The great thing about database marketing is that a company is able to improve their business by conducting tests and controls. Every serious marketer knows that every single promotion is, in fact, a test at the end of which you emerge with proof of your effectiveness, based on whether the customers respond or make purchases. A good way to do this is by riddling your customer database with control groups.
What is a Control Group?
Control groups include customers who use a product or service but without enjoying the same promotion benefits sent out to many others. The typical percentage of the number of customers included in a control group is 10% of the size of the entire campaign group. Control groups offer the only and best way to learn whether the promotion is successful or even worthwhile.
The basic concept of the control group entails selecting a random or almost random sample from the campaign marketing list, which is then excluded from the promotion. Thereafter, measure the control group’s activity and compare this to the activities of the campaign group you targeted for your promotion. The differences between the campaign and control group will give you a good idea of the effectiveness or profitability of your campaign.
How it Works
The idea behind control groups holds that a percentage of customers in your campaign will buy from you during the period of the campaign. The control group enables you to filter out this effect, along with effects on other different channels that may influence behavior, including display advertising. This will also show you how much your campaign affected the behavior of customers.
The use of control groups is a standard practice that is featured in all forms of market analysis and is, in fact, fundamental to studies of statistics. Marketing control groups are much more effective when you combine them with customer analytics typical in many customer relationship management or marketing automation systems.
Marketing Control Groups & Customer Analytics
When combined with a CRM system, a control group can help you in detecting your campaign’s halo effect. These include purchases made, as well as other actions the campaign influenced which don’t result from the normal campaign channels. CRM software can capture halo customers because it is designed to track all points of customer contact, and not just those directly responding to the campaign.
- A halo customer is one so taken by the campaign that they decide to call and order the product directly and not through your call-to-action channel.
- A customer who does not use the included promotional coupon in the marketing campaign, yet still buys your product.
The assumption is that the customers within your control group that responded to unconventional methods were nevertheless influenced by your campaign, and you can consider them as a part of your campaign effect.
Control groups are important in that they can offer huge payoffs with regards to designing your future marketing campaigns, reallocating your marketing budget and demonstrating proven incremental progress to your management team.