Evolution of direct marketing
Last year, an industry insider said that “all marketing will become direct marketing.” But direct marketing itself is changing rapidly and dramatically as two important trends are influencing the thinking of marketers:
- Response rates are low and going lower
- Companies with more individualized messaging are seeing distinctly improved results. The figure shows the evolution we see.
- Spray and Pray — everyone gets the same message
- Segmentation — different groups get different messages, perhaps based on SIC codes or some collection of demographic variables such a those that define Baby Boomers
- Personalization — recipients are addressed by name
- Customization — goes beyond Personalization by, for example, showing a map to the nearest store depending on zip code, or by using different images appropriate to a recipients interests
- Individualization — true one-to-one marketing with different products and different discounts offered to different recipients, usually based on predictive analytics
As campaigns grow more individualized, executing them becomes more difficult and complex. You might need six headlines instead of one. All of that variable information needs to move to the printer or email service provider, a distinctly non-trivial task. The reason we support this additional effort (and cost) is that the Marketing Return on Investment grows because the response rate shoots up even faster than the added cost. We have documented case studies proving that individualization and true 1:1 marketing produce significantly higher returns; they more than pay for themselves.
So why aren’t more companies jumping to adopt true 1:1? We see two reasons:
- They don’t have the staff and skills necessary for the requisite logistics and predictive analytics, or
- They are concerned about risking their current revenue stream by switching tactics.
To the first reason, we have a straight-forward answer: ask us for help. The techniques we use are spelled out in detail. The second reason is more difficult to overcome, but certainly is not a game-stopper. Keep doing what you are doing now. Don’t stop. But do introduce some 1:1 campaigns into your mix until you are convinced. It won’t take long before you are converted.