One-quarter of all small- to medium-size enterprises (SMEs) are currently conducting 'best-practice' direct marketing, and this figure is expected to rise to 39% by 2007, according to a report by mail and communication specialist Pitney Bowes.
Through the report, Pitney Bowes appears keen to dispel the commonly held idea that sophisticated direct mail is the sole preserve of large companies conducting bulk mailings.
The survey targeted marketing representatives from the UK's top 1,000 companies and asked for their opinions on whether SMEs were applying best-practice techniques to their marketing mailings. For the purposes of the survey, "best practice" was defined as being when:
- Customer and prospect records (along with their key details) are stored in a database that's regularly cleansed, and in which contacts that have moved are tracked, and which relates purchasing activity to each customer profile.
- Existing customers are profiled and then prospective customer lists of 'look-alike' organisations are selected for prospecting activity;
- Campaign respondents are examined to improve targeting.
The survey also analysed best-practice direct marketing by SME vertical sector. An index of vertical sector ability was established, with 100 representing average expertise and 0 no expertise at all. Results show a 91 point difference between the best (IT firms) and the worst (building firms).
Barry Jessop, vice president of European marketing for Pitney Bowes, explained: "Direct marketing is a good medium for IT firms. Service and support over the web or telephone mean that high unit value sales are not limited by geography. Thus, the reach of direct marketing can be harnessed to target offers to a broad community. But at the other end of the scale, it may be unfair to expect builders to be direct marketing experts. These are often sole traders who lack both the time and skills to make best use of marketing."
How to compete
"Clearly, smaller organisations have noticed the gains made by larger firms through sophisticated direct marketing and have begun to implement best-practice technique themselves. This has been helped by the fact that the cost of simple database and campaign management technology has fallen, with several companies now providing such services on a hosted, pay-as-you-go basis, accessed via the web," Jessop concluded.
According to Jessop, for small companies, marketing sophistication (encompassing speed, quality, and cost-efficiency) must be in place if such firms are to achieve healthy market share and compete effectively against larger businesses.