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Generosity Marketing Part I: 5 Keys for Marketing Executives

Step one: admit you are hooked on too generous marketing

Take your customer segmentation to the next level with our advanced guide

Why it matters:

Excessive generosity in marketing, like giving consumers greater discounts than necessary, can lead to lower profit margins and missed opportunities. This blog post will cover how marketers can evolve from “too generous” to “generous enough” in marketing. 

The Big Picture: 5 Keys to Being Not Too Generous  

  1. Acknowledge Overgenerosity: Marketing generosity is like an addiction. It works in the beginning to lure in consumers. But whether it is “free money” in iGaming or “40% off on your first order” in retail sales, marketers need to admit that despite increased sales, they are training customers to only buy at deep discounts in perpetuity, helping form unhealthy customer expectations. This approach contributes to shrinking profit margins. Mastering the art of not being overly generous is facing up to the fact that you are giving the store way. Once a marketer confesses, they can take steps to keep their generosity in marketing in check. 
  1. Start with the Customer: Predictive models enable targeting marketing by assessing customers’ purchase likelihood. This strategic approach aligns generosity with shopping behavior, tailoring offers for each segment. For example, segmenting customers based on their average order value or preferred promotion type will allow marketers to maximize impact while lowering generosity waste. Plus, knowing a customer’s behavior can help avoid over-discounting. For example, if a micro-segment of customers tends to Research Online and Purchase in Store (ROPIS) then offer the discount when they abandon their browsing will just cannibalize revenue. This is their normal behavior. Their modus operandi is to research online and then go buy in store. 
    Likewise, not all Vegas Raiders fans bet the same way, with distinct preferences influenced by backgrounds, finances, risk tolerance, sports knowledge, and betting goals, among other factors. Effective marketing segmentation starts with a deep understanding of customers, recognizing unique behaviors within smaller segments.  
    Questions will arise, such as whether customers prefer new arrivals, while others wait for discounts, or if some iGaming players favor parlays (multiple bets at once) over single-game bets. The more finely you can divide your audience into meaningful segments, the more effective marketing efforts will be. 

Guide to Advanced Customer Segmentation

  1. Understand Customer Acquisition as a Window into Lifetime Customer Value: Understanding how you acquired each customer is crucial. Did the method of acquisition have any influence on their buying habits?

    Recognize the significance of customer acquisition channels and adapt your marketing strategies accordingly. Once they are a customer, do you know how to optimize their lifetime value? While acquisition costs more than retention, the initial actions of a new customer can give insights into their future behavior and value, which in turn helps you adjust your level of generosity. Read more about customer acquisition versus retention here
  1. Determine the Right Level of Generosity: Not all customers respond to generosity in the same way, and discount affinity may change over time or be subject to seasonality. In gaming, a passionate NFL fan may deposit and play without many incentives, but after the season ends, more generosity might be needed to keep them engaged with NBA/MLB. In retail, customers may purchase full-price polo shirts, but could wait for discounts on their jeans.  
    Because of these ever-evolving factors, determining the right level of generosity by manually testing different offers is very hard. It’s better to let AI take the lead, continuously. Whenever possible, implement campaigns that are self-optimizing, to automatically refine your marketing strategies over time. Self-Optimizing Campaign (SOC) is a particular type of A/B/n campaign that’s comprised of two+ competing variants plus a control group for comparison. SOC learns and improves campaigns automatically via its results over time, and instead of deploying the “winning variant” to all audience, it deploys the optimal variant to every customer. This way you can put in place multiple generosity levels and let SOC select the right level for each customer, thus significantly improving margin. More about A/B/n testing is here
  1. Maintain Consistency Across Channels: The last thing you want is a customer to get a personalized email offering 20% off, only for them to see a 40% offer on the website. Consistency is key in marketing. Ensure that your messaging remains symmetrical across various channels, including SMS, email, your website, and other communication platforms. A cohesive brand image and message will help reinforce your marketing efforts. The key is omnichannel. More about omnichannel is here. 

In Summary:

In the world of marketing, balance is everything. Being too generous can erode your profit margins and undermine your long-term success. By acknowledging your generosity, starting with customer insights, understanding customer acquisition, finding the right level of generosity, experimenting with offers, and maintaining consistency, marketing executives can strike the perfect balance and achieve more sustainable and profitable marketing campaigns. Don’t get hooked on being too generous; commit yourself to being “generous enough”. 

For more information on taking control of Generosity, here are links to the other parts of this series:

  1. Building a strong data foundation
  2. Having clean testing frameworks
  3. How to use AI to optimize and scale a strong data foundation and clean testing framework

For more insights on how to have precision in generosity, contact us.

The Guide to Advance Customer Segmentation

Go in depth on advanced segmentation with this guide which was written based on analyzing tens of thousands of segments across Optimove’s customer base.

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Shai Frank

Shai Frank serves as the SVP of Product and GM of the Americas at Optimove. Since his start in 2018, Shai has played a pivotal role in shaping the vision, strategy, and roadmap for Optimove’s product portfolio. Under his leadership, the product department is designing and delivering innovative customer-led marketing solutions that have been instrumental in elevating the success of Optimove’s clients. Shai brings a wealth of experience from nearly 20 years in product leadership and management across various industries. He holds a B.Sc. in Industrial Engineering and an MBA from Tel Aviv University in Israel.