igniting business growth - white paper

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Page 1: Igniting Business Growth - White Paper
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Executive Summary

The explosion of data collection has given marketers powerful new tools and

analytics with which to target communications to the right audiences, track

customer preferences and comply with the growing body of privacy regulations.

However, while many companies assume today’s data revolution is better-suited

to using with new and emerging marketing channels – such as search engines,

email, and mobile – that’s an unwise conclusion: Direct mail is still a critical

and powerful channel that allows sophisticated marketers to use data to more

effectively reach existing and prospective customers.

Though direct mail may seem a little “old school,” it continues to offer large and small companies many benefits that newer forms of marketing cannot. According to Winterberry Group’s Bruce Biegel, marketers will continue to invest in direct mail to the tune of approximately $50 billion.1 By using data wisely and selecting the right data provider, companies can better segment their direct mail lists and ensure the right message is reaching the right audience at the right time.

Direct mail is not dead! In this report we’ll explore three reasons why direct mail is a critical component for supporting effective database marketing efforts, improving response rates, reducing marketing costs and learning more about your customers. It will also provide key tips for choosing not only quality data, but the right data, in order to enhance the effectiveness of your database marketing.

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Direct mail is a critical component of database marketing that’s responsible for reaching the right customers and prospects, driving results and ultimately growing businesses, large and small, across a range of industries. It’s one of the most effective tools for targeted database marketing.

Biegel, Bruce. “Outlook 2012: What to Expect in Digital and Direct Marketing.” Winterberry Group. October 2011. PowerPoint. Web. February 2012. <http://www.slideshare.net/nich_marketing/winterberryoutlook-2012>.

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Why Web 2.0 Marketing Can’t Replace Direct Mail Marketers are increasingly spending more of their budgets on new and emerging channels, such as search engine marketing, mobile and social media, as they try to better engage online audiences. These channels are indeed appealing because they offer more personalization, less deployment time, and potential cost savings by eliminating printing, postage and material costs. Yet, despite these advantages, direct mail continues to offer time-tested benefits that these newer channels do not. It allows marketers to reach different audiences through highly targeted communications and connect with prospective customers in a more intimate way. By leveraging high-quality, targeted data, marketers can effectively integrate their online and offline marketing efforts, including direct mail, and engage with consumers more effectively.

Savvy database marketers – from small businesses to the world’s largest, most recognizable brands – understand that a marketing program that in-cludes direct mail drives results. Google, one of the world’s most respected and valuable brands, doesn’t rely solely on email, Internet ads and social media to market its products and services. In fact, for its pay-per-click ad product offerings, it pours millions of dollars into traditional marketing, including direct mail. Other well-known brands – including Microsoft, Amazon, Starbucks and Dell – continue to invest in and grow their brands through database marketing that incorporates direct mail. Sure, these companies have millions to spend. But even small and mid-sized companies with smaller customer databases and far lower marketing budgets can – and do – leverage direct mail to reach customers and prospects. They do so because direct mail presents a tremendous opportunity to grow businesses by tapping into highly targeted data to present the right message and offer to the right customer or prospect – and at the right time in the buying cycle.

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Google, one of the world’s most respected and valuable brands, doesn’t rely solely on email, Internet ads and services. In fact, for its pay-per-click ad product offerings, it pours millions of dollars into traditional marketing, including direct mail.

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Three Reasons Direct Mail Improves Database MarketingThere’s a good reason direct mail has been around for decades: It’s a time-tested, proven approach to marketing that helps companies increase revenue and bolster the bottom line. Below are three more reasons why direct mail should be in every database marketers’ arsenal of tools.

Reason #1: Direct Mail Allows for Better Precision Targeting.

Spending on digital marketing channels has increased rapidly in recent years. However, it is important to realize that these channels haven’t re-placed or eliminated the role of direct mail. One key advantage of direct mail for database marketers is the ability to reach highly targeted customer segments and then tailor the message to specifically fit their needs. While generic mass mailing is not a sound marketing strategy, the evolution of consumer data collection and analytics allows direct mail to be an effective tool for customizing communications to targeted groups – also known as precision targeting.

As discussed in the Cast a Smaller Net: Simplifying Lead Generation report, precision targeting allows companies to reach their target audiences with greater accuracy, whether it’s pregnant women, single women who own cars, new mortgage owners in Atlanta, newly divorced, or high net worth males in Seattle.2 It allows for filtering of data by purchase and lifestyle behavior, demographics, location or a custom select – such as discretionary spending, social network influence, green buying habits or a shopper’s risk assessment score – so marketers can reach the right prospective customers and ultimately grow their customer base. Too often companies use poor-quality data or don’t properly segment data, thereby missing the opportunity to personalize and present each person with a

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Another benefit to direct mail when it comes to precision targeting is that it can gain access into target customers’ and prospects’ homes or businesses without facing same hurdles, such as spam filters and do-not-call lists, that interfere with other types of marketing.

Butler, Jason. “Cast a Smaller Net: Simplifying Lead Generation.” Goldleaf Data Corporation. Web. 2012. <http://www.goldleafdata.com/enewsletter/icontact/021312/landing/whitepaper/>.

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relevant message that captures their attention. This is one the most common reasons direct mail is labeled as ‘junk mail’ or deemed ineffective.

Another benefit to direct mail when it comes to precision targeting is that it can gain access into target customers’ and prospects’ homes or businesses without facing the same hurdles, such as spam filters and do-not-call lists, that interfere with other types of marketing. This leads to higher penetration of the target audience and more efficient use of marketing dollars and can ultimately mean better response rates.

Reason #2: People Prefer and Trust Direct Mail Communications Over Email.

Increasingly, marketers face data governance challenges due to consumer privacy and data security issues and regulations. The lower regulations around usage of data for direct mail, combined with it being a preferred and trusted communication channel, builds a favorable case for using direct mail as a key element of a database marketing program.

Findings from an envelope open-ability study found that mail – not email – remains consumers’ preferred method of communications for content such as catalogs, brochures and coupons. Furthermore, the study found that mail is more likely than email to be considered secure, confidential and delivered from a trustworthy source.3

While email is convenient and accessible on all sorts of personal devices – tablets, smartphones or computers – many people’s inboxes get over-crowded with marketing-related emails that ultimately end up unopened and unread. Moreover, marketing emails can get caught in spam filters and some consumers worry about them unleashing crippling computer viruses. On the contrary, information delivered to the traditional mailbox by the U.S. Postal Service is trusted and perceived as credible. DM News recently highlighted findings from a study finding that 50 percent of U.S.4

4Schiff, Allison. “Study Fifty Percent of Consumers Prefer Direct Mail to Email.” DMNews.com. 1 December 2011. Web. 15 February 2012. <http://www.dmnews.com/study-fifty-percent-of-consumers-prefer-direct-mail-to-email/article/217968/>.

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Leflein Associates. “Envelope Open-Ability Study.” Commissioned by Pitney Bowes. March 2010. PowerPoint3

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consumers prefer direct mail to email. Furthermore, it found that 60 percent of consumers enjoy checking their home mailbox, suggesting an emotional connection to actual mail and a stronger attention-grabbing ability.

Using direct mail strategically and with precision targeting allows marketers to avoid having their messages buried among the volumes of emails flooding consumers’ inboxes, which inevitably leads to low open and response rates. It allows them to be viewed as a more credible source and more captivating — coming from the mailbox. So even though direct mail may not be an emerging digital media, it is a proven one for acquisition and retention.

Reason #3: Direct Mail Complements Other Communications, Creating More Effective Campaigns. A key characteristic of effective database marketing is incorporating cross-channel strategies that reflect an understanding of where customers or prospects are within their purchase journey – whether becoming acquainted with a company’s brand and its product offerings, evaluating and considering a purchase from a company or its competitors, or enjoying the brand experience as a loyal customer. Marketers can then identify each consumer or consumer segment’s preferred communication channel and direct relevant offers through it.

Direct mail is often a central piece of a cross-channel marketing strategy. It acts as a trusted touch point, a catalyst for driving customers and prospects online or being the first contact within a communications strategy that includes other channels, whether personalized emails, outbound telemarketing calls or social media engagement.

Direct mail should never act as a standalone, one-time marketing initia-tive. Rather, as a trusted vehicle, it is an extremely effective customer tool for engaging customers when deployed in conjunction with an integrated plan comprised of traditional, direct and digital tactics. For example,

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In today’s digital age, the synergy generated from a multi-touch, cross chanel campaign positions an organization for creating maximum impact. Utilizing direct mail as one of the contact strategy elements is a proven tool for building and nurturing customer relationships.

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direct mail can be used to target individuals who have opted-out of on-line communication channels. However, the reverse – and more common – scenario is for companies to leverage direct mail to drive online traffic. Google’s pay-per-click advertising campaign integrates direct mail to steer potential customers online to enter a one-time code to redeem $75 of free pay-per-click advertising. Retailers who send catalogs may not expect someone to call or mail in the order, but they view the mailing as an awareness piece that triggers and generates more interest in their brand. Interested prospects are then more likely to go online to shop and complete a purchase. A company’s social media presence – whether with Facebook “likes” or LinkedIn and Twitter followers – can also be propelled by direct mail. For instance, a company might send customers and prospects a discount code or other promotion in order to motivate them to visit its Facebook page or other social networking profile, in hopes they will follow or subscribe to it. In other words, direct mail can complement other communication strategies – whether email blasts or telemarketing calls – and ensure the reach and repetition of the message while building its brand and relationships with existing and prospective customers.

In today’s digital age, the synergy generated from a multi-touch, cross-channel campaign positions an organization for creating maximum impact. Utilizing direct mail as one of the contact strategy elements is a proven tool for building and nurturing customer relationships.

How Can Data Improve Direct Mail Effectiveness? Data is channel agnostic. It is the foundation for any database marketing initiative, whether direct mail, telemarketing or email. All too often data is collected and housed in a database but is not utilized in a way that maximizes its potential for the marketer. The marketing communication strategy may thus be deemed unsuccessful, when it is really the data choice that needs re-evaluation. Core to ensuring a

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Database marketing isn’t only about quality data – data that is current, accurate and reliable – but it’s also about identifying the most relevant data type based on where your prospect is within his or her purchase journey to ensure your company makes a connection that is purposeful and effective.

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successful direct mail campaign is understanding how to leverage data or, in some cases, how to select data for purchase. Next-generation database and analytics solutions, for instance, can filter data for an increasing number of consumer variables and drive favorable responses.

Here’s just one example of how quality data aids direct mail campaigns: A marine products retailer wants to reach potential buyers of boat parts and accessories, such as anchors, life vests, and GPS systems. Its data provider allows it to select various types of data, such as “consumer,” “trigger” or “co-registration”. Consumer data, for instance, would include records of boat owners based on the tenure of their ownership, such as at least 10 years. Trigger data is based on past purchase behavior and such data file would contain records of individuals who recently bought a boat – say, within the past 30, 60 or 90 days. Co-registration data records might include individuals who have subscribed to Sports Illustrated magazine and, in the process, specified inter-ests they’d like to hear from Sports Illustrated partners about – in this case boating. They may or may not be boat owners. For the marine retailer, not all three types of data are equally relevant and valuable. The consumer data likely has the highest probability of producing the best results because actual boat owners – in this case, people who have owned boats at least 10 years – will be more likely to buy replacement boat parts or upgrade accessories than

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people who bought boats recently who are included in the trigger data. These individuals likely purchased all the necessities at the time of purchase. The co-registration data could be somewhat useful as well, but the records may or may not be for actual boat owners.

Understanding who the company wants to communicate with is the first order of business. Second, securing and working with high-quality data is paramount to success. Third, selecting the right data – such as trigger, con-sumer or co-registration -- is critical. A trusted data partner helps its clients understand and select the most relevant. option to ensure the most successful marketing effort. Database marketing isn’t only about quality data – data that is current, accurate and reliable – but it’s also about identifying the most relevant data type based on where your prospect is within his or her purchase journey to ensure your company makes a connection that is purposeful and effective.

Conclusion: Direct Mail is Not Dead! Despite the increasing migration toward new and emerging marketing and media channels, direct mail still plays a critical role in helping companies reach consumers they otherwise would not reach and be seen as a more trusted, credible source. Though it may be tempting to abandon direct mail given modern alternatives, it’s not generally a smart decision: When executed with quality, well-suited data, direct mail helps companies, large and small, create more effective, integrated communications strategies that build strong, lasting and engaging brands.

Reason #1: Direct Mail Allows for Better Precision Targeting.

Reason #2: People Prefer and Trust Direct Mail Over Email.

Reason #3: Direct Mail Complements Other Communications, Creating More Effective Campaigns.

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© Copyright 2012 Goldleaf Data Corporation. All rights reserved. 9

About the Author Jason Butler serves as the President and CEO of Goldleaf Data Corporation. Jason has a proven executive management track record and over 15 years of experience driving sales growth in the database marketing industry. Since Goldleaf ’s inception, it has provided database solutions for some of the most recognizable brands, including Lowe’s, Citicorp, Chase Manhattan Bank, Pottery Barn, ADT, AT&T, American Express, Verizon Wireless and many others. Jason’s vast experience within the database marketing industry has allowed him to build a rapidly growing organization focused on driving results through collaboration, partnerships and relationships.

ContributorsThis report was prepared by Goldleaf Data Corporation. Contributors to this paper under the guidance of Jason Butler include the team at C.E.K. & Partners, a Carolyn Kopf Inc. company.

About Goldleaf Goldleaf Data Corporation is the market leader offering high-quality new mover, consumer and business data serving Fortune 500 and small businesses. The company provides marketing services support with their comprehensive data solutions: mailing lists, sales leads, direct mail, telemarketing, email marketing, data modeling and analytics. Contact data from Goldleaf maximizes customers’ marketing efforts.