We have plenty of good direct marketing copywriters here, like Jules Brown (www.julesbrown.com). Note I said direct marketing copywriter, since the art of writing copy for direct mail or email, being you want to elicit A RESPONSE not just tell a good story. It is somewhat different to ‘mainstream’ copywriting. A little more ‘in your face’ and in some cases, tacky. Think Readers Digest mailers as the extreme example – However in most sectors it works and does the job, often much better than pretty, more ‘creative’ attempts from general agencies costing thousands more.

People like Bob Bly, Dean Rieck and Dan Kennedy in the US are experts in direct marketing copy. I’m a big fan of Dan, who runs a highly successful information marketing business revolving around teaching business owners the art of direct marketing and how to grow their businesses, using proven, but somewhat radical business strategies. They’ve over 35,000 eager subscription followers, many of whom attend regular seminars and workshops seminars across the US. He’s not just print-focused either, often promoting the use of online methods. Checkout his website and an article on copywriting for small business. click here.

Also  Bob Bly and Dean Rieck .

The next wave of marketing will originate from your accounts department. Better, more effective use of statements and invoices and inserts are coming to help market products and services to your customers – And it’s not just throwing in more promotional inserts in with the bill. Although for many companies, this is often a great place to start. For a mailhouse, it’s a simple job to not just printout the statements quickly and efficiently, but with automated machinery to insert an additional marketing or information flyer adds negligible cost, yet the impact to long terms sales can be significant.

Below is an audio interview with Mark Stevens, author of the best seller ‘Your Marketing Sucks.’ (Order here). Mark provides a typical example of how it works and the business benefits. Click on the audio icon.

smith

Stage two – Transpromotional

We can do better than inserts and start including marketing material and offers within the invoices or statements themselves – And in a highly targeted and effective manner.

Introducing TransPromo, short for Transaction – Promotion marketing. Transpromo allows different companies and sectors to accomplish many different things such as increasing revenue, improving customer retention rates, education, or simply reducing mailing or customer service costs.

Of course, the more you personalise communications and expand customer touch points, especially across multiple channels like print, email, the web and mobile, the more you reinforce your brand and maintain competitive differentiation.

The use of transpromo documents in the direct mail channel is very attractive, and works well for thousands of companies worldwide. There’s costs savings and response rate can improve dramatically over time.

However today customers want a choice. It can also work in email channel, with the documents delivered electronically to ‘opted in clients’ as PDF attachments.

This is particularly attractive from a client cost saving perspective, and still largely untapped. Today we’ve better, smarter tools that can generate highly targeted cross-channel promotions with much less in the way of IT development or running costs.

Seasoned marketers also know that timing is everything.  Marketers are also looking for a simpler, more cost-effective way to increase revenue and retain customers, especially in view of regular postal changes and cost increases.

TransPromo does affect content and appearance in a positive way. In addition, consumers appreciate personalized communications, prefer to receive sensitive information in paper form, and expect loyalty programs in which they can participate.

Why does TransPromo work?

There are several reasons, not the least of which is the fact that people are more likely to read the bill than normal direct mailers. The other often-overlooked reason of why transpromo works, is that because it is a transactional document largely driven from an accounting system, it holds current (and perhaps previous) details of the individuals purchases or service provided. We know that persons buying pattern and dollar spend. Much can now be presented in charts or graphs, as well as figures, making it easier to interpret. What all this means is the marketer can creatively use data to dramatically increase the success of any promotion since it can be tailored to the specific individuals needs, not just a broad demographic.  (Rafi told us this trick).

For example, if the offer was to an electrician, then you’d include an offer on electrical goods at their local wholesaler. If to a household, perhaps a food or local event promotion, (especially since we know their suburb). To a hair salon, specialist beauty or hair products. If you knew a special event, like a persons birthday, this could automatically trigger a unique offer based upon their profile.

Because the offer is tightly targeted, the response rate is normally very high and therefore can be charged accordingly if that ‘ad space’ is expertly sold to say, an outside industry partner or supplier. Some companies have be very successful with transpromo, using them to make their bills generate significant revenue, not be a monthly overhead cost.

Here’s a summary of the top opportunities I’ve identified:

• Turn a cost center into a profit center –  Any invoice ‘white space’ can be sold as an additional revenue stream.
• Increase revenue through customer spending when they respond to targeted offers that cross-sell or up-sell services and products. This can be the company, or complementary third party products or services supplied by industry partners.
• Support loyalty programs. A big opportunity here, but expert data mining with creative input is essential. 
• Better designed and more graphical bills reduce dollar costs related to inserts, postage, preprinted forms, handling and especially to call centers that handle customer inquiries or complaints.
• Selective use of traditional inserts vs transpromo documents, since the bill payer or company decision-maker isn’t always the person opening the bill! (Some cunning tracks can be used to overcome this issue).
• Increase customer touch points and selling opportunities via multi-channel marketing (leverage TransPromo across e-mail, mail, Web and customer service, for example).
• Reduce accounts receivable cycle, by integrating relevant information, colour and smart e-channel options.

It’s far less expensive to market to existing bill-paying customers, a captive audience, than it is to attract and win new customers.

A final reminder that more consumers open transactional documents and read them than direct mail pieces with multiple inserts, or those mass market letterbox flyers. Each bill typically gets several minutes attention, being ten to fifty times more than any expensive TV promotion, magazine ad or flyer.

To learn more about the exciting world of Transpromo, contact Kevin 027 244 4884

It’s a common cry that applies to both direct mail and advertising generally. Sales are static and not increasing, even though we’re spending more on marketing and even becoming more creative in our copy or offer.

Rafi talked of three key elements to a successful campaign.

• A good, highly segmented mailing database,
• Superb creative with a real WOW factor
• A compelling, highly relevant offer.

The Forth Element – Sequencing

However there is a forth, often overlooked element to a successful direct mail campaign – Sequencing.

There’s old saying sales and one reminded to me just last week in a weekly podcast from sales trainers at salesroundup. “Statistics show most sales take at least 5 contacts with a client or prospect.  In fact, 80% of sales are made on or after the fifth contact.  Many sales people never make it to 5. A lot of them stop trying to connect after the first or second attempt. Even worse if a client DOES buy most sales people don’t bother with any follow up communication.”

So too in direct mail, and particularly with email campaigns where it takes longer to get to the order phase. Direct response mailing is there primarily to sell something – One mailout or sales letter to a new prospect simply isn’t enough! It needs multiple efforts/visits, but in a highly planned, sequenced manner.

Below is a tiny extract from a 90min training workshop by Dan Kennedy in the US that explains sequencing. Dan has built dozens of successful businesses over 30+ years, and now provides this extensive, highly practical know-how to others. And Dan isn’t just a direct mail fanatic, but encourages the use of all media channels, online and offline.

In this 5 minute audio extract he covers a specific example used by a restaurateur. Click on the mp3 graphic below

dan

Note he also talked about the need for a MARKETING SYSTEM. This is something we’ll elaborate on in later articles.

Where to start? Just add in something that helps grab the readers attention

Yep, a seemingly handwritten note to highlight an area or offer as shown in red on the sales letter or broachure, left. No changes of copy, just something that’s overprinted to reinforce what has already been said.

It may look cheesy, and 99% of Mac designers will scream, saying it’s amateurish and tacky. But like it or not, for most consumer products or services, this ‘old school’ direct marketing trick still works! In fact it can often double, even triple response rates!

Regardless of the media you use, be it printed mailings, sales letters, email or website copy, Doodles have been proven to do a great job.

For those of you that are sceptical, try it out on your next email or direct mail campaign. Send out half using your standard ‘professionally designed’ version and the other 50% with the doodles added in. Yes, it may mean adding in colour, which costs more if printed, but if it achieves 50-200% higher responses, it’s money well spent. Even a 20% sample with doodles may be enough to prove it’s value in your own marketing.

If you’re a small businessperson with only a few hundred regular customers, then usually there’s few problems. Send out small batches of 30-50 as blind copies (bcc) from MS Outlook, with a message and the attach the pdf file.

However if your customer base is in the thousands, you’ve suddenly a major technological and logistical problem.

Firstly, few ISPs (Xtra, Orcon etc) will appreciate you sending out a bulk campaign like this. Sending more than 50 will often raise alarm bells with ISPs, who could accuse you of spamming and shut you down. Perhaps then after weeks of negotiation and IT processes to get past this, you’ll overcome this, but then start to note your ISP bills will rise, eating into your monthly GB allowance, especially if you send the pdf as an attachment and the file itself is several MB in size. i.e. 5MB x 5000 recipients = 25GB of traffic data, which is often a businesses entire monthly allocation. Result? Higher telecom/ISP bill

Quickly your IT geeks and email provider (if you have one) will see the solution. Place the pdf on your website, with a link in the email for people to download. That way, the data transfer requirement and allowance becomes your customers problem, not yours. Sounds a great idea. The problem is that your website and email logs tell you that very few people are downloading the file and [hopefully] reading it or printing it out!

Show me the numbers!

You send out say 1,000 emails, yet only 50-100 people have downloaded the pdf! There seems to be a reluctance to click on links within emails. In fact a typical industry ‘click-through’ rate is only 20%. If we tie this in with the industry 30% figure for those that even open the email, add in the 20% of these that then download the file, and we have just 6% opening and reading the email!

Now we may have saved 70% of our costs by going to email, but if the result is that over 90% of our customers or prospects don’t even see see the material, we’ve a major problem on our hands… 

Unfortunately this story is common. It’s a quirk the banking people have noted too when they migrated from paper to email distribution. e-Billing was inevitably set up to send out an email with a link, for people to then login and download/view the bill online. They found that it took a while for people to want to go through this process. Bills became overdue and complaints came in, with many reverting back to paper versions. What can we learn from all this?

Firstly, there’s nothing wrong with sending out pdf bills or brochures, if that’s what your customers prefer and you can save some cash. However what people seem to want is to have the bill arrive as an attachment, not a link to a website and/or tied in with complicated logins. With email too there’s the subject of subject lines to consider too, since this alone often determines if the recipient will open the email, let alone the attached pdf file – But that’s another topic.

There is hope

But it can work well if done right. Utilities in the UK that used the pdf attachment to an email (instead of a link), found that many more people would then open the bill and subsequently have it paid, on time. In one case, overdues dropped by over 50% which has big cashflow and overhead benefits.

So, if you’re looking for an integrated print-email campaign that distributes pdfs the right way, talk to us. Phone Kevin at 027 244 4884 or email kevin.trye@actionmail.co.nz

“[With email], Relevancy and News seem to be the keys. If the recipient thinks they’re going to learn something, they open. If they think you’re trying to sell them something - they pass…

Our experience of e-mail giving, vs direct mail isn’t actually for people who have switched from mail to e-mail, it’s for donors who when they gave for the first time (mostly via the internet, but also through face-to-face, events, leaflets, fun-runs, marathons etc) specified that they would prefer to be contacted by e-mail, rather than mail.

So it’s really a case of ‘people who prefer to give via direct mail, on average, give more than people who prefer to give in response to e-mail appeals.’ Unfortunately I don’t have the figures to hand, but from memory I think one client was getting an average gift rate of about 50% less for e-mail responders compared to direct mail responders.

I’m not sure how much this has to do with the medium itself, though. I think the profile of the people concerned is probably more significant. People over the age of 50 simply give more than younger people, I think this has always been the case. And they prefer mail. Younger donors prefer e-mail, and don’t give as much.

It’s possible that the transitory/virtual nature of the internet vs the emotional involvement of actually holding a letter from the CEO of a charity in your hands is relevant too”

Actually Jules’ comment about 50+ segment giving more rings true. An Actionmail client promotion last year, with proceeds to a large non-profit, gave a huge 35% response rate within an ‘older’ audience. Here we used traditional direct mail with a simple reply post envelope. Very old fashioned, but it worked a treat…

Kevin Trye

“Still wondering about the best channels through which to deliver your messages when you’re trying to boost your bottom line? Consumers are more likely to purchase based on messages they receive through traditional media. In this year’s study, we included television commercials and infomercials as channels through which consumers may have been directly influenced to make a purchase. While this approach does not take important factors like branding into account, it does give us a basis for comparison where branding may be the primary goal—as is often the case with social media.

Our research shows: Direct mail has directly influenced more consumers to purchase than any other channel. 76% of consumers have been directly influenced to purchase through direct mail.”

For the first time in years, someone has actually taken the time to look at media channels in an objective way. And what media channel came second as an influencer of purchases? Television. Email came in third, which considering email marketing is a tiny fraction of the cost of TV advertising, is an excellent result.

Another truth hidden away in the report was the statement that email is obviously very popular, but only 15% of people like to receive marketing messages via this channel! This confirms our view that email is more of a communication medium, not ideal for ‘push marketing’ purposes.

The report is a must read for every marketer and business owner. Download here

42% prefer to respond to a promotion online – Let’s make it more inviting and easier for them

The concept has have been around for several years, but only now with improved tools is it exploding and taking one-to-one marketing and lead generation to new heights. It encourages the growing numbers of people who prefer to respond to a promotion online, regardless of whether they heard about it from a friend, in an email, text, direct mail piece or personalised brochure.

PURLs are purpose-built web ‘landing pages’ with a strong call to action. They’re rapidly becoming the gems of the net. Key benefits:

1. Up to 10x higher click-through rates
2. Ensures a much lower cost per sales lead
3. Integrates Direct Mail, eMail & Mobile with the net
4. Provides real-time statistics about consumer behaviour

PURLs don’t come in gift wrapped boxes or sold individually. They are most often sent as part of a direct mail piece or in an email. In this age of variable digital printing and mail merge, each recipient can receive an individual PURL in a company bill, sales letter, newsletter, postcard or other printed material. It is also easy to generate dynamic emails with a link to each person’s PURL in the message.

Still confused?

This quick 5 minute video below by small business marketing coach David Frey introduces purl technology very well. He also details some of the amazing results he and others have already achieved. To use his own words “it blends the power of personalisation, direct mail and the internet into one seamless marketing campaign”

The uses of PURLs are limited only by your imagination.

David’s example, although impressive, is still the most basic of purl options. There’s numerous ways to put purl campaigns together using print, email, even mobile phones! The uses of PURLs are limited only by your imagination. They can be used to obtain email addresses, to update or verify consumer information, for surveys, customer satisfaction feedback, special offers, coupons, as triggers for certain events such as a reminders to renew a subscription and more… One aspect which I think is a key part of the strength of personalised URLs is its ability to link and track marketing efforts across multiple media.

Taking off in the US Market

According to a recent US survey – 87% of corporate marketers are going to leverage PURL campaigns as part of their marketing initiatives in 2009! According to the survey:

• Multichannel integration, analytics, and data gathering capabilities ultimately drive more targeted, cost-efficient marketing programs"
• 87% of marketers intend to use digital solutions such as PURLS in ‘09 to link direct mail to other marketing channels." –Jupiter Research Feb ‘09

We can learn much from and take heart from the US experience. Here in New Zealand fully customised, turnkey PURL services are provided by Actionmail. (pH 09 415 4508 Ask for Kevin or email kevin.trye@actionmail.co.nz ). From simple systems as shown above, to intelligent business packages with full tracking, sales lead notification tools and more.

Aside from a couple slick TV campaigns, it seems in most areas we’re years behind. Even our direct mailing campaigns here are lousy by world standards, using antiquated strategies and methods. We’re wasteful – Not very ‘GREEN’.

What’s the Trend Overseas?

Today it’s about sending out relevant mailers, only to those that want them. Mass market advertising is on the way out for many sectors. Targeted data-driven marketing is usually cheaper, more effective and super-efficient. But it also comes down to wanting to understand our customers better and introducing ourselves to new CRM (Customer Relationship Management) technologies.

Large retailers throughout the US, Sainsbury in the UK and even Myer in Auzzie have already moved forward, slashing their budgets by using a direct marketing, rather than a mass marketing approach. Naturally this hasn’t been good news for many established ad agencies who know very little of data or CRM tools.

It’s not just retail marketing that changing. Even utility and credit card companies that have ample data have huge opportunities to become more efficient and effective..

Here’s some Ideas…

Just compare what’s commonplace in the US market from the video, below. Against all the hype, direct mail is actually holding up very well in a tough economy, often out-performing more complex email and online initiatives.

Because well-targeted direct mail promotions actually work, it’s been a goldmine for small local businesses too, helping them get lots more store traffic and loyal customers through the door.

If any of these ideas or items in the video bring you some inspiration, give us a call on 027 244 4884 or email me at kevin.trye@actionmail.co.nz

P.S. Think the fancy CRM systems and customer loyalty programs that drive all this are only for the big corporates and national retail chains? Wrong. Smart online systems now bring easy CRM technology to small business  – Setup for a few hundred dollars and maintained for as little as $5/day. Add in amazing mobile voucher/loyalty options and it’s the complete small business marketing package.

Read also – Double Your Rewards and check out the Insight out of chaos website This famous New York Agency has been doing this stuff for ten years…

Not long ago I made a trip over to the local Radio Shack to purchase an electronic plug for my cassette recorder. As I paid for my item the retail clerk asked me for my name, address, cellphone number, birth date, and even my email address (something every retailer should be asking for today!).

Although I felt a twinge of discomfort giving out my personal information, I went ahead and gave it to him and went on my way.

Driving home I reflected on Radio Shack’s checkout process and was reminded of the power of information gathering at the point of sale. I had just given Radio Shack three ways to contact me, not to mention, information on what I had purchased. In the hands of a skilled marketer, this information is powerful.

Database Marketing the Small Business Saviour?

The recent economic slowdown has brought increased competition to small businesses. And with that, retailers across North America have described their sales as "flat." Small businesses should be looking for low cost, high impact marketing activities to drive prospects to their business.

One of the most effective and cost-efficient ways to add profits to the bottom line is the use of database marketing, which uses information collected at the point-of-sale.

Using personal data, purchasing data, and contact information from a customer database, a spa and pool retailer can make offers to customers for complimentary products and services and engage in loyalty marketing activities.

Database marketing has four key elements,

(1) gathering customer data,

(2) building a customer database,

(3) creating targeted offers for specific customer groups, and

(4) tracking results to improve responses.

• Step 1: Gather customer data. The easiest way to begin this process is to develop a simple form for customers and salespeople to fill out every time a customer purchases a product or service.
• Include personal information such as names of spouses, children, profession, and birthdays, as well as, product information such as manufacturer, make, and model.
• Step 2: Build a database to store your customer information. Start simple using off-the-shelf software such as Microsoft Access. Later on you can begin to modify the database to either include different types of information or to print special reports.
• Step 3: Start sending offers and personal messages to your customers. Don’t wait until you have a large mailing list. Begin sending notes to customers right away thanking them for their purchase, to celebrate birthdays, share holiday messages, and inviting them to come in and take advantage of special offers.

There is an old saying that goes, “Business goes where business is invited, and stays where it is appreciated.” A personalized invitation to drop by the store to take advantage of a specific incentive is sometimes all that is needed to keep your customers coming back into the store.

Instituting a program of personal, hand-signed notes that coincide with birthdays or special events addressed to the customer’s significant other that offer gift ideas, can have surprising results.

• Step 4: Track the results of your database marketing efforts. By knowing who you sent offers to and who responded will help you identify your best customers, allow you to more effectively allocate your marketing dollars, and help you tweak your marketing pieces to get higher response rates.

What Information Do I Collect?

It’s important to determine in advance the type of information to collect. To do this, make a list of common special offers you might be presenting to your customer.

For instance, if you sold a product in the health industry and many of your customers have lower back problems you could joint venture with other businesses to develop special promotions on products that help to relieve lower back pain.

To capture the fact that your customer experiences lower back pain, simply place a check box on your form that says, “Do you experience lower back pain?”

If your customer has small children, consider presenting follow-up offers for products targeted for small children. Imagine being a consumer and receiving a letter from your business with an enclosed birthday card for little Joey who just turned eight years old and a discount offer for a basketball hoop or other relevant products.

You think to yourself, “What a great gift. Joey would love that!” This is the power of database marketing.

Collecting Accurate and Consistent Information

Database marketing all starts at the point of sale. Without accurate, complete, and consistent data this type of pinpoint target marketing can’t be done. To ensure that your information is accurate and consistent, help your customers fill out the data collection form and review each information form for completeness.

You might experience a hesitancy from your customer to give out all their personal information, similar to how I felt at Radio Shack.

However, after explaining that the information will only be used to send out special offers during important events, is completely confidential, and will not be shared with anybody else, you’ll find that most of your customers won’t have any problem giving out their personal information.

Cost Effective Loyal Customers

Marketing to your current customers is one of the most effective and cost-efficient strategies you can do to reduce your marketing costs, enhance your customer / retailer relationships, and produce long-term loyal customers who, over a period of months or years, become your biggest source of referrals.

Thanks for the tips David. Today even the CRM technology is easy. In fact for those starting with nothing it’s actually better. Those big Corporates with their legacy databases inevitably have to spend lots of time and money cleaning things up first. Small businesses can start within a few weeks. To set started, email kevin.trye@actionmail.co.nz

The core conclusion? Better Customer Data Integration and Analytics is seen as Critical to Revenue-Generating Strategies and Marketing Efficiencies.

The international audit during 2008 of some 650 senior marketers revealed that making communications more personal and relevant, as well as more targeted and timely, was among the top strategies for realizing greater revenue and profitability from existing customers. Other leading strategies included addressing under-penetrated markets or new customer segments, as well as finding new ways to up-sell and cross-sell existing accounts.

The CMO study highlighted three key obstacles and deficiencies to overcome. This included:

• Lack of real-time data that captures across all customer touchpoints.
• Information not only being selectively gathered, but often inaccurate.
• Data restricted in its availability and use across the organization.

The core need for change  has been simmering for a while now. It started with that groundbreaking research by Romano and Broudy way back in 1999 who clearly established the benefits of  utilising client profiling and transactional data within marketing campaigns.

“It is inexplicable that the vast majority of marketers today are still struggling to source and extract meaningful insights from customer data at a behavioral, transactional and account value level,” noted CMO Council executive director Donovan Neale-May.

Retail & Hospitality have the biggest opportunities

The earlier Retail Trends Report in 2005 came to surprisingly similar conclusions to the CMO one. It concluded that retailers that take a customer-driven approach to marketing will be able to withstand the competition for dwindling discretionary income, and still have a productive and profitable. The key to success for small retailers is to identify their best customers, find potential niches to cater to, get to know what motivates customers and then interact as individually as possible.

Retail Trends Report suggests that retailers creating personal experiences and communications are those most likely to come out ahead. Personalising the selling experience and marketing messages will help to level the playing field between small and larger retailers.

According to Gary Wright, of Wright Marketing who specialise in retail strategies, "Technology today puts personalised communications within the reach of every retailer, regardless of size. With new database and digital press technology, small retailers can affordably engage in one-on-one communications which has been proven to significantly increase a customer’s brand loyalty and lifetime value."

Wright encourages retailers to explore database programmes and digital production opportunities that will merge customer data with promotional materials in order to produce personalised and highly relevant materials at a fraction of traditional printing costs. His report indicates that when you communicate with a known customer, you are 5 times more likely to generate a response and a sale. When you add customer-specific information to that correspondence, the potential increase jumps to 13 times.

As Rafi Albo knows all this well. He’s shown us in his own retail sector examples that with good planning, a 15-35% response / voucher redemption rate is very achievable today. Winston Marsh also provided some useful insights for small retailers where he touch on the benefits of using the internet and email. Now, in 2009, we can add in SMS TXT messaging.

The opportunities here for retailers are immense, but like any marketing strategy, expert planning and execution is the key to success.  Call us on 027 244 4884 to discuss how we can together devise a retail marketing plan to suit your industry or market sector.

If you want more information on the Routes to Revenue study go to  the CMO web site at http://www.cmocouncil.org/index.asp.

Kevin Trye

What Works?

Well, we know that good copywriting, design and a superb offer can make a huge difference. A well crafted direct mail letter to a targeted house mailing list typically gets a 2.6% response, being significantly better than mass market advertising. But in any promotion, only a percentage of responses will turn into sales. To see what it means to your bottom line, use one of our ROI Calculators.

Clearly this is why business owners spend time shopping around to get the best design, printing and mailing rates. They know that getting a good ROI is still hard work and cost cutting appears the only option.

But this approach seldom helps sales leads or results. It just minimises the loss.

Poor response rates occur because our advertising and mailing campaigns (print and online), treats everyone the same. These campaigns are only relevant to a few… Todays methods reflect a wasteful, highly inefficient process.

Better Targeting

One answer? Studies tell us that 93% of your sales will come from just 40% of your mailings (click graph). So, why waste time and money continuing to send stuff to that huge 60% chunk of people on your list who don’t buy?

The secret to efficient, high response marketing is
in your customer database.

An expertly maintained database can tell you:

• WHO you should communicate with,
• HOW you should communicate,
• WHEN you should communicate,
• And with WHAT offer.

Sort out Your Data – Weed out unlikely prospects and find a subset of your customers that are most likely to respond to your marketing campaigns.  By targeting ONLY those most likely to respond, you’ll achieve about the same response, for a lower cost.

Then if you want to boost sales results, start introducing more relevancy into your messages. Yes, it does increase the per-piece cost, but you’ll find that by sending out fewer pieces (top 40% only), together with 2-5x higher response rates (i.e. 5-15% response) will more than cover everything, giving far more qualified sales leads.

A 50-100% ROI is now very achievable as seen in the example graphs (click to expand), showing a typical ROI before and after segmentation down to the top 40% or the ‘gold’ customers, plus the relevancy factors added in.

Where to Start?

It starts by working on your database. Some work you can do immediately, like having us check your address list against the latest NZ Post Change of Address Database. It’s known that 23% of households change in some way each year. At just 60c per entry, it will quickly pay for itself in the first mailing.

Follow this up with some old fashioned telemarketing and mailers, to gauge their interest and collect their email address. You’ll certainly need a better ‘system’ to enter this new data and to then manage it all – To help with segmenting, data mining, campaign management etc. Excel or the Outlook address book simply doesn’t cut it for this task.

For ideas read our recent article on Building a Marketing Database.

Companies today are lucky to have one that has accurate names and postal addresses, let alone the customers email address, or other specifics like birth date, demographic, spend pattern, product or service preferences.

Specifically, what’s needed? To the left is a database header listing extracted from our workshop. It shows the key items a good marketing database should hold. A good list will have a dozen or more elements, not the typical 5 or 6 being simple name and address details. But what simple tools can we use to build, manage and then keep such a complex list up to date?

And getting the data is just half the battle. What you do with it is the secret.

CRM to the rescue

Wikipedia describes CRM (Customer relationship management) systems as: “the processes a company uses to track and organize its contacts with its current and prospective customers … Typical CRM goals are to improve services provided to customers, and to use customer contact information for targeted marketing.”

Today there are loads of affordable CRM packages arriving, many designed for specific industry sectors. Some, like Salesforce.com offer various options, sold by way of an annual subscription.

In fact a good CRM system can also help put the company marketing on autopilot. A unique business solution becoming popular in the US is from Infusionsoft, which emphasizes advanced automation options.

Plus, there are dozens of other amazingly simple, lower cost systems available too. e.g. Highrise, Tactile, Capsule, Heap CRM and Relenta. GoogleApps marketplace also provided us with another amazing CRM list recently, being the tip of a growing iceberg of crm options. Read more. We’ve also discovered an amazing, locally developed small biz solution called Tymwise. Sold as an online booking system for service businesses, it includes a lot of neat CRM and business management features. If it’s an online accounting package you need, there’s none better for small business than Xero. Some CRM systems, like Capsule, link in with Xero.

These are a big leaps forward compared with traditional, high maintenance solutions like Goldmine, SAP, Prophet or ACT. But why online? Simply because there’s no software to install or endless bugs, upgrade costs or patches to worry about. This new web based ‘cloud computing’ model, sometimes referred to as ‘software-as-a-service’ is becoming very popular within all industry sectors due to its low cost, good reliability, ease of use and flexibility.

The Loyalty Programme Ingredient

The real secret to success is when we can tie these CRM systems into a customer loyalty or rewards programme which provides realtime purchasing (transactional) data, giving a holistic view of the customer profile and spend pattern.

To date very few companies here or overseas do this. Most stop at the demographics. But mining the transaction or accounting data (along with innovative creative and offer), is how industry leaders like Rafi Albo consistently achieve amazing 15-35% response/redemption rates.

N.B. Expert planning and implementation is the key to success with any CRM + Loyalty package. Call us for advice on one that would suit you best. We’ll help you and your chosen vendor fine tune it for your specific industry and marketing needs.

However, creatively using data about customers can contribute to the customer’s experience in so many ways.

For example, there’s nothing easier than sending a birthday card to your best customers. That doesn’t mean a birthday card should be sent to every customer because data show that below-average customers know the sentiment is hollow; they know they don’t shop enough to warrant a birthday card. In addition, below-average customers spend too little anyway and the result is a negative ROI.

But when you send a creative, relevant, personalized birthday card with a gift that has no catch to a good customer, it pays dividends in relationship building that goes beyond that day’s transaction.

Data from a major retailer in the US shows that your best customers (i.e. top 30%), when they redeem their birthday gifts, will spend even more. They’ll purchase things they normally wouldn’t as a treat for themselves and they’ll buy more than usual in gratitude. They’ll walk the store, discover new merchandise and ‘connect’ more.

Using loyalty data in this way goes way beyond crunching numbers…

Real-world Case Studies

UK supermarket giant Sainsburys talked to each of its 4.5 million ‘Nector Card’ customers with an image personalized postcard mailer right on their birthday. Printed digitally with a volume of about 400,000 pieces each month.

I. The Task: Customer Care

• Gift vouchers are a good means to attract customers and are frequently redeemed.
• Sainsburys sends a mailer to each known customer, right on his or her birthday – the information about birth dates comes from the customer database.
• The mailer includes a voucher with one of the customer´s favorite products as birthday gift. These customer preferences are taken also from the customer database.

II. The Features: Outstanding Personalization

• Image personalization
  The Sainsbury´s birthday mailers impressed clients at first sight using image personalization on the front cover. Each customer´s name was integrated in a photo design in a highly realistic way. Using the latest variable print technology a highly emotional and personal look could be created, that showed customers at first sight that Sainsburys cares about them.

• Full document customization
  Additionally, each mailer was adapted to each client, not just by the customers name in the image but also by using different fonts for different age groups and by printing in an individual product as a present, including both product image and text. Also an individual e-voucher number allows fast and simple redeeming at the cash desk. The redeeming is tracked and the data are automatically sent back to the loyalty program database.

III. The Results: 40% Conversion Rate!

• The redemption rate of the coupons has risen to a stunning 40%!
• Based on the experience of previous campaigns, the return-on-investment increased by 25.5 % and revenues leapt by 110 % and gift redemption by 39 %.

It’s already started Downunder

Myer, a major retail chain in Australia has reportedly been monitoring the Sainsbury experience. Just recently they announced their decision to slash their traditional mass advertising budget, instead sending targeted direct mailers to their 2.7 million Myer One card holders. (Myer gold customers should expect birthday promotions to start soon).

It’s a smart move which should save them millions in traditional TV and Newsprint ads, whilst paying huge dividends at the cash register. Read more about Myer’s plans here

Rafi Case Studies

For yet another highly response birthday-related case study we liked was out of Israel and outlined by Rafi Albo in his workshops here late last year. Check out our 5 min Rafi WOW Factor Video

Untapped Small Business Opportunities too

All this isn’t just for big budget retailers. Small business owners have immense opportunities by building up a database and better tracking their clients purchase patterns. Restaurants, as well as many health and beauty salon owners have the biggest opportunities.

Don’t forget that the aim here is to build up a history of your customer behavior and preferences. Finding out how they want to be communicated with is important too. If they prefer to be contacted by email or SMS text message, that’s fine. Often using more than one channel provides the best results. Ensure your marketing strategy and infrastructure allows for this.

The purpose of a good loyalty program is not points or rewards or plastic cards or discounts. These are just means to an end.

Loyalty programs are about discovering who the best customers are, and to track their behavior, find out their preferences, cater to those preferences and keep two-way communication going. The result should be an ever-stronger relationship with customers that increases frequency, per-cheque revenue, marketing efficiency and competitive advantage.

1. Give prospects something to look forward to. A personalized e-mail sent before your drop creates anticipation by alerting your target audience to a direct mail offer on the way. Your prospects know to look for your piece and are more likely to recognize it when it arrives.

2. Provide another look, another chance and another response channel. With limited time offers, an e-mail sent after your drop can provide a brief reminder about your direct mail offer and the deadline, as well as give prospects a fast, easy way to respond.

3. Put personalized power into response rates. A recent Direct Marketing Association (DMA) study revealed that 42 percent of direct mail recipients prefer to respond online. Instead of a one-size-fits-all mail piece and business reply card, use customized direct mail to invite prospects to visit a personal URL, or PURL, such as www.johndoe.greatvendor.com. PURLs provide a personalized introduction to your company and a unique marketing message for each prospect.

4. Gather PURLs of wisdom. While visiting “their” PURL site, prospects can also be encouraged to complete a survey revealing their individual preferences, wants and needs or to opt-in for e-mail communications. This data allows marketers to craft the more precisely targeted offers and personalized communications that can lift your response rates in both traditional direct mail and e-mail marketing.

Then use e-mail to optimise your direct mail budget

A coordinated effort using direct mail and e-mail could help trim mailing budgets. Send an inexpensive postcard to alert clients or prospects that personalized offers and information are available and can be accessed electronically. Clients can then log in to a secure personal URL (PURL) to retrieve information or elect to receive the message by secure e-mail. Most will appreciate being given the choice too, knowing its a ‘greener’ option..