Igniting Business Growth - White Paper

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  • 1. 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 todays data revolution is better-suited to using with new and emerging marketing channels such as search engines, email, and mobile thats 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 Groups 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 well 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. 1 Direct mail is a critical component of database marketing thats responsible for reaching the right customers and prospects, driving results and ultimately growing businesses, large and small, across a range of industries. Its 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. . 1
  • 2. Why Web 2.0 Marketing Cant 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 worlds largest, most recognizable brands understand that a marketing program that in- cludes direct mail drives results. Google, one of the worlds most respected and valuable brands, doesnt 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. 2 Google, one of the worlds most respected and valuable brands, doesnt 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.
  • 3. Three Reasons Direct Mail Improves Database Marketing Theres a good reason direct mail has been around for decades: Its 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 havent 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 its 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 shoppers 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 dont properly segment data, thereby missing the opportunity to personalize and present each person with a 3 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. . 2
  • 4. 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 peoples 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. . 4 Leflein Associates. Envelope Open-Ability Study. Commissioned by Pitney Bowes. March 2010. PowerPoint 3
  • 5. 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 companys brand and its product offerings, evaluating and considering a purchase from a company or its competitors, or enjoying the brand experie