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DMA Report Finds Direct Mail Still King
This entry was posted on 5/21/2008 11:58 AM and is filed under Direct Mail,Database Marketing.
New York, NY, November 27, 2007
— Internet marketing is hot and email marketing is on fire, but
professionals who track new customer return on investment (ROI) still
concentrate most on direct mail. These and other
survey results are in the second edition of the Direct Marketing
Association’s (DMA) Customer Prospecting and Retention
Report.”
The
DMA report builds on its 2005 predecessor by comparing and contrasting
previous data with new results, while adding relevant information about
how marketers are reaching, converting, and retaining customers in
today’s multichannel marketing environment. For example, new in this updated edition, DMA broadened the study of database management, and especially customer marketing databases.
“Direct
marketers cannot thrive without a thorough comprehension of how to best
use all of their available resources — including financial, technical,
and personnel — in their efforts to acquire new customers, convert them
into repeat purchasers, and then retain them as loyal, lifetime
customers,” said Anne B. Frankel, DMA senior research manager. “The
aim of our Customer Prospecting and Retention Report is to provide a
body of knowledge of what techniques are now being used to further
those all-important marketing goals.”
“Reaching,
converting, and retaining customers is the lifeblood of any company,”
said David Shepard, president of David Shepard Associates, who
partnered with DMA on this report. “This study
examines how client-based companies go about the business of budgeting,
new customer acquisition, retention, loyalty, modeling, segmentation,
testing, and database management. Plus,
reflecting today’s multichannel climate, this second edition explores
up-to-the-minute practices by segmenting survey respondents according
to their use of the most advanced marketing tools, such as testing,
predictive modeling, segmentation, and customer segment managers.”
The
DMA study allows members of the direct marketing community to benchmark
their performance with survey results that are broken down by type and
size of firm. The results provide an up-to-date
snapshot of how companies engaged in direct marketing are managing key
tasks such as customer acquisition, promotion and retention, media
channels and operations, and budgeting.
Most findings are analyzed by three categories: overall respondents, primary market, and revenue.
The report’s key findings include:
- 54%indicate that they consider lifetime value in their marketing decision.
- Less
than half (43%) of those surveyed have a loyalty/rewards program
in place; of this group, 47% say that it is a very or somewhat
important in keeping a customer.
- When
asked about the importance of a variety of factors in contributing to
their overall marketing success, 46%of direct marketing
professionals rated testing and tracking results and performance as
“very important” (with an overall mean rating of 4 on a scale of 1 to
5), closely followed by access to new prospect names (37%, with
an overall mean rating of 3.8).
- About 35% of all those using direct mail track both response and value at the key code level. Another 31% track both response and value at the campaign level. The other direct mail users track just response (30%) either at a key code or campaign level.
- 56% of the respondents have developed proprietary prospecting
databases, abandoning the old practice of renting names for one-time
use and the usual (and repetitive) merge-purge routine.
- When
asked how much testing they do by channel, respondents rated email,
vertical lists, and compiled lists near a 3 (using a 1-to-5 scale,
where “1” means no testing and “5” means extensive testing).
- Offer and creative continue to be the most tested new customer acquisition package elements. On the strategy side, only offer and creative scored above a 3 (on a 5-point scale), while frequency of contact scored a 2.7.
- About 43% of those surveyed test the old fashioned way — i.e., one variable at a time.
- About 52% of those who use household level models rated them as effective (a “4” or “5” on a 5-point scale).
- 38% of those using models scored ZIP Code models as being very or
somewhat effective (a “4” or “5” on the scale where “1” is not
effective and “5” is very effective).
- Among the companies that employ statistical models, 52 percent have an internal modeling staff.
DMA conducted the survey from April to July, recruiting 441 respondents via email and other online sources. Of that number, 253 direct marketers completed the entire questionnaire.
Source: DMA press release, November 27, 2007
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