Our world has radically changed. As target marketers, the increasing pressure to more effectively engage and retain valuable customers in a challenging economy while communication channels are exploding makes for a daunting dilemma. As consumers, the cacophony of marketing messages has risen to a deafening level with the advent of online marketing channels—social media, mobile, email, blogs—adding to the already crowded world of direct mail, print advertising, TV and radio.
In response, consumers are voting with their dollars and their attention. Many consumers have made it clear that it's more about the message—and knowing them and speaking to them individually—than it is about the medium. The era of mass messaging with irrelevant, cookie-cutter content is clearly over. Now, consumers are taking action.
With do-not-call lists, blocked messages and do-not-track actions, it's easier than ever for consumers to shut out and ignore marketers who use irrelevant content. Many consumers are taking disengagement a step further. A recent study showed that 41 percent of consumers said they would consider ending a brand relationship because of irrelevant marketing—and 22 percent already have. In other words, consumers are saying, "know me or no me." There is no more ignoring the relevancy mantra; the consequences for marketers are dire.
Look at the stats around direct mail with static content. Paper mail is estimated at six pieces per U.S. household per day, and an incredible 44 percent goes to the landfill. Email stats are even more telling: of 200+ billion emails sent each day, 97 percent are simply ticked off as spam.
Even when marketers have deeper engagements with customers, as with loyalty clubs and rewards programs, they often miss the mark in delivering meaningful messages, according to a survey conducted by the Chief Marketing Officer (CMO) Council and Ricoh. In fact, only 6 percent of consumers thought that the promotions received through loyalty club communications were based on preferences or past purchasing behavior.
The result of this mixed bag of messages is that marketers are missing the opportunity to drive loyalty and affect purchase intentions. In this regard, 30 percent of consumers stated they are inspired to do business with a company after receiving personalized communication. As target marketers, a potential 30 percent response rate is gold, pure gold.
So what should marketers do?
First, touch your customers with information precisely tailored for them when sending must-read documents, such as statements and invoices—which are opened by 90 percent of consumers. Targeted messaging leverages data-driven customer insights for relevant, engaging messages that appeal rather than irritate. Precision marketing turns sure-to-be-read documents into a new channel of communication by cutting through promotional and direct mail noise to positively impact customer loyalty and engagement.
Secondly, complement data-driven marketing messages with visual appeal-such as color instead of black-and-white print-and with an attention-grabbing design that drives action after the addressee opens the envelope.
Using this power duo, marketers can turn each step of an integrated marketing campaign into an opportunity to strengthen and grow customer relationships. Instead of plain statements and messages, create personalized, customer-centric communications that can help:
- Strengthen brand image and create competitive distinction;
- Improve bill clarity and reduce call center traffic,
- Use special offers to up-sell, cross sell and drive business results;
- Generate revenue by selling advertising space;
- Use personal messaging to build brand loyalty; and
- Strengthen and expand multi-channel marketing
Would 1,000% ROI Lift Matter to Your Company?
A large international hotel chain sought to gain insight into its inactive customer base and for recommendations on how to make the most valuable use of its data. Specifically, the challenge was to reactivate dormant customers who had not done business with the brand in one year. The job would obviously entail more than just sending a "we haven't heard from you lately" message.
The hotelier marketing and IT teams met with Ricoh to garner a greater understanding of the project. The team then analyzed the hotel's database in order to understand how existing, active customers responded to current and past offers.
Next, the team developed a new data-driven marketing model based on five quarters of data. The data was used to select inactive members who had a high propensity to re-engage with the hotel. After identifying the large inactive opportunity, they divided the initial test quantity into a subset of 18,000 members. This inactive test segment would be extended the same offer that the active members received. In the past, this "inactive" segment would have been ignored because of campaign criteria and a desire to save on mail expense.
Targeted messaging spoke directly to the audience the hotel wanted to attract. The precision marketing campaign results astonished the chain. In less than eight weeks, the campaign delivered an ROI of 1,090 percent.
Results like these validate the claim that data-driven marketing can be a game-changer for businesses wanting to not only retain their active customers, but also bring back dormant, non-responsive clients.
Marketers spend thousands of dollars each year marketing to customer bases that are engaged, making sure every promotion goes to every active customer. But when looking closer at the buying behaviors, only a small subset of these active members responds to such offers. By leveraging data analytics, marketers can still target the engaged, active members while redirecting spend toward their inactive audiences to increase revenue production. Marketers who know their audience can speak softly in the midst of today's marketing din and move readers to respond to relevant offers that will drive profits and retain them as loyal customers.
Sandra Zoratti is vice president, marketing, executive briefings and education at Ricoh and co-author of the book "Precision Marketing: Maximizing Revenue Through Relevance."