Direct marketing is a science, not just a one size fits all approach
With so much consumer choice these days and so many ways you can buy products and services, advertising is often an educator as much as a sales tool. While direct marketing has long received bad press due to cold calling and direct mail, it is fair to say that most of the large blue chip organisations invest heavily in understanding more about their target market so they can be as relevant and personal as possible. Obviously, by doing this, organisations will increase their success rate, but if we accept that direct marketing is part of life then it's fair to say that implementing best practice marketing programmes is a good thing.
When companies carry out Customer Segmentation they are trying to group their customers into types of people that look similar. The most basic method of segmentation is to group the customer database by using RFM analysis (Recency, Frequency and Monetary value). Here customers are grouped according to when they last bought a product, the frequency of purchases and the amount spent. Beyond this, offers can be personalised by understanding more about what products customers tend to buy. For example, if a regular customer is starting to buy nappies it is clear they will have recently had children so it would be very relevant to start sending baby product offers to them. Amazon has led the way with online personalisation over the last five years by monitoring what their customers have browsed and bought.
The channels available to buy and sell have a direct impact on how companies are marketing to customers. Take the catalogue business for example; while many catalogues still exist and some businesses are actually seeing an increase in catalogue sales, most of this market has moved online over the past five to ten years. So where direct mail used to play a big part in marketing to customers, businesses have had to adapt to cope with the shift in buyer behaviour. This means not only building a website to sell products (a significant undertaking) but also to start marketing the online business in a different way.
With online marketing there are so many more channels than one may think. An online business can use email, display, Pay Per Click (PPC), Search Engine Optimisation (SEO), Affiliates and Social media marketing. This is before we even move onto re-targeting which is where you either see a display advert promoting something you previously looked at but didn't buy (scary stuff) or receive an email offering a promotion on a product you started to buy (by putting a product into your online shopping basket) but for whatever reason didn't complete the purchase.
For retail businesses that operate online and offline there is increasing challenges around marketing, service and delivery. Understanding customer data through analysis is fundamental for making key business decisions to support the effective running of any business, but even more so for a multi-channel retailer. Many retailers carry out Geographic Segmentation to understand more about their customers in relation to their stores. It has been proven that consumers who spend across different buying channels tend to spend more overall, so understanding how online and offline work together is key for retailers. Buying trends have changed with many younger shoppers now looking in-store then purchasing online where they may get a better deal and there are now options such as click and collect where you can buy online and collect in-store.
What is clear is that direct marketing is an advanced process and involves much more analysis in order to implement best practice communication programmes. With the growing resistance to telemarketing and direct mail, the growth of online marketing has become even more advanced. The industry is supported and regulated by the Direct Marketing Association (DMA), however in the digital age there are often new ways of marketing that are yet to be properly understood and regulated. This in turn is leading us into new territories relating to privacy and use of personal information. Whilst there needs to be regulation, there is still a need for direct marketing, which can deliver value when done with best practice in mind.
When companies carry out Customer Segmentation they are trying to group their customers into types of people that look similar. The most basic method of segmentation is to group the customer database by using RFM analysis (Recency, Frequency and Monetary value). Here customers are grouped according to when they last bought a product, the frequency of purchases and the amount spent. Beyond this, offers can be personalised by understanding more about what products customers tend to buy. For example, if a regular customer is starting to buy nappies it is clear they will have recently had children so it would be very relevant to start sending baby product offers to them. Amazon has led the way with online personalisation over the last five years by monitoring what their customers have browsed and bought.
The channels available to buy and sell have a direct impact on how companies are marketing to customers. Take the catalogue business for example; while many catalogues still exist and some businesses are actually seeing an increase in catalogue sales, most of this market has moved online over the past five to ten years. So where direct mail used to play a big part in marketing to customers, businesses have had to adapt to cope with the shift in buyer behaviour. This means not only building a website to sell products (a significant undertaking) but also to start marketing the online business in a different way.
With online marketing there are so many more channels than one may think. An online business can use email, display, Pay Per Click (PPC), Search Engine Optimisation (SEO), Affiliates and Social media marketing. This is before we even move onto re-targeting which is where you either see a display advert promoting something you previously looked at but didn't buy (scary stuff) or receive an email offering a promotion on a product you started to buy (by putting a product into your online shopping basket) but for whatever reason didn't complete the purchase.
For retail businesses that operate online and offline there is increasing challenges around marketing, service and delivery. Understanding customer data through analysis is fundamental for making key business decisions to support the effective running of any business, but even more so for a multi-channel retailer. Many retailers carry out Geographic Segmentation to understand more about their customers in relation to their stores. It has been proven that consumers who spend across different buying channels tend to spend more overall, so understanding how online and offline work together is key for retailers. Buying trends have changed with many younger shoppers now looking in-store then purchasing online where they may get a better deal and there are now options such as click and collect where you can buy online and collect in-store.
What is clear is that direct marketing is an advanced process and involves much more analysis in order to implement best practice communication programmes. With the growing resistance to telemarketing and direct mail, the growth of online marketing has become even more advanced. The industry is supported and regulated by the Direct Marketing Association (DMA), however in the digital age there are often new ways of marketing that are yet to be properly understood and regulated. This in turn is leading us into new territories relating to privacy and use of personal information. Whilst there needs to be regulation, there is still a need for direct marketing, which can deliver value when done with best practice in mind.
