Helen Bradley explores how new technologies are helping companies to communicate with their customers with efficient electronic technology that is cheaper and faster than traditional methods, and provides more data and feedback, too.
Compared with electronic systems available now, the traditional form of direct marketing wasn’t really very direct at all. It involved printing offers and promotional material and posting them to customers in the hope of a response. Now offers and information can be tailored to customer needs and tastes.
Technology has not only changed the way we communicate with each other, it’s changing the way businesses communicate with their customers. The result is instant communication that is often much cheaper and can be tracked with precision not possible with more traditional direct marketing methods. So, will modern technologies like email and SMS replace printed mail-outs, or is there room for a range of communication options in your marketing arsenal?
The newer technologies such as email and SMS marketing offer the benefit of being inexpensive and fast. An email can be created and sent quickly and is received within minutes. However, anti-spam legislation that came into force in April 2004 limits SMS and email marketing to customers who specifically opt to receive these messages. You can’t send them to anyone the way you can send mail or make a phone call. That said, when email and SMS are used in combination with detailed information about customers’ preferences and buying habits to provide a tailored offer, they are a very powerful marketing tool.
Kurt Opray, CEO of Impact Data, says it’s vital you send communications that are relevant to a particular customer. This ensures increasing the customer’s satisfaction with receiving the messages and reduces the ‘opt out’ level. Impact Data offers direct contact solutions for companies marketing via SMS, email, post, and fax. Opray’s clients are looking for the highest possible ROI for their efforts and, to do this, they target their customers with offers of interest to them based on information known about the customer. Much of this comes from an organisation’s POS system which is uploaded to Impact Data’s servers and managed from there.
Impact Data provides a simple interface for companies to create the mailing message and determine how and to whom the message will be delivered. To keep data accurate, email bounces are monitored and customers can be sent an automatic SMS message indicating this and asking them to provide an updated email address by reply SMS. Some companies cover both bases by sending emails and following up with hand-mail if someone hasn’t read the email. Opray says benefits to his clients are with cost savings, as email incurs no direct charge and SMS is less expensive than regular mail. However, he is quick to point out that readership for traditional mail remains higher than for email, although email is easier to track: “You know who has read it, when and what they’ve clicked on to learn more.”
These days, there is a lot of focus on accurate data as a key to a successful marketing campaign. QAS develops software that helps clean and maintain accurate data, and Glenn Parker, managing director, is conscious of the challenge that business has in keeping data clean. “Around 17 percent of the population moves every year,” he explains, “even if you’re not adding people to your database you’ve got to meet the updating challenges or you’ll lose customers.”
Parker suggests there are cost savings and other benefits in keeping data clean. “Don’t underestimate what poor data is costing your business,” he cautions. “It’s easier to work at keeping those customers you already have than it is to go chasing new ones.” He also points out that with clean data containing verified addresses and an eight digit delivery point identifier (DPID) many businesses could take advantage of significantly reduced postal costs on even small mailings (300 or more). His company’s software makes use of the Australia Post postal address file (PAF) and sits on an organisation’s own computers, ensuring correct data entry in any application from a small Excel workbook or Access database to a larger POS or other system.
Business owner Katie Pascoe, of Flying Flowers Australia, knows all about the problems of incorrect data. She gets the majority of her flower orders from UK buyers and she says nearly 70 percent of the addresses we get have errors in them. “These are cleaned and reformatted to standard Australian address formats to ensure correct delivery which is vital when you’re dealing with a perishable item like fresh flowers.”
While Video Ezy’s customers live closer to home, clean data is vital to this business too. Videotext comprises 570 individual franchise owners each with separate customer databases (with a total membership of 5.5 million) making the issue of data cleanliness exponentially more complex. Christian Ward, CRM project manager at Video Ezy, has been working on the company’s marketing efforts, starting with the data collected. Franchisees now enter clean customer data at the store level (the process is managed by QAS QuickAddress software) which is replicated into a central data warehouse. As Ward points out, “We couldn’t do anything without clean data. This lets us target offers to the right customer at the right time with our CRM ticketing.”
The Video Ezy solution, Passport to Entertainment, is a ticket, similar in size to an airline boarding pass which includes the customer’s name and an offer. “Our redemption rate on average is 17 percent and up to 40 percent for individual stores, and this compares favourably to three to five percent for traditional direct mail,” Ward explains. “Our franchisees are seeing a very short ROI (two months), for the expense of putting the system in place.”
Video Ezy’s success in an industry that is highly competitive and experiencing a shrinking market has been recognised not only by the Australian Direct Marketing Association which awarded Video Ezy best in Overall Effectiveness as well as Gold in the CRM category in its annual awards last year, but also by companies approaching Video Ezy with an interest in cross-marketing opportunities.
While the association between email marketing and spam might seem problematic, Paula O’Connell, managing director at Returnity, an Australian company specialising in email marketing, says the medium has a place alongside phone calls and direct marketing. “When it is permission based, the customer is indicating to you that this is their preferred way of being contacted.”
Shar VanBoskirk, analyst at Forrester Research, says that almost one-third of online households still find email a great way to find out about new products and offers, and only about 10 percent find ‘permissioned’ email annoying, compared to 31 percent for direct mail and 54 percent for banner ads.
Even industries charged with servicing customers by providing information rather than buying opportunities are finding the new technologies attractive. Leanne Delany, national marketing officer for the National Institute of Accountants (NIA), a Returnity client, sends regular email newsletters to the majority of the institute’s 14,000 members. Newsletters are created from Word files by Returnity using HTML and text templates. When comparing email to print, Delany says: “Emails provide us with an efficient way of gauging the success of our information campaigns through aggregate results that allow us to benchmark against industry standards such as overall open rate, fail rate, and click-through activity.&rdq
The NIA uses these aggregate results to offer better services to its members. And through this information and other member feedback, the NIA has broadened its email newsletter campaigns with the addition of a technical newsletter now in its 77th issue. In addition to focusing on keeping data clean and accurate, Delany also stresses the need to keep up with technology. NIA members come from a wide range of sectors including large corporations, government and financial institutes, as well as public practitioners. Depending on technical capabilities, some members receive text only and others HTML. While some would prefer attachments, those in highly secure environments aren’t able to access them. “It’s a balancing act to ensure that the emails can be read by everyone,” she adds.
Other technologies that are playing a role in the market include voice marketing, where a business makes a phone call and plays a short voice message to the customer. Companies like Premiere Global Services offer a streamlined interface for managing this, and lists can be created in programs as simple as an Excel workbook. A hot key transfer option lets the customer to respond instantly and routes them to a live operator to make an order or get more information. The reporting process includes details of how long a person listened to the call, which numbers were answered, and which ones went to voicemail. Doug Moore, director of broadcast solutions at Premiere Global Services, says: “Compared with direct mail, using voice broadcast to deliver marketing messages or ‘voice coupons’ is a fraction of the cost of the most rudimentary mail piece, and the response rates can be four times (or more) greater. Plus, you have comprehensive reporting to track the success of a campaign in real-time.”
This ability to monitor closely the results of a campaign is easier with technologies like SMS, voice and email than with hand-mail, and this is an important part of analysing the campaign’s success. According to Gartner Research, the first requirement for measuring the response to a campaign is a clear understanding of whether the offer reached its intended target. This lets you “understand the true response rate to the campaign (by being able to differentiate non-interest from non-awareness)”.
Whatever your business, think again when planning your next marketing campaign. The ‘postcard in the mail’ solution may not be the most cost effective or attractive to your customers. Instead, voice, email, and SMS may be better ways to contact your customers with offers targeted to their buying preferences. Whichever you choose, make sure your customer data is clean and relevant, so you’re getting the most from your marketing dollar.