Everyone is looking for the silver bullet in marketing. What is that one thing that will push our sales over the tipping point? What hidden avenue will be the one that gets us to the easy road. The reality is, that the best way to accomplish that is with sweat, a good marketing mix, and strong data strategy. But what happens when you have limited budget or resources to be able to chase down every possible lead in every industry? It’s hard to ignore the fact that look-alike modeling can result in double or even triple the results of standard advertising. Funny enough, only 30 percent of advertisers use look-alike modeling.
What Is Lookalike Modeling and Why Use It?
Look-alike modeling involves building target audiences based on data pulled from your current customer base. It takes into consideration company size, industry, products/services purchased and other identifying features that allows the user to be able to determine key factors that lead to a conversion.
Every business wants to increase its reach and build more awareness. However, it can be difficult to know which target audience to focus on without going through a lot of trial and error or in our favorite term - money. Look-alike modeling can eliminate the traditional trial and error saving time and money. It has been said that history doesn't repeat itself, but it does rhyme. What better way to look for your next customer than to look at those that have purchased from you (or your competitors) previously?
Who Is Your Ideal Customer?
Look-alike modeling is based on the idea that you have an "ideal" customer - in other words, a consumer who fits the ideal demographics you are looking for. Not all customers are created equally. Some may spend a thousand dollars but end up costing two thousand in customer service issues. Knowing who your best customers to target based on your company's goals is the first step in a quality look-alike model.
Every business will have different criteria for their ideal customer. A car dealership or real estate company might want to include people who have recently gotten engaged or married. A travel booking company might look for people who have gone on at least a few vacations in the past few years. Depending on what service you provide, you might look for people who earn at least a certain base income.
Here are some questions to ask yourself as you explore the possible data points you want to explore:
- Which clients bring us the most revenue?
- What industry are most of our clients in?
- Approximately how large are our clients? (revenue and employees)
- What marketing channels do most of our clients come from?
- Which clients stay the longest?
- Which clients refer us the most to their network?
In general, there are two kinds of data points you can include. One is behavior, such as purchase history. Another is demographics, such as age bracket and income.
What Is Your Lookalike Audience Goal?
You will also have to determine your main goal. Do you want to simply increase your reach? Or are you placing a greater focus on getting a higher conversion rate?
If you want to increase your reach and increase brand awareness, then you might want to be less strict about who you include in your look-alike audience. Perhaps you can include people who fit the general definition of your target audience.
On the other hand, if you want to get a high conversion rate, it might be better to narrow down your lookalike audience as much as possible.
Gathering Your Data
There are several different sources you can use to get data on your target demographics. Market research and industry studies are some options.
However, when referring to look-alike audiences, it is generally understood that your data source will be internal. After all, the purpose of look-alike modeling is to create a target audience based on a model of what has been proven to work already. Having clean data stored in a system like a CRM, is key to being able to do proper analysis.
You can gather data through tools such as Google Analytics and other services that track your site visitors and sales. If you operate an offline business, there are other ways to collect and aggregate your data.
Facebook Lookalike Audiences
It is worth mentioning that Facebook has a built-in look-alike audience tool. The first step is uploading a list of email addresses or phone numbers to create an audience. Then, you can ask Facebook to target audiences that have demographics similar to the audience you just created or to people who have already liked your page.
However, it must be pointed out that Facebook and any other social media platform is limited by the information that users choose to share. For example, some users may have a Facebook account but may not be very active.
How Helios Company Can Help
In addition to our superior data analysis and analytics services, we offer ongoing organizational strategy consulting for sales, financial matters, and business intelligence. Our team can help you create, develop, and fine-tune effective and efficient internal processes for both daily operations and big-picture growth.
Learn more about what we do and how we can help you take your business to the next level when you call us at (833) 743-5467 or contact us online.