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Stored drive direct marketing demand

Direct Marketing

By James Tenser
Reprinted with permission from Brand Marketing

Where brand marketers and their retail customers get together, must direct marketing naturally follow?

Chris Hulse, president of Madison Direct Marketing here, says demand for his company's targeted direct mail products is being boosted by some current trade marketing activities. The trend is reinforced by the economics of customer databases and an understanding of what drives brand equity.

"The retailer is beginning to drive a little bit more usage of direct mail," said Hulse in an interview with Brand Marketing. "Through their frequent shopper cards they have seen the benefits of maintaining databases and communicating values in their store. That has create an interest and understanding on their part of the power of direct mail - or any direct communications."

He added, "It used to be that brand managers and salespeople never demanded direct mail as part of the trade budget. Today they are using it because they have measured it to be effective and because retailers are saying, "I like this medium, I understand how it works, and I'd like to see your brand use some of the case allowances we have earned toward direct mail."

As a result, Hulse said, Madison Direct is getting client queries not only from national brand management looking for targeted direct mail, but also from account and regional sales managers.

"Retailers are saying, "Could you feature your brand in my store in one of those targeted mailings?" We ate finding our clients are telling their regional managers, "Yes, that is possible,- and those trade budgets become part of what feeds the usage inside a targeted piece of direct mail."

Hulse and his company have handled several executions this year based on programs originating from the manufacturer-retailer relationship. Currently, Madison is working with a multibrand manufacturer to set up pre-packaged co-marketing programs of this type, where a retailer can apply accrued trade allowances toward 50,000 or 100,000 pieces of solo direct mail, or participate in an established shared mail program that offers higher volume at lower costs.

"So we are working with their sales force, saying, "Here's how you answer that question that is coming up," he said.

Direct-mail co-marketing is being enabled by some underlying economics as well, Hulse explained.
The cost of refined targeting is going down due to the huge and increasing supply of consumer data and improved software tools for mining it. Meanwhile, rising postal costs place a premium on accuracy and efficiency.

Not only do shopper databases hold clues for defining direct-mail targets, said Hulse, but some brands have used their own consumer databases to create profiles of who uses their products. When these profiles are "mirrored" or compared against large-scale consumer databases, Madison and some other mailers can generate large prospect lists.

So-called marriage mailings, Madison Direct's speciality, derive their effectiveness and favourable cost structure from careful matching of brands to a targeted group of high-potential consumers, he explained.

Hulse said the line of dividing advertising and promotion is continuing to blur. Direct mail, he said, is naturally a "hybrid medium," which functions as both an advertising vehicles that conveys information and builds brand equity, and as a promotional vehicle that influences short-term consumer behaviour.

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