This is a common sight now as more citizens are accessing the Internet in China.  According to the report from the Wall Street Journal, China now have 338 million accessing the Internet.  

The last time I received a physical coupon was in the newspaper delivered to my home.  You see, there is a service provided by Singapore Press Holdings (SPH) where advertisers can insert such coupons in the bundled newspapers to be delivered to homes around the country.  Since the delivery is managed and controlled by SPH, the advertiser has the choice of selecting which geographical location they wish the coupon is to be delivered (e.g. the eastern side of Singapore would include towns such as Marine Parade, Bedok and Changi).  An example of such a physical coupon is shown below.

Setting aside the theory on how such direct marketing tactics are developed by advertisers, I have to admit that I will take the trouble to look through the coupon with great interest.  But the intent to encourage me to buy a product otherwise would not will fail on me because the promotional product has to be something that I need now, or aspire to own in the future.  Hence, the coupon has to address my demand requirements at the point of receiving the promotional instrument (i.e. coupons).

Assuming that the product or service in the coupon addresses this need of mine, I will pay close attention on the the nature of the coupon.  This nature represents what the coupon seeks to communicate:

1. Is it a price discount? 
2. A conditional offer such as a ridiculously low price for the 1st 100 customers?

The nature mentioned above will determine whether I will make a purchasing decision or not (though I must admit that the second nature will not interest me).  Having said that, I must confess that this behaviour which I described earlier somehow indicates that I am reliant on coupons to make purchasing decisions for certain products.  This is because coupons intentionally influence the demand and supply of a purchasing decision.  Prior to this influence,I (i.e. consumer) may not have reached a point where the demand is so overwhelming that I have to make that purchase.  As such, coupons do play a major role in influencing my purchasing decision for specific products.  As a general rule, this influence will be the most effective for products which are not commoditized in the market such as mobile handsets, vehicles and consumer electronics.

Hence, companies that use coupons as a promotional strategy will need to make sure that the product or service in the promotion matches the need of consumers like myself.  This matching is aligned to my earlier posting on market segmentation on user databases.  In such instances, the medium which is employed to distribute the coupons play an important role in changing the usage pattern of consumers such as myself.  For example, a broad product category such as food and beverage, groceries or clothing will see the coupons being distributed through newspapers which are perceived as mass media platforms (see below). 

As the products get more specific such as consumer electronics, then the medium used to distribute the coupons will change accordingly.  For instance, a coupon that offers three months free membership to a gym will work best in magazines that focuses on exercise and general fitness.

Hence, the effectiveness of coupons to influence consumer behaviour is dependent on first and foremost, market segmentation and matching products to consumer needs.  Following this, the distribution of the coupons through the right channels is critical as such channels represent the proxy of consumer needs.  Mixing both together with the right execution will probably get me to buy more than I would usually have done (which may not be a good thing given this economy...).

- Darren -

When I think of direct marketers, the first thing that comes to my mind is: harassment.  And yet, the vast majority of of the direct marketing industry continues to adopt what I consider to be "untargeted marketing".  In most instances, these direct marketing firms acquire databases from other firms which seems to have developed a great business model to collate mobile numbers and email addresses of individuals.  Despite myself being part of the direct marketing industry with my present company, I still find it difficult to figure out how these database firms can get these mobile numbers with such ease with the strict privacy regulations adopted in countries such as Singapore.  But that is another topic to be discussed in a separate post.

But seriously, why don't these direct marketing firms target their offers to the right audience in the first place?  Speaking from my personal experience, I have been contacted by telemarketers (it seems that contacting unsuspecting individuals on their mobile handsets is the preferred mode of operation) throughout the working week with offers to join spas, take up a yoga course and sign up to a seemingly unlimited number of credit facilities from banks (which is not a good offer to make to today's materialistic Generation Y individual). 

In the past, I used to get these untargetted advertisements in my mailbox.

This led to a massive problem of such mailers being dumped by presumably frustrated home owners (I do make it a point to dump them in the nearby rubbish bin). This problem has since been solved by the company responsible for delivering the mail to our mailboxes with anti-junk mail features such as appointing the postman as the sole person with the key that opens all the mailboxes so as to deliver the mail to them.  Nonetheless, the junk mail still persist with the postal company now working as the advertising agent to deliver junk mail to home mail boxes.  This post probably reminds me to contact them and remove my address off their "junk mail" list.

But back to the most common mode of direct marketing - the phone call.  While the offer seems to be so attractive when articulated in an almost perfect manner by the telemarketer (no doubt from a script), the unfortunate ending to this conversation is a firm rebuke from me that "I simply have no need for the product"!  In particular, I find it absolutely frustrating to receive such calls when I'm at home with my family.  The video below best describes how I feel when I receive such calls at home.

While I have no intimate knowledge of the business practices of these direct marketing firms that made these calls to individuals such as myself, I do know, however, that targeting the right message to the right audience is a lot of hard work.  I know this as I do this on a daily basis in my role as a Database Marketing Manager in my firm.  The fact is that direct marketing is a function, and the delivery method is just a conduit between the firm and the individual.  As such, the best practices of direct marketing is consistent in the traditional and digital (media) world as the intent of the message can be communicated through phone, email, SMS, MMS, Location-Based advertising and mobile barcodes such as QR technology.

Hence, the differences in delivering the message should not overshadow the common rule that the right message needs to reach the right audience: We need to target the right message to the most appropriate market segment.  No one is saying that this is the nirvana of direct marketing, but it is certainly the best possible way to deliver the best effective advertising message to the right audience.

Using my role as an example, I will need to ensure that:

1.  The consumer database has no duplicate entries - Each user will only appear once in the database.

2.  Fill in as many demographic information for each user as possible.  Usually, surveys are the best means of getting this information.

3.  Segment the entire database by demographic profiles such as age bands (i.e. Under 18, 19 - 24, etc.) and occupation (i.e. senior management, manager, senior executive, etc.).

These 3 stages form the foundation of basic database segmentation.  What comes next will require absolute discipline and maximum attention to detail:

1.  Contact a sample of each segment to deliver the advertising message.

2.  Record the result of the entire interaction between the company and the individual

• Was the individual interested to find out more?
• How many stages did the individual go through in the interaction before deciding on the next action?  The stages are similar to what is described as the consumer purchasing funnel.
• What is the next action of this individual?  Accept the offer or decline?
• If the offer is declined by the individual, what would be the reasons behind this decision?
• When was the call made - morning, afternoon, evening or at night?

3.  Consolidate all the recorded details and identify patterns in the five points above within each database segment. 

4.  Create a regression model for each demographic segment and identify which variables (i.e. the points above) have the most significant influence to the success of the advertising message.

5.  Using the regression model, refine the advertising message and contact the users which meets the specification of a successful individual in the database. 

The 5 points made earlier represent how I manage the direct marketing business in my firm.  Undoubtedly, I left out the specific details of how I undertake these responsibilities as they are trade secrets.  What is commonly known, however, is that the digital world which my business is predominately in (i.e. online, mobile, and digital billboard advertising) gives me the advantages which the traditional world do not have.  One such example is the collecting of feedback data from my email marketing campaigns.  I am able to find out through a click of a button on the number of individuals who opened an email, clicked on the links in the email advertisement and how many times the email advertisement is being forwarded to another individual.  Such tracking abilities are readily available in today's online direct marketing industry.  These features are replicated, though in different variants, for the other digital media channels such as SMS, MMS and location-based advertising. 

As such, the efficiency of the campaign feedback gives me the data needed to crunch the numbers and creating the regression models needed to identify the variables needed to improve future campaigns.  It is only through this constant improvement where direct marketing firms can finally say with conviction that they have made the best effort possible to reach the right audience with the right message and hopefully, at the right time.  If these efforts are made, then we won't have instances described brilliantly in the video below.

- Darren -

As of the time of this posting, there's one more hour to go before SingTel starts the festivities leading to the launch of Apple's new iPhone 3G(S).  It will be interesting to see if the crowd matches the number of people queuing for the original iPhone 3G some 12 months ago.

Here are some photos leading up to the launch:

All interested Singaporeans are directed to join the queue.  However, all business customers are still welcome to visit the mobile operator, which is indicated by a iPhone 3G (S) signboard.

The crowd is building up slowly as the mobile operator mounted an extensive tented environment to cater for all weather conditions.

These individuals are likely to be one of the 1st 100s who will get their hands on the new iPhone 3G (S).

- Darren -

As Singapore awaits the launch of iPhone 3G(S) by SingTel on 10th July 2009, it is perhaps an appropriate time to see how the iPhone has influenced the mobile browsing habits of mobile users in the country.  I'll be using data from StatCounter which uses a sample size of more than 3 million websites with more than 4 billion pageviews per month.