Last Updated: November 25, 2020

Throughout all industries, consumers have never had so much choice. Whether they’re choosing between one of two similar products at the store, or skipping the store entirely to shop online, customers can easily compare the offering of multiple companies and shopping mediums.

With so much power in the hands of the consumer, businesses must position themselves as necessary in the minds of existing customers. According to Inc. Magazine, it is five to 10 times more expensive to find a new customer than to sell to an existing one. When customers are already familiar with a company and its products, that company’s advertising costs are significantly lower. Furthermore, that same customer spends up to 67% more than a new customer will. (See also Remarketing)

This presents both unique challenges and opportunities for companies. Existing customers cost less, but they also expect more. The more loyal they become to a company, the more they expect that company to meet their needs and reflect their desires. Companies must make careful and concerted efforts to market themselves to the customers they already have, or risk losing those customers to emerging competitors.

What is precision marketing?

Precision marketing is directed at existing customers to encourage brand loyalty and spur buying behavior. Precision marketing relies less on creating persuasive ads, and more on creating deals, offers, and gimmicks that will appeal to existing customers.

In order to do this, precision marketing relies heavily on market segmentation; a technique for breaking the market down into smaller, more specific blocks of customers with unique needs. Market segments can be very broad; women, for example, or they can be very specific; unmarried women over 50 with adopted children.

Market segmentation is dependent on harvesting data about customer behavior. For example, grocery stores offer discount cards that offer savings to customers, but also track everything they buy and monitor their demographic data (See also Affinity Marketing). Online retailers ask for details about a customer’s location, age, sex, and personal preferences when they sign up for an account. All of this data is stored in vast databases and analyzed by marketing departments to get a better sense of who their customers are and what they want.

Using this data, companies create loyalty programs to appeal to existing customers, ranging from free merchandise to special treatment and access to exclusive products. The goal of any offer is to make customers feel like their business is valuable and their needs are acknowledged. If a company can consistently provide an exemplary customer experience, that customer is more likely to return.

Effective customer loyalty programs

  • Boloco – The burrito maker uses a simple points system that gives diners a free item after they spend $50. By making it easy to accumulate points, Boloco has convinced many customers to sign up for their rewards card and use it frequently.
  • Virgin Airlines – The airline uses a tiered benefit system that offers members increased rewards as they move up the ladder. This encourages participation at the outset, and gives members something to shoot for as they invest themselves further in the program.
  • Amazon – Amazon actually charges for participation in their Prime loyalty program. The program offers customers free two-day shipping on all purchases. Despite the membership cost, customers can see the money they are saving and consequently purchase products more frequently.
  • Patagonia – The outdoor clothing maker implemented a feature in their loyalty program to make it easy for customers to sell their old clothes online. This promoted an image of recycling and sustainability that reinforced the image of the brand and the values of its customers.
  • American Express – They have had tremendous success with their loyalty program by developing dozens of partnerships with major retailers. They make it easy for customers to redeem rewards at places they would shop already.
  • GrubHub – The food ordering service built a game into their loyalty program that made it possible to win free food for a year. This simple but fun twist helped to encourage participation.

Who implements precision marketing?

Companies of all sizes seek to build a loyal customer base. Consider a small sandwich shop that uses a punch card to track how often customers eat there. After eating 10 sandwiches, they get the 11th one for free. These cheap, easy, and effective tactics make precision marketing a highly flexible marketing strategy.

Typically, however, larger companies with expansive product lines, are most interested in using a comprehensive precision marketing strategy. Competition amongst companies in the retail, hospitality, and travel industries can be fierce and these companies thrive on repeat business. They invest significant resources in gathering customer data, analyzing this data, and then using it to offer deals and offers to their existing customers.

How is a precision marketing plan developed?

Ways to Retain Customers

  • Prioritize customer service
  • Use diverse methods of communication from Tweets, to emails, to direct mail
  • Communicate actively and consistently with customers
  • Solicit feedback from customers
  • Promote loyalty through rewards programs, special offers, and consistent sales
  • Maintain competitive pricing
  • Offer new products and services to meet changing consumer demands
  • Train a happy and helpful staff to work with customers
  • Offer the highest quality products and services
  • Promote a fun and friendly atmosphere in the workplace

As the name suggests, precision marketing is highly concerned about accuracy and focus. The only way to carry out a precision marketing strategy that produces results is to follow a careful and comprehensive plan.

For example, consider Best Western Hotels, one of the largest hotel chains in the entire world, catering to families and business travelers who frequently use hotels. In order to encourage repeat business, Best Western has developed an industry leading rewards programs that provides incentives for customer loyalty (See also Loyalty Marketing). After successfully introducing travelers to the loyalty program, Best Western was looking for the best way to grow membership.

The company had a wealth of data about their customers that they had collected through online initiatives. After analyzing this data, Best Western decided to use a direct mail marketing campaign to connect with their repeat customers.

They teamed up with a company called InfoPrint to design customer benefit statements that resembled credit card bills or frequent flyer reports. The goal was to make it easy for customers to understand what benefits they had accrued and what it would take to earn more. The statements presented information in a clear and comprehensive way that allowed customers to maximize the benefits they received. (See also Informational Marketing)

Best Western also used the statements to encourage customers to sign up for a branded MasterCard through subtle advertising. Best Western sent new statements featuring the card to half of their loyalty club members, and sent their old style of statement to the other half. After an eight week trial run, the new statements proved to be incredibly effective, leading to a 39% increase in the number of stays and a 34% increase in the length of stays. Furthermore, 500% more customers signed up for the MasterCard after receiving the new statement.

Careers in precision marketing

Market Researcher

What do they do?

Average Salaries of Precision Marketers

  • Market Researcher
    entry level – $35,000-$70,000
    after 10 years – $100,000-$150,000
  • Loyalty Program Manager
    entry level – $40,000-$60,000
    after 10 years – $70,00 – $100,000
  • Copywriter
    entry level – $40,000-$60,000
    after 10 years – $60,000-$90,000


Market Researchers analyze market data in order to identify trends about products, customers, and marketplaces. The analysis they produce is used by marketers to create more relevant and effective advertising messages. This is a highly technical position that involves synthesizing huge amounts of data into useful intelligence.

Education and Skills

A degree in marketing is helpful but not absolutely necessary for a market researcher. Many have degrees in statistics or mathematics. The most important skills for doing this kind of work are a love of numbers, a careful eye for detail, and a knack for identifying the most relevant information.

Loyalty Program Manager

What do they do?

Loyalty program managers are tasked with keeping customers loyal to a company. In some cases, they will administer a single program; in others they might be responsible for all customer retention efforts. It is their job to create a profile of existing customers and then to find the most effective and efficient ways to keep their business.

Education and Skills

A bachelor’s degree in marketing will be necessary for any loyalty program manager. Supplemental education in public relations or the hospitality industry can also be helpful. Since it is typically only the largest companies that maintain widespread loyalty programs, this type of job is relatively uncommon and usually considered a senior position.


What do they do?

Copywriters are responsible for creating the text that accompanies any advertisement. The substance of most marketing messages is created by a copywriter. It will be their job to find the best way to appeal to existing customers, and then to create copy that speaks to this demographic.

Education and Skills

A degree in marketing will be helpful but is not absolutely necessary for a copywriter. Many enter the field after receiving degrees in English or communications. The most important skills for a copywriter are a strong command of the English language and an ability to understand what the customer wants.

How can a marketing school help you succeed?

Our Recommended Schools

  1. Grand Canyon University (GCU)

    GCU's Colangelo College of Business offers leading edge degrees that address the demands of contemporary business environments.

  2. Southern New Hampshire University (SNHU)

    Explore the bond between business and consumer behavior with a degree in marketing.

Trying to retain existing customers through incentive programs and service upgrades has been a fundamental goal of businesses for decades. The theories and strategies behind precision marketing have been studied intensely since the 1950’s, and is a crucial marketing technique for professionals to understand.

A marketing degree teaches new marketers the skills they need to carry out successful precision marketing campaigns. Students learn how to analyze the needs of existing customers and develop programs and services that encourage loyalty. Professors who teach in marketing departments have decades of experience in the industry and can point to dozens of case studies that illustrate both successful and unsuccessful examples of precision marketing. A degree in marketing prepares new marketers to immediately begin making an impact at the companies they work for.

Customer Retention

There are many reasons that customers leave one company for another. But as a 2009 survey from Marketing Sherpa showed, those reasons might be different in the minds of customers and vendors. The chart below reveals that vendors believed better prices from their competitors were the primary reason customers left. The customers themselves identified customer service as the main reason they left. Companies invested in precision marketing would do well to remember that service trumps cost in the minds of many consumers.