Kieran Kilmartin (pictured) looks at how much life is left in the classic channel.
The term ‘direct marketing’ often conjures images of mass mailers and other outdated, impersonal attempts by brands to reach their target audience. Today, brands that engage in this form of traditional direct marketing outreach are being eclipsed by marketers who use more innovative and personalised approaches. Ever evolving technology has created a plethora of channels for customers to communicate with brands, and the rapid shift in communications mediums has caused marketers to wonder: “is direct marketing dead?”
Dead? No. Being turned on its head? Yes.
Direct marketing is at a turning point and, as technology continues to change the way brands and consumers connect, the term becomes more relevant. For example, one monumental shift brought on by new technology is the “always-on consumer”, who is more digitally connected than ever before. As evidenced by the fact that nearly half of adults in the UK complete tasks on other devices while watching TV, connected consumers’ multitasking has opened the door to new marketing opportunities. This near constant connection provides brands with not only more customer touchpoints to build awareness of a brand’s product and message, but also with an increased amount of customer data that reaches across multiple channels. With an abundance of customer data available to brands, marketers can be smarter in how they approach customers and create a more personalised interaction that is closer to the true definition of the phrase “direct marketing”.
Informed interactions and personal relationships
Now, more than ever, customers expect personalised relationships with brands. To maintain customer loyalty and foster new customer relationships, direct marketing must shift to line up to meet these expectations or risk alienating customers who are tired of being treated impersonally.
While direct marketing’s new form is more challenging to master, when properly executed the benefits far exceed those of traditional push marketing campaigns, because customers are more accurately targeted with communications that speak to their specific needs. The engine that is driving direct marketing success today is Big Data and brands that are leveraging it to make sense of all of the data from their channels to pull customers in are breathing new life into their direct marketing campaigns.
That being said, while Big Data can provide the information necessary to create more direct, personalised interactions that customers demand, brands aren’t necessarily taking advantage of the opportunity at hand. Recent research shows only seven percent of marketing departments are taking control of Big Data, with a majority of its usage still residing in IT, which presents a huge market opportunity. Given the small percentage of marketing departments that are truly leveraging their data at present, brands that are able to explore and analyse all of the data at their disposal and turn insight into action will gain a distinct competitive advantage. However, the same research showed that organisations are not oblivious to utilising their data, as 53 percent of companies surveyed were using Big Data for customer relationship management. It’s apparent that brands are starting to recognise the shift in customer expectations and the importance of connecting with customers, but they have been slow to use data throughout the entirety of their marketing organisations.
With this recognised shift in brands’ customer communications, how can brands take advantage of the customer knowledge provided by Big Data to improve their marketing programmes?
As a starting point, brands should let these five key data-driven processes lead their customer communications:
- Understand the customer as an individual – Their preferences, event triggers and lifecycle with the brand
- Connect with the customer via multiple touch-points – Knowing customers’ habits surrounding those channels and which they prefer is key
- Micro-segment customer data – Enormous amounts of customer data may seem overwhelming but it enables refined segmentation based on customer behaviours, in turn allowing brands to ensure the message is relevant to each individual
- Plan automated, integrated, multi-stage, cross-channel initiatives that are informed by the above and are reactive to response rates. Rather than marketing ‘push’, brands are able to engage in conversation, pulling customers to the brand due to their unique needs.
- Monitor and measure – Marketing campaigns have used systems such as A/B testing to test the effectiveness of a campaign for years, so why wouldn’t brands do the same under the new definition of direct marketing. Using control groups can determine the most effective campaigns, which enables companies to measure response rates and success and continually improve on how customer data is being used.
The phrase direct marketing still sparks traditional push marketing concepts in the minds of many but, in reality, direct marketing is only just coming of age. This new form of direct marketing is more direct than ever, as it allows for an individual connection between brand and consumer. As new technologies continue to emerge, such as near field communications and advanced recognition technology, direct marketing will continue to shift and change to be more real-time and customised. Brands that embrace this new form of marketing and take full advantage of the benefits of Big Data to better understand their customers will come out on top.
Kieran Kilmartin is VP International Marketing, Pitney Bowes Software.