How To Stop Selling To People Who Will Never Buy

The following was previously published in an earlier edition of Marketing Insider.

Marketers expend considerable intellectual energy to sell to their best prospects. But one key lever is often overlooked: smartly allocating budgets between national and local media, which can make the difference between focusing on consumers who will buy from you, and wasting money on those who never will.

Today, this issue has taken on added significance with COVID-19 and the need to customize media locally based on localized business restrictions and outbreak levels.

Most of us were taught to look at local media based on a breakeven analysis: the point at which the costs of local media make it more efficient to buy nationally. The breakeven point was often at only 10-15 DMAs, depending on the markets, rendering local media “inefficient” for many marketers.  

That makes some sense, but there are two problems:  

Lack of prospect focus. The vast majority of people in any DMA are not likely to visit a given store. For example, if a potential “customer” lives and works in Geneva, Illinois, and your stores are in  downtown Chicago, how often are they making that 58-minute (without traffic!) trip?   



Lack of geographic customization. The DMA is too big an area for many marketers. With significant differences in demographics, economics and shopping behavior by geography, effective media planning should be at a trade-area or ZIP level.

Here are a couple of tips to gauge the real efficiency of national versus local media and, in turn, focus on people who will actually buy from you.  

Get customized. Look at your store locations, drive times, historical sales, and shopper demographics to create custom trade areas. Most marketers see significant differences that are often best addressed by local media.

Rethink your math. Calculate the cost to buy media in your specific custom trade areas and compare it to the cost of national media to deliver that same custom trade area. Remove impressions delivered outside the custom area because they aren’t “gravy”; they are waste. (For our purposes, the objective is driving retail sales; obviously the equation gets adjusted for ecommerce goals).

Using such an approach allows for a fact-based assessment of the true efficacy of local media—not just on eyeballs, but on sales. Factors such as store density, market media costs, time of year and purchase cycle all impact the results. In practice, the answer is often not a simple either/or, but rather a matter of degree.

Even when it favors national media, for example, the analysis highlights specific geographic pockets showing the most upside opportunity for localized emphasis.   

Add to this the unique situation of COVID-19 and the fact that some products are either not available or in short supply in some markets, and the scales often tip a bit further toward local.

So, the next time someone says national media is more efficient, you can respond: “Well, it depends. What are your objectives, how dense are your locations, are all stores open to the same degree amid the pandemic, and how do you feel about paying for people who will never buy from you?”

1 comment about "How To Stop Selling To People Who Will Never Buy".
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  1. Todd W Rankin from Ampersand, October 16, 2020 at 4:47 p.m.

    One of the best POV articles I have read in a long time. Agree 100% with Rob.

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