Newsletter…Direct Marketing

There is a greater opportunity for DM now than at any other time

Three reasons for this:

Firstly, media proliferation, increased segmentation, media creep, increased content, time challenged public, consumer cynicism, increased access to information etc

Secondly, and most importantly, the consumers “capacity enhancement’, eg Look at a Bloombergs screen or watch a 14 year old make a phone call, watch TV and be on the internet at the same time

Thirdly, the immediacy. increased response, infalable media metrics, enhanced media mining opportunities, dialog not monolog opportunities and more importantly dramatically lower cost of new technology communication ( simple example SMS)

Need for a paradigm shift in approach to DM

Most communication programs are still limited and simplistic in their approach to target groups who have moved on.  Most businesses/agencies still anchored in traditional marketing.

DM’s need to do a better job of communicating advantages of DM

Not just immediate sales results but data mining and multi channel approaches that continuously increase the dialog, the lifestyle connection and build a bridge in every communication between the  emotional desire to buy trigger and the pragmatic ‘show me the data as it applies specifically to me’ purchase decider.

What most DM’ers describe as “Cutting Edge” is not cutting edge at all.

Cutting edge is not more inventive stunts, personalisation, unique envelopes, creative ideas, better copywriting, more testing.  These are the basic minimums today of any DM.  DM today requires enhanced customer knowledge, improved data mining, more knowledge of the potential customer.

This is true whether using traditional vehicles – such as print, for example.

Today, variable data multichanneling enables data to talk individually to people using any channel.  For example, it allows for highly complex and highly creative direct mail packages to be fully personalised, with names, dates, an individuals usage information, savings, graphs, even photos etc. in headings and all body copy to be totally customized to every specific customer within a normal print run.

Examples include a program in September 2005 for a fixed line phone carrier who received a 36% response rate from a print DM using one to one variable data technology to over 340,000 customers, against a “traditional DM” response rate for a similar program of 1.7%.

Or using new communication vehicles.  Three simple examples:

SMS/Radio broadcast.

By tieing SMS response into radio advertising and radio station loyalty clubs, advertisers are data mining potential customers and interacting with them one-on-one to buy a pizza, attend an event or even enhance the radio audience at a specific time.  This cross communication DM is achieving responses of up to 38%.  This DM format is being widely utilized in US radio and television.

Upselling Chat.

Chat technology enables real time immediate post purchase on-line messaging and voice chat with permission, in order to upsell.

Behaviour Triggered Emailing –

Software analyses data, both real time and historical, to launch immediate automated opt-in campaigns based on in-store, catalogue, on-line purchases, biographical data, events, dates or customer behaviour.

Traditional response rates are no longer acceptable

Many DM’ers are getting response rates of 20+% and 30 and 40% rates are no longer uncommon.  Direct comparisons between an identical campaign using “traditional” methods and new variable data and new technology methods in some cases show increased performance of 2000%.

Need to be more analytical when choosing communication channels

As key product and service offerings become similar and response times to market change become shorter not enough direct marketers are using their skills to identify the communication channels that are having the most effect on influencing customer acquisition, buyer behavior or decision making, customer loyalty and retention and least of all providing ‘advice’, education and specific instance comparisons tailored to specific customers, as opposed to ‘hitting them with yet another creative message’

Some questions to ask yourself:

Do you fully understand the DNA of your existing customers?

How about your potential customers?

When did you last mine this information for trend patterns?

Can you tell me the ROI of the last 3 DM campaigns for a specific customer and how much this analysis improved each subsequent program as they were rolled out?

How sophisticated are your campaign measurement tools?

How inventive is your ‘in-program’ data capture?  Do not tell me “our systems will not accommodate this type of analysis”.  Without it you are cheating yourself, your client and setting yourself up to lose the account.

Summary

Your target consumer is able to consume more, having been conditioned to do so by technological advances.  If you think a short term clever stunt, mailer or communication of any sort can capture and influence this new mentality for more than a fleeting ‘entertainment interlude’ then consider that one on one, variable data, multi channel communications are performing at response rates in excess of 15-20%  not the traditional 1%-3% levels.

WHY?  Because increasingly focused personalized intellectual advice is far more effective and motivating over along period than a short term impact, no matter how clever.