Why Targeted Marketing Often Backfires — and How You Can Win the Game

You’ve probably seen targeted marketing in action. When you receive a coupon in your email because you subscribe to a company’s newsletter, or when you get a discount code from your favorite resort, you’re seeing targeted marketing. Targeted marketing extends discounts and special offers to customers based on their prior history with a company or some other qualifying tidbit such as living in a certain zip code or working in a certain profession.

Targeted marketing has become rampant. This past Christmas season, Best Buy gave some of its Reward Zone Members $20 or $10 in reward certificates based on their prior purchasing history. Some members received nothing. Some resorts give discounts to prior customers, but some give the discounts to frequent customers and others give the discounts to those who only visited once. Amazon and some other e-tailers have long been suspected of offering different prices to different customers based on prior purchasing history. The list goes on and on.

Targeted marketing is popular with retailers because they believe that the surest way to increase profits is to make offers to certain customers. Their studies and statistics show that infrequent customers can be lured back with a discount, or that frequent customers shop more often when offered promotions. It’s incredibly easy for retailers to do this kind of marketing these days. Since everything you do is tracked in a computer somewhere, they can tell who is spending and who is not. They can see which zip codes need a boost in spending. They can see who is likely to buy things at full price and who will only buy at a sale price. Marketers love to disseminate all this data and then decide who should receive certain offers.

The thing is, as easy as it is for marketers to do this, it is equally easy for customers to figure it out. This is where the problem comes in and why targeted marketing often backfires. How many times have you seen a post on the Internet from someone gushing about the great deal they got at XYZ retailer or hotel? You then wonder why you didn’t get that offer. Turns out, it was offered only to certain people and you weren’t one of them. In the day of the Internet it is very easy to see who is getting what and to be frustrated and angry that you are left out of the good deals.

Back at Christmas there were pages and pages of angry posts from people who missed out on the Best Buy Reward Zone program. People couldn’t understand why some customers got the free money and others didn’t, particularly since it seemed the higher amounts went to infrequent shoppers. Customers who spent a lot at Best Buy were miffed that their loyalty went unrecognized. Many of them were angry and swore they’d never shop at Best Buy again. Best Buy may have boosted their holiday sales with that promotion, but how many long time customers did they alienate? Best Buy isn’t alone. I’ve seen people angry at Disney World, hotel chains, Amazon.com, airlines, and many other retailers over their targeted marketing practices. Marketers have to ask themselves if they make enough money off of these promotions to offset the angry customers they might lose. I guess they do, because targeted marketing continues.

There’s nothing illegal about targeted marketing. As long as a company isn’t excluding people based on race, religion or other protected statuses, they can do what they want. Is it fair? Not really, but companies aren’t concerned about fairness. They’re only concerned about profits.

As a customer is there anything you can do if you don’t receive the best targeted marketing offer? Sure there is. Call or email the company directly and ask them to give you the promotion. Be polite, but let them know that you are unhappy to have been left out. Let them know how you know about the offer (saw it on the Internet, heard from family, etc.) and ask them to extend the offer to you. Tell them that you were thinking of buying “Item X’ from them and that the discount would really help.

If they refuse, you can let them know that you will be taking your business elsewhere. Let them know that you don’t approve of such marketing gamesmanship and that you will go to another retailer that is offering a better deal. Many companies will extend the offer to you in order to keep you a happy customer. If they refuse to extend the offer to you, you can use the power of the Internet to post your experience and let others know of your negative experience.

Targeted marketing isn’t a bad idea, but in this day and age when everyone knows what everyone else is getting, it is likely to backfire and simply anger a good number of customers who feel slighted. If you operate a business, weigh the positives of targeted marketing against the negatives. It might not be a bad idea to try to find a fairer promotional system for your customers. If you’re a customer, don’t hesitate to let a company know that you don’t approve of their tactics and that you demand parity in pricing. You just might get what you want.