Postal strikes threatening marketing effectiveness

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By: Wise Marketer Staff |

Posted on November 8, 2007

Postal strikes threatening marketing effectiveness

Large backlogs of undelivered mail caused by the UK's recent postal strikes may be a warning sign for marketers, suggesting that they may need to re-evaluate their marketing strategies, according to predictive analytics software firm SPSS.

With the potential to save millions of pounds on direct mail campaigns, SPSS recommends that marketers should carefully consider their reliance on paper-based strategies, and update their marketing mix and strategies to reflect other channels that are perhaps more reliable, given the UK's postal troubles.

Switching to e-channels SPSS reports that some 5,028 million items of direct mail were sent out in 2006, which suggests that marketers could be wasting valuable resources on mailings that never reach their intended recipient (or at least reach them too late to be of any use). The company therefore recommends that companies consider other ways to target new and existing customers, such as e-mail, telephone or SMS.

Using predictive analytics software, companies such as Debenhams and Virgin Mobile have already improved their marketing effectiveness by leveraging strategic insights from previous campaigns to help increase revenues, reduce costs, and improve customer satisfaction.

Successful implementations Debenhams, for example, uses SPSS software to control marketing campaigns in-house and then track the results. This intelligence is then used to better structure future campaigns and to predict customer behaviour, which helps target the right people at the right time. With these methods, Debenhams has helped to generate a significantly better ROI from its marketing activities.

SPSS software also provides Virgin Mobile with a better understanding of its customers. The mobile operator undertakes more than 100 marketing campaigns each year and uses SPSS to identify the most appropriate campaign for different customer segments. For example, customers on a pay-as-you-go package who purchase a limited amount of credit and are likely to churn are sent a text message reminding them of the benefits of Red (Virgin Mobile's loyalty rewards programme). These reminders are sent either at or close to the time when the customer purchased additional credit, rather than being sent as part of an ad-hoc campaign.

Cost effective analytics "Predictive analytics enables organisations to analyse a multitude of customer characteristics and preferences," explained Colin Shearer, vice-president of customer analytics for SPSS (EMEA). "They can then determine the most cost-effective combination of marketing channels to deliver the best results and enhance customer loyalty."

Shearer concluded: "The postal strikes remind us that companies need to adapt to target customers in the way that suits them. While there is certainly value in traditional marketing methods, they also need to embrace online advertising and social media to reach target audiences to minimise wasted budget and resources."

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