In a tough economy when businesses are slashing budgets and wanting a clear ROI on every Rand spent, there’s nothing like direct marketing to validate your marketing investment.
Dear Customer: you prefer customised, personalised marketing
By Paul Haglich
Marketing manager of the Production Systems Group at *Bytes Document Solutions
It's official: you don't like marketing guff addressed to Dear Customer as much as you like Dear [insert your name here]. Impersonal, generically addressed direct mail, e-mail, text messages, and other media have given way to the popularity of customised, personalised marketing messages.
This is the finding of not one but three independent reports released in 2008 and 2009. They are the Direct Marketing Association (DMA), the Print On Demand Initiative (PODi), and the Chief Marketing Officer Council reports.
The fax machine was arguably first patented in 1843 but really became practical in modern terms only after World War II. e-Mail crept into the world in 1965 when it was first used by bespectacled geeks in a lab on some IBM big iron, but again it was only by the mid '80s that it took centre stage as a ubiquitous communications medium. The short message service (SMS) standard was thumbed in 1985 and, by 2008, more than 75 billion messages were being sent annually.
These are three of the primary mass communications mediums and still in use today, but with their proliferation people experienced a deluge of messages that quickly became lost in the clutter.
Personalised and customised marketing have been the most successful progression across industries and businesses.
The PODi report measured response rates to static and personalised marketing communications that sought to achieve direct sales and generate and nurture leads.
- Less than 2% of people bought anything through generic, static marketing. The number climbed to more than 3% when the approach was personalised.
- The response rate when seeking leads was 3% using static marketing and almost 5% when using personalised communications.
- By far the greatest variation was in nurturing leads where programmes managed less than a 2% response rate using static marketing but almost 6% when using personalised communications.
The figures are echoed by the CMO Council report which that found that 40% or more of executives experienced a better response rate using personalised communications.
You may find it surprising then that marketers want still more proof that shelling out the extra cash for personalised campaigns to derive greater return on their investment and improve customer loyalty or retention is worth it.
It's true that personalised communications costs more than its generic counterparts. But it can be eight times more expensive to find a new customer than retain an existing one. Various studies also show that, depending on industry, up to 80% of new business comes from existing customers. Personalised transactional promotional marketing is a very effective way to reach existing customers. Personalised direct mail can deliver returns of 11 times the original investment, which is more than twice the average for any other medium.
The logic is undeniable. Personalised marketing works and there is more than enough proof. All that remains is for the uninitiated to gain rapid access to the requisite experience by finding the right partner to lead them through the process.
* Bytes Document Solutions is the authorised Xerox distributor to 27 sub-Saharan countries.
Paul Haglich, Bytes Document Solutions, (011) 928-9111, firstname.lastname@example.org
First published in 1995, the report is released every other year in conjunction with DMA’s Annual Conference and delivers historic trends, current year estimates, and one-year and five-year projections for direct marketing expenditures, sales, ROI and employment.
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