Are there risks to marketing to best customers?

Mark Price posted a thought-provoking article, "Is your business at risk by targeting Best Customers?", which discusses how Burger King focused too much marketing attention on their “Best Customer” segment (who visit almost 10x per month!), and in the process alienated other segments, resulting in overall declining sales compared to McDonalds and the like.

Although the article focused on above-the-line advertising such as TV, it rang true for me based on our experiences with Uplift modeling for direct marketing. We often reach exactly the same conclusion: that we should typically be marketing much less to the Best Customers (who’ll buy anyway), but instead focus on the “Persuadables” who are at the margins where our marketing efforts can tip the balance.

This is a scary idea for many marketers, who are tempted to always send everything to Best Customers. But if there’s no incremental return-on-investment compared to a randomized control, isn’t it worth considering the benefits of dialing it back a bit? It saves money (in fulfillment costs, fewer unnecessary incentives) which can be deployed to segments with bigger impact (The Persuadables), and results in fewer opt-outs (either implicit, explicit or even completely driven away) meaning more opportunity to communicate a more relevant and effective message in the future.

Of course we don’t want to stop communicating with Best Customers entirely: I recently heard someone claim Uplift Modeling was “dangerous” because it meant you’d never send anything to Best Customers! But of course that’s not true: as long as we’re continually monitoring the impact of marketing across the customer base (compared to short and long-term control groups) and adjusting our models accordingly, we can accurately predict where our marketing changes behavior (positively or sometimes negatively), and where it isn’t necessary. After all, some Best Customers have strong affinity to our brand, products or customer service and don’t need a continuous barrage of marketing to keep them coming back!