Sweat your best asset – existing customers...

Whether you’ve got 1,000 or 1,000,000 customers these days you need to make best use of the ones you’ve got. Using Direct Marketing to extract value from an existing customer database needs thought, planning, investment and data driven decision making. Here are 10 suggestions to help get you started...

1. Deploy a campaign management system with a reporting module. Find one that integrates with your back office processing system. This will enable you to :-
a. Manage your campaign database
b. Track campaign history right down to customer level
c. Use profiling, propensity modelling and segmentation based campaigns and manage your test and learn program (see below)
d. Stay compliant with Data Protection legislation and
e. Track and report on campaign performance – which you should do at least daily.

By linking your back office enterprise system to your campaign database you can also ensure you have the most up-to-date personal and transactional information about your customers – vital for a ‘segmentation of 1’ which is what all customers want.

2. Cut out wastage (and do your bit for sustainability). Decile your customer database by breaking it into 10 equal size parts in order of response propensity. Use a “test and learn” approach with a robust financial model to find the point at which it becomes unprofitable to mail if the response rate dips below the economic threshold. In most databases this will be around the 3rd decile (in other words, 70% of your mailing is going to people who won’t respond in sufficient quantities to justify your spend investment!)

3. Build life-cycle direct marketing programs. Develop matrix based “next offer product” campaigns for your customers as they move up the value chain – make each offer progressively more compelling if they do not respond (don’t always start with your best value proposition). Over-lay operational contacts on this for an end to end view of contact points – and make sure you are comfortable with the level of contact.

4. Mail each customer no more than once every quarter – a customer database tires when you mail more often than 4 times a year.

5. Protect those you have – the first statistical model you should develop is one for attrition propensity. Improve the value proposition of those likely to go – and do it now, or they will inevitably churn over to your competitors.

6. Test and learn. On every mailing, split the base into “campaign” and “test” databases. When the test beats the campaign, deploy it as the champion. Test creative’s, price, incentive offers – whatever is in your toolkit.

7. Upweight the performance of DM campaigns with other media – a well developed and deployed advertising campaign can deliver a 50% uplift in response rates –provided the creative and targeting are harmonised across all the executions. Use one phone number and track responses based on date, time and “how did you hear about us” questions from your call centre agents. Recall beats ‘nth’ degree tracking anytime. And customers won’t remember 20 numbers that are based on your different marketing media but they will remember one “vanity” number (or web address) consistently promoted.

8. Time your mailings campaigns. DM dropping through the letterbox on a Monday or Tuesday gets a higher response rate than that dropping on a Thursday or Friday. Stay away from Bank Holiday weekends (into or out of them) and slow down the output if the weather picks up.

9. Harmonise your marketing mix internally. Make your staff ambassadors for your brand. They need to believe what you believe to make your customers believe!

10. There’s lots more where this came from. For the best in direct marketing call the best now – DMA on 01-6671144.