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Agrimarketing : January February 2008
DIRECT/RELATIONSHIP MARKETING THE LATEST IN DIRECT MARKETING DIRECT MARKETING EVOLVES by Jeff Hammond Rhea & Kaiser Marketing Communications, Naperville, IL email@example.com For some marketers, direct marketing lives in the narrow back alleys of the marketing mix ... the scary character who jumps out of the mailbox shout- ing about easy credit and special offers, greeting its target with an endearing "Dear customer" or "Occu- pant" pet name. Perhaps obvious to others, quite a bit is changing in the world of direct marketing. For starters, the definition. In 2000, Rhea & Kaiser began to see an emerging convergence in our client conversations. The "direct" in response marketing was being men- tioned in the same breath as the "relationship" in the heretofore tech- nology-centric discussion of Cus- tomer Relationship Management (CRM). So here are a few specific changes and trends we're seeing in our clients' evolving dialogue with their customers: INTEGRATION Unlike isolated mail or phone-based direct marketing campaigns, many of our clients' direct campaigns today are integrating outbound mail, publication inserts, and even search engine marketing to lead responders to instantly accessible, customized Web pages, micro sites and personal- ized URLs (purls) coded to individ- ual customer respondents. MULTIDISCIPLINARY TEAMS As the definition of direct has evolved from describing a vehicle to describing an idea for building rela- tionships and experiences, technolo- gists, sales reps, analysts, market researchers, customer service stake- holders and customers themselves have assumed more prominent roles in defining and delivering dialogue- building marketing campaigns. MORE TOUCHES & SMALLER SEGMENTS An expanding depth and breadth of customer data is enabling organiza- tions to reach highly segmented cus- tomers with tailored offers and mes- sages. Segments are moving from geo- graphic and income clusters to those based on opportunity value, behavior and qualification. Overall direct mail volume appears to be declining, but the number of touches against smaller segments is increasing. CHOICES A dialogue presents choices to both parties. When choices are presented in offers, response options, and even in the whether or not to continue the conversation, our clients are generat- ing significantly higher response rates than with more traditional, one-size- fits-all approaches. Value in the form of white papers, technical informa- tion and credible expertise --- whether from in-house staff, recog- nized third party influencers, or even through client-enabled peer-to-peer knowledge sharing --- is elevating and sustaining engagement rates above and beyond the short-term rates garnered by trinkets and tchotchkes. OBJECTIVES AND MEASUREMENT Response rates, lead generation, and acquisition costs have historically been primary measures of direct marketing campaign effectiveness. We see increasing demand for more sophisti- cated measurements around lead quality, customer retention, the ability to deploy leads, and forecasting return on marketing investment around longer-term, relationship building sce- narios. Many of our clients exhibit an increased willingness to undertake multivariate testing of vehicles, mes- saging and offers in order to provide a quantitative basis for longer term planning assumptions. TOUCH POINT PLANNING Whereas direct campaigns often mapped out one or two contacts over the course of a campaign, dialogue plans are extending the planning hori- zon to encompass longer-term track- ing and management of touches across multiple marketing channels and brand experiences. And while plan- ning has looked further ahead, the business rules and assumptions gov- erning dialogue planning have become less rigid, guiding rapid response to mar- ket opportunities that arise outside of presumed planning scenar- ios. SOCIAL, CULTURAL AND POLITICAL We see increasing sensitivity among our clients to customer privacy, the eco-friendliness of direct vehicles, premiums and messaging. Regula- tors are increasingly affecting what our clients can say directly and to whom they can say it. And this, in turn, can impact the very nature of the dialogue our clients may realisti- cally achieve with their customers. HOW DIRECT IS IT? by Boo Larsen, Osborn & Barr Communications, Kansas City, MO firstname.lastname@example.org When marketing professionals use the term "direct marketing," it his- torically has referred to advertising to individuals. In reality, most direct marketing campaigns have not been true one-on-one communications with individuals but rather "blan- ket" approach campaigns that, with hope, included the particular audi- ence a company wanted to reach. That is rapidly changing, and direct marketing quickly is becoming a way to develop a more personal relationship with target customers through customer relationship management. One reason for this change is that the industry is becoming increas- ingly sophisticated in managing and utilizing databases. These databases provide the ability to capture even more detailed information about tar- get customers. In essence, they allow marketers to get a more comprehen- sive profile of these customers so they can determine who their ideal customers are and learn what is important to them. Sophisticated database management allows mar- 60 AgriMarketing January/February 2008 Hammond
2008 Marketing Services Guide
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