Ideas You Can Take to the Bank!: Effective Communication
Never before have marketers had such a wealth of marketing tools at their disposal: unique information sources, innovative database platforms, advanced analytics and multichannel delivery vehicles. With such a variety of tools, how should marketers leverage their database to reveal new opportunities to gain optimal results?
You can maximize your ROI by developing a customer contact strategy that answers three key questions:
1) Who should I contact?
2) What channel should I use to contact them?
3) When should I contact them?
The answers to these questions are in your database. They represent a contact-strategy plan that uses all the resources in your database to maximize response and efficiency.
A customer contact strategy is an organization’s approach to planning, optimizing and executing customer and prospect communications with respect to all possible offers, channels and customer touch points. A strong program executes specific communications based on an understanding of the unique target audience’s characteristics, which drive response and purchase behavior.
Six Steps to Success
1. Leverage non-transactional data. Direct marketers need to look beyond who to target and focus on the how, what and when—dimensions that create optimal contact. This multi-dimensional approach requires leveraging additional sources to answer how, what and when to market. This information runs the full spectrum of attainable data, from demographics to attitudinal characteristics to observed purchase and behavioral data.
2. Determine the best touch point. Test whether or not a particular customer segment is more effectively contacted with direct mail or e-mail. An unbiased test might entail allocating a random number of direct mail and e-mail promotions to each group. Performing such a test in the hopes it will yield results that can be learned from and extrapolated for future use is a budget luxury few can afford. What if you could know ahead of time which customers or prospects within your target audience preferred e-mail versus direct mail? You would potentially eliminate one stage of the learning process, and increase the speed of your marketing cycle and incremental sales.
The ability to use field research, such as primary or secondary survey data, to identify insights such as the preferred method of communication and attitudinal triggers is rapidly increasing in the industry. Primary field research costs are coming down, as the ability to gather data via online panels is becoming more sophisticated. Implementation generally consists of matching a terrestrial name and address/geographic designation to a customer and/or prospect database. The survey information is used to create a desired “targeted” behavior, which is then modeled and extrapolated across the entire database.
3. Differentiate yourself. There are many solutions that identify who you should target, so much so that the industry has reached a maturation point with respect to defining and identifying the individuals or households in best customer and prospect audiences. In most mature industry sectors, such as financial services and catalog verticals, marketers are working harder to differentiate their brand and message from that of their competitors. Consumer contacts have risen faster than consumers have migrated into and out of a marketer’s target audience definitions.
For example, if a large fraction of the women’s apparel sector is targeting the 25- to 34-year-old female population with its brand, the consumers in that audience will have received more direct communications than we can fathom before they migrate to another audience definition, such as 35- to 44-year old females.
4. Seek new ways to stimulate response. In targeting practices where one or two responses in 100 mail pieces is considered a success, marketers repeatedly inundate the same audience with the same message—intentionally and unintentionally.
These same marketers are realizing there are greater gains to be obtained by finding other ways to stimulate response from one or two of the remaining 98 people in the target audience, as opposed to focusing on the refinement of an already well-defined target.
5. Calculate your optimal number of contacts. Marketers have long wrestled with what now seems like a basic question: How many times can I mail someone without eliciting a response before I should consider not mailing to them ever again? The proliferation of communication channels, such as the Internet, has further complicated this question.
By analyzing your customer contact history, you can establish a baseline for how people respond and under what conditions. This information can be used to answer questions such as:
• Once I have identified my target audience, what is the optimal number and sequence of communications?
• How many times should I send a direct mail piece?
• How many e-mails?
• Who should receive both direct mail and e-mail?
• In what order should they receive them and how often?
• Test multiple purchase influences.
An evolution is occurring within the direct marketing industry that sees us moving from making decisions based on point-in-time events to decisions based on longitudinal data. The old saying—”never test more than one thing at a time”—has become myth. The disciplines of experimental design—in which multiple purchase influences, or “factors,” easily are tested at one time—are making their way from the agricultural, healthcare, manufacturing and physical sciences to the new direct marketing ecosystem.
Unlike in manufacturing, a marketer cannot control all facets of its process. It is impossible to think we can solve a contact strategy problem the way a manufacturer can design an experiment to identify what part of its process can be adjusted and result in a 5-percent incremental yield in production. However, the fundamentals of experimental design are applicable.
In the last five years, the character and shape of direct marketing has changed. As we accept the paradigm of interactive, or one-to-one marketing, we no longer can ignore the importance of synthesizing data from various sources within our database—not just transactions—to drive relevant and highly targeted contact strategies. In developing an “optimal” customer contact strategy, marketers will explore customer dimensions that traditionally have not been thought of as actionable. Using these dimensions to address the challenge of sending “the right offer, to the right person, through the right channel, at the right time” will become necessary as the direct marketing ecosystem continues to evolve.
Marc Fanelli is vice president of Experian’s Customer Insight team. Experian is a global information solutions company. He can be contacted at firstname.lastname@example.org.