Used effectively direct marketing gives the user the ability to identify precisely the impact of any promotion. In doing so it establishes a strong foundation upon which future successful activity can be built.
Within the retail sector for example, it provides the opportunity to develop strong one to one relationships with customers, which in turn generates greater loyalty and higher value.
No matter what sector you’re in, if you need to reach customers and prospects under the radar of your competition, there are 7 basic but essential steps to take to maximise success.
1: Have a clear objective. Frequently this is to raise sales, but is it to produce profit or to shift stock or perhaps retain customers who are lapsing or a combination of objectives?
2: Sounds obvious, but be aware of the cost of delivering the promotion remembering to cover everything which could be included such as data lists, postage, creative design etc.
3: Calculate the volume of incremental/additional sales required to break even. For this you will need to know the full cost of the promotion, your ATV, margin and average frequency of purchase.
4: Make a judgement on the probability of achieving the required level of incrementality. e.g.:
- 20% highly likely
- 50% probable
- 100% possible
- 200% less likely
- 500% highly unlikely
If it’s highly unlikely then reassess your approach before spending your marketing budget.
5: Make sure you designate test cells against which measurement can be made so that you can see where added value is coming from. A typical split might look like this:
- Not mailed
- Mailed with basic proposition
- Mailed with enhanced proposition
- Mailed with different creative
6: If possible segment the customer base into essential categories and include variable messages recognising the differences. Research from the DMA suggests people are 7 – 10 times more likely to respond positively to well targeted and relevant communication. For example you would expect to talk to a high value customer differently to one you haven’t seen for over a year. A recency, frequency and value analysis will give you the platform to develop this.
7: You must have a clear call to action with a response mechanism and a robust method of capturing the responses as this is the only way in which you can measure the success of the activity and deliver meaningful analysis.
Following this routine will enable you to identify what works and what doesn’t and where changes are needed. With this as the basis you can begin to develop a very rewarding direct marketing strategy or programme which will, over time, become more sophisticated and potentially even automated. If you’d like to chat to us about how to get more from your marketing budget, get in touch.