Benefits you can expect from being direct

Businesses can use direct mail to lower marketing spend and retain and win customers

29/03/2010

With all the noise about social media, email marketing and mobile marketing, you could be forgiven for believing direct mail (DM) had gone the way of the dinosaurs. The truth is very different, however. A recent survey (Business Research - Amárach, January 2010) found that despite the growth of these new marketing channels, direct mail is, if anything, growing in popularity among marketers, writes Amie Peters.

The study found that:

In 2009 more Irish marketing spend moved from above- to below-the-line;
83% of marketers said that direct mail was important in meeting their business objectives;
And 27% planned to increase their direct mail spend in the next 12 months.

The reason direct mail remains in vogue has nothing to do with some romantic attachment to paper; it's because DM has proven again and again that it can achieve the cut-through marketers crave. Moreover, when canvassed for their views, most people will say that direct mail is something they value. According to recent studies (Direct Mail - Consumer: Amárach, July 2009; Ipsos MRBI Household Diaries), two thirds (66%) of Irish consumers read direct mail in 2009, up from 59% in 2007; 43% feel direct mail is an effective way to communicate with them; and 33% say it's a trigger to purchase.

A surprising finding of the same research is that younger people are particularly receptive to direct mail. Not only does a large majority (64%) of 18-34 year olds like to receive addressed mail, but more than four in 10 (41%) see DM as a trigger to purchase. So while the social media generation might love their mobiles and Facebook pages, they have not turned their back on traditional media - far from it. Where they see value in it, they are more than willing to engage. And this value message applies right across the consumer spectrum. In fact, one of the lessons for marketers in the current downturn is that consumers always love deals but in a recessed economy they love them even more.

The implications for brand marketers are profound. A few years ago they could pump large sums into mass-media campaigns safe in the knowledge that they would recoup their investment when consumers paid that bit extra for those heavily supported goods. Today no such certainties exist, so marketers have to find new ways to keep customers loyal.

One way they are doing this is by investing more money in customer satisfaction and retention programmes. Satisfied customers are less likely to switch brands. They are also less likely to switch brands if they feel a personal connection to the company. Direct mail offers the chance to create personal communication - especially with the benefits of digital print and database marketing.

Not only does direct mail tick the ‘customer loyalty' box, it won't break the bank while doing so. By focusing on a smaller group of individuals who are more likely to respond to your offer, direct mail delivers more bang for your buck.

But no matter how good your customer loyalty programmes are, it is inevitable you will lose some customers along the way. So you can't ignore the customer acquisition side of the equation either. There are a myriad of ways to win new customers, from placing ads in national newspapers to cold-calling them. The trouble is: people are being bombarded with offers the whole time, why should they listen to yours? Direct mail can help here, too. It is the only medium that cuts through the clutter and puts your message directly into the hands of your target audience - be it the end consumer or a business-to-business prospect.

But you need to know who you are targeting. This is why the quality of your own customer database is vitally important and it's something you should be striving to improve all the time. This can be done by, for example, adding demographic data (such as age, gender, marital status and lifestyle interests) and analysing the results to reveal customer characteristics you were previously unaware of - helping you to target new customers more efficiently.

Data is one of four ingredients for DM success. The other three are:

Messaging

A one-to-one method of communication allows you to engage with your customers in a different way. Use the information you have to personalise the message and make it as relevant as possible. Don't forget to provide a real incentive - direct mail works by getting your prospect to respond to an offer. Finally, make sure your call to action is clear and you give your audience lots of ways to take up the offer.

Testing

Every DM campaign is an opportunity to test what works best for your target group. Although it can be tempting to target your whole customer base, testing smaller segments is more effective. You can test messages, offers, timing or redemption channels but only test one element at a time. And always set up a control group who match the target audience profile.

Response analysis

Response rates will vary greatly depending on a variety of factors including targeting, timing and offer. Ongoing testing will enable you to forecast a realistic response rate and grow this response rate over time.

Finally, don't forget to check postal rates. There are savings to be made with a variety of mailing products. Plus, did you know that you have a total weight allowance of 100g? That means you can include twice as much without paying more postage. Twice as many offers. Twice as many competitions. Twice as many relationships to build. Twice as many happy customers. And, quite possibly, twice as many sales when the campaign is over.

Amie Peters is head of direct mail at An Post.

View the original article at Business & Finance