Tailored direct marketing can be highly effective – but businesses first have to understand who their customers are. Mark Roy, founder of The Data Agency, reveals four steps to maximise the effectiveness of your DM campaigns
For businesses around the world, there’s phenomenal value in the effective management and application of data. Even companies that have small customer bases can often hold a large volume of customer data. Yet, despite the huge dividends on offer, some marketers and business people are still hesitant to implement effective data strategies. This may well be down to industry terms like big data making things sound much more complicated and impenetrable than they really are. Big data is really just ‘more data’, and developments in tech make it relatively straightforward for experts to sift through the data and advise companies on the best strategy to take.
Even data novices can ensure they’re maximising their return on investment in data by following some simple steps:
Focus on data quality over quantity
One of the biggest rookie errors is to think that data is all about size. That’s not always the case. Hoarding as much data as possible without a clear plan for its use is a waste of time and money. Less data but of a higher quality can enable businesses to extract more value from it, rather than trawling through vast amounts of low quality data where the nuggets of actionable insight might be obscured. Such accuracy enables businesses to drive a strong, positive response from their target market. This means taking simple steps to ensure they’re still likely to be interested in hearing from you. This might include knowing whether they’ve left the country, moved jobs or already purchased the product you’re trying to sell them. It might sound basic, but there is so much time and money wasted in reaching out to people who aren’t even capable of receiving communications, never mind actually reading or engaging with them.
Know your audience
The next step is to use profiling tools to build a picture of your customers. The technology exists to augment your data with detailed attributes, such as spending patterns, demographic and lifestyle characteristics, which can help determine who the most profitable people to target in your database are. You get what you pay for when it comes to data. Cheap, bad data leads to poorly targeted marketing campaigns which only serve to annoy and alienate potential customers. Investing in insight driven campaigns enables businesses to present clients more targeted offers and increase the chance of converting them into long-term customers.
Measure the response
Investing in more accurate targeting for outreach is half the battle. Measuring the impact of that outreach is the other. The best way to improve future campaigns is to learn from the past ones.
Data experts can help businesses to understand who, why, where, what and when of campaign engagement. This information can be invaluable in influencing the strategy, execution and effect of the next campaign. Analysis can divulge whether it was the direct mail-out, the email outreach or the follow up text message which provoked a response; it can divulge the time of day when response rates were highest. This information enables businesses to hone more accurate strategies for reaching their customers and work to decrease costs incurred through inefficient marketing activity. It also gives businesses the opportunity to highlight what the most effective tactics are in engaging their customers.
As the economy continues to recover, with many budgets still under incredibly high levels of scrutiny, marketers need to be empowered by the metrics and data behind their marketing activity to demonstrate that their outreach is generating a healthy ROI.
Keep it clean
The decay rate for B2B data is around a third. This means that after 12 months, a third of the people you’re trying to reach simply aren’t reachable any more. Companies have to ensure they aren’t wasting time and money still trying to reach these contacts, and instead prioritise keeping their database clean. It’s inescapable that it has to be kept up to date. Many put this off and end up wasting money mailing people who’ve moved on since they last cleaned the database. It’s important to keep track of where these customers have gone, using the most up-to-date tracking tools available. Everyone knows that retaining customers is more cost-effective than winning new ones.
Experiment
The ability to track the behaviour of customers in response to messages sent via multiple channels makes it possible to directly assess the content being sent out. This puts businesses in a position where they can – and should – experiment with the creative approaches being deployed. It means that marketers can tinker with trying light-hearted SMS messages, assess the performance of the outreach and decide whether it’s an approach or tone worth continuing. Customers respond to different messages from different businesses in different ways. Judging the performance of a variety of creative approaches can give companies a greater sense of their own identity and how customers perceive them. Finding an answer for ‘what are my customers responding to?’ can help shape the future development of the business offering. If you don’t try, you’ll never learn.
Companies which take the time to work out what they want from their direct marketing, implement the right tactics to achieve these goals and understand that data management is an ongoing task are putting themselves in the best position to profit. Tailored direct marketing can be highly effective – but businesses first have to understand who their customers are.
