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Customer marketing - as opposed to prospect marketing - generates a significantly higher response, according to research commissioned by marketing firm CDMS. More interestingly, though, the survey of UK-based senior marketers found that event-triggered customer marketing produced an average of 35% more responses.
The increase in reported response rates from event-triggered mailings to existing customers confirms The Wise Marketer's often stated view that using relationship marketing data (such as data gathered from loyalty programmes and transaction histories) to generate relevant marketing messages can have a significant impact on a campaign's success.
Better than average
According to Richard Higginbotham, head of marketing for CDMS, "While the research shows that marketing to existing customers produces a response uplift averaging 33.4%, the highest quoted answer to this question was 75%. This proves that well executed customer campaigns could reap great rewards."
A further refinement to customer retention and development activity, CDMS reports, is already being implemented by many smart marketers and agencies.
Event-triggered marketing
Rather than simply processing regular customer marketing campaigns in batches, some marketers have begun to use their database marketing systems to target offers based on specific, defined customer behaviour patterns.
These event triggers instruct the database marketing system to send a targeted offer to the customer, with timing being set anywhere from the same week to the same day, depending on time-sensitivity and the marketing medium used.
Indeed, the industry's growing demand for transactional data (which provides a kind of proxy when a company does not have measurable triggers based on its own customer data) is an indicator of the increasing importance of communicating with customers at exactly the right time.
Examples of triggers
Event triggers can include almost any customer action or interaction, including (among many others):
- A customer service call;
- A type of transaction;
- Passing preset spending levels in a particular time period;
- A customer's birthday.
Quantifying the response uplift
The survey also examined the key question of the extent to which different media combinations produce a response uplift. Survey respondents were asked to gauge uplift against a single direct mail piece with a postal response mechanism.
Direct mail with response via post and a freephone number was gauged as producing a 20.8% uplift. Direct mail with response via post and e-mail was gauged at 20.2%, while direct mail with response via post and a personalised web link was 18.9%. Direct mail with response via post and a web site stood at 14.3%, while direct mail with response via post and telephone scored 14.1%, and direct mail with response via post and SMS (text message) scored 12.4%. In all cases, the addition of extra response media was felt to produce a significant uplift
Conclusion
"These findings emphasise that UK marketers are becoming more sophisticated in the way they communicate with customers and prospects," concluded Higginbotham. "And the same goes in reverse: There is clearly a demand from the consumer to be able to access relevant information through the channel of their choice, which means that the more channels an organisation offers their customers, the better the response they will get. But the research also shows that ignoring traditional channels will be to the marketer's detriment, with direct mail still driving the greatest share of response to the telephone and e-mail channels."
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