TARGETING & SEGMENTATION
Introductory marketing teaches us to make several assumptions and generalisations on the market. Top on that list, it is vital for a brand to narrow its target audience down to a set of demographic qualities based on age, sex, income etc. Even a brand like Coca-Cola, which has near universal appeal, targets their product toward youth. Beyond the target market there will be a number of market segments, again defined by geo-demographic characteristics. In traditional marketing, defining a market and its segments will build a picture of an audience which impacts on both the creative employed and the media buying strategy.
Do these methods of targeting and segmentation translate into Direct Marketing?
In fact, they’re surprisingly unimportant. What’s important is that communications are relevant and are therefore based on real customer knowledge rather than generalisations. A unique creative approach for each customer tends to be cost-prohibitive and unrealistic (yes, in some niche business-to-business exercises it may be feasible). Some broad segmentation should be applied to drive the bulk of the creative outcome. These segments must work alongside copy change-outs to complete the communication. But this is a secondary concern.
Even the act of segmentation is different in Direct Marketing because it is developed from hard customer information rather than market research. To segment a database, data-mining techniques that account for combinations of every possible information variable are used (including transactional data), rather than a broad geo-demographic profile. But the segmentation is just the beginning, the driver for the message platform and tone & manner.
PERSONALISATION & RELEVANCE
Direct Marketing talks to individuals, not markets. This is where traditional targeting methods fail when they’re bolted on to Direct Marketing. Instead of broad segmentation it is critical we appreciate that each customer is unique. So we must utilise every piece of information to make the message more relevant and effective.
For a start, it is proven that simple personalisation (such as prominent placement of name and address), will significantly increase response rates. Using transactional data and linking your message with a customer’s known behaviour is more powerful again – it shows you understand the customer and that you’re adapting your product or service offering for their needs.
Building a tailored approach makes for multiple copy versions within a single segment execution. But the additional effort and expense is worthwhile for its immediate impact and response, as well as the long-term benefit to the brand.
Using the available data to better personalise and add relevance to the communication should be a key distinction in personalised marketing efforts versus mass market communications. It will also make for better targeting as there will be situations where a relevant link cannot be made and some customer groups may be eliminated from the distribution. It makes the customer feel like you’re delivering them a service. While all direct communications make a noise, those that communicate service are the messages people absorb. They make the recipient feel like more than just another customer. The communication has considered the individual and they feel privileged to receive your message. Just as important, the restricted and more responsive audience will result in decreased costs, improved ROI and protection of the brand.
ADVERTISING VERSUS CUSTOMER SERVICE
Customer service is what finally differentiates direct communications from Traditional Advertising. In direct, the media is the property of the recipient so it’s important there’s something in it for them. An ‘ad in an envelope’ (or worse still, an ad in an email or text message) becomes an annoyance. If you address something specifically to an individual, they expect that communication is about them rather than some irrelevant chest-thumping about your product or brand. Far too often the traditional marketer’s view of integration is to put a stamp on their ad. Or thoughtlessly email or SMS the body copy to all their customers.
This hurts the entire Direct Marketing medium because consumers become tired of irrelevant messages intruding into their private space.
The best customer service messages hit customers at the right time in their relationship. By contrast, traditional advertisers bring a ‘campaign mentality’ to Direct Marketing. Following this thinking, all customers receive communications at the same time. The truth is relevance is more easily created with triggered messages driven by customer behaviour. Reputable direct marketers are acutely aware of this and explore database activities that promote a new product or service while also delivering a service message to customers.
Electronic communications that are activity driven are particularly useful for time-sensitive service messages. It can actually add to customer convenience to receive email or text messages. And for the marketer the business opportunities are endless. Imagine if your insurance company could text message you in advance of a localised flood warning, or if your bank could email you to advise your credit card was approaching its credit limit. Customers are thankful for these communications; they provide a tangible benefit for engaging and opting to receive electronic communications.
Nothing compares to direct for delivering this information. Particularly in an electronic format because they are both directed to an individual and are time-critical. These newly formed channels supplement the existing communications mix and exist for the customer’s benefit. They are not simply substitutes for traditional messages in an effort to save marketing costs with no thought for what the customer would prefer.
The creative boundaries within Direct Marketing are yet to be reached and the majority of executions fail to explore the possibilities of the medium. This is a hangover from the frequency principle employed in traditional advertising and the false notion that direct executions are about the brand first and the message second.
With Direct Marketing the customer owns the message and will actively choose whether they take it in. The execution needs to immediately show the recipient that it’s a completely new message and to this end, the communication should be clearly distinct from previous contact. The message should retain consistency to the degree that it is obvious who it’s from, but the message must scream above the corporate branding. A template approach is often employed, meaning that visually the messages blur together with a degree of sameness rather than being received with impact. But designers are not Direct Marketers.
No other medium offers the creative freedom of direct mail. Yet most direct mail fails to engage the senses and is lost in a sea of white window DL envelopes. Customers receive mail from a number of places and to engage an audience the execution needs to stand apart. Mail offers unparalleled flexibility in terms of format – there are practically no size or shape constraints. Perhaps it’s because Traditional Advertisers and designers are used to fitting into standards dictated by a medium (press, billboard, TV) that they treat direct mail the same way. They see an A4 letter and a DLE insert as a starting canvas whereas the reality is an open book.
Creative freedom also suffers where marketers are guilty of trying to get their message to as many people as possible rather than improve the targeting. We all know Pareto’s Law or the 80/20 rule, yet too often the entire database is treated as equal. By focusing on just the top customers or prospects and delivering a stronger, non-standard creative execution the message can be made more compelling and results magnified. A smaller, targeted audience will result in more to spend on those that count. An improved per-unit budget allows things to be done differently, ensuring the communication is not just read but also remembered and acted on.
Direct Marketing is not simply about creating awareness, it’s about delivering results, creating new customers and selling more to them. As shareholders and CEO’s demand a return on investment, it’s understandable that marketers are turning to Direct Marketing for answers. It’s here that they need to pause and note that Direct Marketing is a unique craft and counter-intuitive to Traditional Advertising thought processes. Until they rethink, the credibility of Direct Marketing will suffer through poor executions.
The potential of Direct Marketing is clear. Despite traditional thinking leading to sub-optimal planning and executions, many businesses have still generated positive returns from their Direct Marketing. But they have merely scratched the surface of what can be achieved. With the right assistance there remains potential to unlock increased returns and improve long-term customer satisfaction.
To make Direct Marketing work, marketers need to grasp the unique complexities of the media. The explosive growth and competition for the customer’s time will challenge marketers, demanding stronger executions to break through the clutter. All businesses looking to maximise a return from marketing should elicit the help of a true Direct Marketing specialist. Do this and these businesses will not only improve their success, they may profit where they had previously failed. Direct marketing does work… in the right hands.