifestyle, and consumer spending data.
Understanding Demographic Data for Retail Spending
1. Population and Households Data:
- Population includes all persons living in a geographic area.
- Households are groups of individuals living together in the same housing unit, regardless of their relationship. Households can be categorized by size, composition, or family life cycle stage.
Demand is often generated by the household as a group. For instance, the entire family influences a household’s purchase of large items like computers or TVs. In contrast, individual purchases, such as personal electronics, are driven by the consumer’s preferences.
2. Household Income:
- Household income is a strong indicator of spending power. It correlates positively with retail expenditures in many product categories. Retailers often look at median or average household income to decide where to establish a business or set prices.
- Income Distribution: Discount stores may avoid high or low-income areas, while specialty stores may target higher-income brackets. Conversely, auto parts stores are commonly found in areas with lower household incomes.
3. Age Considerations:
- Expenditures change with age. The 65+ demographic, for example, spends less on most goods and services but more on health care and assisted living.
- Age-Specific Spending: Areas with a large elderly population often see high spending on drug stores and assisted care services. Younger demographics, like children and teenagers, influence spending on toys, daycares, and fast food.
4. Education Levels:
- Education level impacts socio-economic status and income. Retailers often focus on income rather than education, but some businesses, like bookstores and tech stores, thrive in areas with higher education levels.
- Cultural and Retail Preferences: Highly educated populations prefer specialty stores, cultural establishments, and non-chain stores. In contrast, less-educated populations are more likely to shop at discount stores and spend on car maintenance and tobacco.
5. Occupational Concentrations:
- White-Collar vs. Blue-Collar: Specialty apparel stores and office supply stores perform well in areas with a high concentration of white-collar workers. Conversely, second-hand clothing stores and used car dealerships are more successful in blue-collar neighborhoods.
6. Ethnicity and Spending Habits:
- Ethnicity significantly impacts spending habits, influencing the types of goods and services preferred. Retailers must tailor their product mix and advertising to meet the diverse needs of different ethnic groups.
7. Housing Dynamics:
- Home ownership directly affects expenditures on home furnishings, appliances, and home improvement products. Active housing markets are beneficial for retailers selling home improvement products.
Tailoring Your Mailing List with BB Direct
At BB Direct, we offer a comprehensive consumer mailing list that meets various direct marketing needs. Our database allows for creating targeted lists based on demographic, lifestyle, and interest data, ensuring you reach your best prospects effectively.
Contact our expert data team at (866) 501-6273 to learn more about how we can help you optimize your direct mail campaigns with the right consumer mailing lists. Stay tuned for the next installment in our “Mail Smarter” series, where we will explore how to utilize list selects to enhance your direct mail strategies.