It’s been called many names, from direct marketing to response marketing to simply “junk mail.” No matter what it’s called, direct marketing as a discipline is arguably the king of the marketing kingdom because of its superior customer engagement rates and ROI.
Okay, so direct marketing hasn’t exactly been regarded as the sexiest part of the industry – the creative and media side has traditionally attracted the big budgets and all the glamour. But make no mistake, direct marketers, with their deep understanding of “addressability”, are helping to lead the way in solving one of the toughest challenges of our time: engaging today’s fast-moving, cross-device customers with relevance in each and every interaction.
Consider this: via digital channels such as email, direct marketers achieve enviably high click-through rates – 3.2% according to a recent study by Epsilon – by targeting segmented audiences of actual customers whom they know and who have already bought their products.
That’s 50 times higher than the average click-through rate of 0.06% on digital display media, a channel that targets ads using anonymous profiles and cookie-based behavioral data that may not be so fresh.
So as people-based marketing becomes the industry’s new center of gravity, it only makes sense that marketers of all stripes take a hint and borrow some important principles from the people who have been doing it right for decades.
People-Based Advertising: A Lesson from Direct Marketers
In direct marketing, brands communicate directly with customers through a variety of channels including text messages, direct mail and email. As a discipline, it has a long track record of success because of its focus on driving measurable results through personalized, data-driven marketing communications. Put simply, customers are at the heart of this direct-to-consumer approach.
And the data behind the effectiveness of this channel is vast:
- Marketing via email yields an average 4,300% return on investment for businesses in the U.S. That’s $43 for every $1 invested (Direct Marketing Association).
- 61% of consumers like to receive promotional emails (MarketingSherpa).
- 81% of U.S. online shoppers are more likely to make additional purchases online or in a store as a result of emails based on previous shopping behaviors and preferences (Harris Interactive).
- 85% of U.S. retailers consider email marketing one of the most effective customer acquisition tools (Forrester).
- Sixty-eight percent of teens and 73% of millennials said they prefer to receive communication from a business via email (Adestra).
Behind those impressive statistics is a simple truth: in exchange for giving brands their data, customers demand relevance. The marketers who focus on communicating with consumers as unique and individual human beings are going to win every time.
That kind of one-to-one approach hasn’t been the norm across marketing department silos, each with its discrete tools, strategies and budget. Look at digital media, where commoditized data and audience segments have become lackluster proxies for real people.
So what do direct marketers have that digital advertisers don’t? The answer is vital to the success of marketing across all channels today:
- Precision: Direct marketers know exactly who they are targeting because they tap into their CRM software, POS systems and other valuable resources to access rich customer data. They can focus on real people who are most likely to respond.
- Relevance: When marketers know who they are speaking to, they can add a personal touch and make special offers that are addressed to the customer’s needs. They can use first-party data to create meaningful segments so each message provides value.
- Timeliness: Finally, direct marketing is timely, and consumers hear from brands that know where they are in the shopping journey. Today, marketing automation and triggers make it easier for marketers to target consumers at just the right time and to do so at scale.
Addressability Pays Off
[Addressable media is giving marketers another avenue for reaching customers with the kind of tailored messaging they welcome– across the multitude of publisher sites where consumers go everyday for information.
And this addressability is making it possible for advertisers to serve ads that are appealing rather than annoying. Research shows that advertisers who apply this strategy experience very positive results. In fact, 83% of media buyers reported superior performance results across their clients using people-based targeting, compared to standard media buys.
What can the industry learn from direct marketers? The answer isn’t barraging consumers, who are already on email overload, with still more emails. Rather, the solution is extending the one-to-one addressability of direct marketing to more channels.
And that’s what people-based marketing is all about.
Originally published May 12, 2016