The array of communication channels available to today's consumer - and the advent of the tech-savvy consumer - means that all marketers must take a multichannel approach, understand their preferences, and keep a continuing dialogue with customers, according to Corporate Mailing Matters' CEO, Yolanda Noble.
Indeed, Noble points out that the ease with which most consumers can switch suppliers in most sectors has never been greater. As the balance of power has shifted in favour of the consumer and customer churn rates plague many industries, marketers are seeking out ways to connect with their customers and to hold their attention. As Noble says, "The notion of the consumer as a passive, mono-mediac is outdated and nowadays, each customer will have a preferred communication medium, which may even vary between the different products or services that an organisation may offer."
So where should marketers and customer relationship management (CRM) professionals focus their activities and budgets? Over the past decade, there has been a gradual decline in traditional brand advertising and a corresponding rise in spend on direct marketing and responsive advertising.
Most of the industry discussion around this change in the advertising industry cites the success of sponsored search results on Google or the latest example of interactive television.
The rise and rise of...
But the reality, Noble says, is that direct mail also continues to grow and is successfully resisting complete removal from media schedules. Figures from the Direct Mail Information Service reveal that, in the past 13 years, the overall volume of direct mail has increased by 139% and direct mail expenditure has risen by 165%.
This more general trend, however, masks a quieter but more pervasive revolution that is happening in the world of consumer communications: the use of existing channels for advertising and marketing purposes. Research commissioned by Group 1 Software into the importance of different customer/prospect touchpoints across a number of industries highlights that the average consumer pays more attention to standard and statutory information (such as letters and statements) than is generally supposed. This surprising finding is corroborated by research carried out back in 2003, which revealed that consumers pay almost twice as much attention to statements and correspondence than they do to direct mail or TV advertising.
Going below the line
Despite these findings, according to Noble, above the line advertising still commands greater marketing resources. The World Advertising Research Centre indicated that in the UK approximately 14,159 million was spent on TV, press, outdoor, radio and cinema advertising in 2002, whereas 2,378 million was spent on direct mail (only 17% of the above the line budget), and even less was dedicated to communicating via regular correspondence such as bills, statements and service letters.
UK businesses should therefore begin to reassess the disparity between above-the-line and below-the-line media, especially bearing in mind that touchpoints such as personalised customer service letters have a greater impact on individual customers than television advertisements (which are designed to appeal to the masses).
Stretching the budget
By using existing communications channels to insert a marketing message (e.g. bills, statements and customer service letters) the marketing cost of design, print and mail can be greatly reduced. Every household receives bills and statements of some kind on a regular basis, so why not make these pay for themselves? The most attractive feature of this approach for any experienced direct mail marketer is that, due to the critical and personal nature of these documents, customers always open them and usually keep them (either at a household or individual level).
Recent technological advances in the production of bills and statements have enabled highly personalised advertisements to be printed on-the-fly, and the closer integration of marketing systems with statementing systems. Marketers are now able to automatically trigger the printing of personalised marketing messages and offers on a statement or almost any other piece of customer service correspondence.
It's true that the consumer's responsiveness to this form of advertising will vary depending on many factors, such as whether the advert references a telephone number, an insert in the same envelope, or a website link. Noble's own observation is that overall responsiveness seems to level out around the 5.5% level - only a little bit lower than typical direct mail campaigns.
Company financial reports are also being used to convey marketing messages now, which is a particularly important trend because shareholder groups can and often do include both customers and employees. exec Corporate Mailing Matters' own research indicates that, on average, 27% of the UK's top 1,000 companies are effective in using their annual and quarterly statements as marketing documents, and the industries traditionally strong in direct marketing are most developed in bringing financial reporting and marketing together (such as retail, telecoms, automotive and banks).
Data-driven marketing methods are being employed to segment shareholders, shareholder-customers and shareholder employees into different groups, and address their differing concerns with distinctive creative, presentation, documentation, and mailing content.