30 Apr The Revival of Direct Household Marketing
Apart from the Grocery and Pharmacy sector, businesses in Ireland have been severely impacted over the past few months. The spread of Covid-19 and the subsequent lockdown (that was put in place on the 28th of March) has essentially bought businesses to a standstill.
To their credit, some businesses managed to pivot from their normal operations to help fight the spread of this deadly disease. We have heard of distilleries producing hand sanitiser gel, automotive companies producing medical devices and even hotels becoming quarantine centres for the sick. It has been a monumental effort by the business community, and at the time of writing this, it looks like we could be over the worst. As restrictions are lifted over the next few weeks, businesses will start to re-open, and while this news is very welcome, there is still a lot of uncertainty around the medium and long-term economic impact of Covid-19. One thing is certain; there is going to be a lot of pressure on sales and marketing teams to come up with innovative solutions that will drive revenue in Q3 and Q4. The focus for staff will be to try and recoup some of the losses that have been inflicted on business during this challenging period.
Through conversations with clients and friends that work in sales, it is clear the ‘door-to-door’ sales channel is being adversely affected by the current situation. For obvious reasons, companies are restricted from selling or advertising products or services on the doorstep. This is a vital sales channel for several verticals, most notably utility providers and telecom companies. As the door closes on this sales channel, companies will look to revert to more traditional methods of advertising such as direct household mail.
Over the past decade, direct household marketing has been in decline, while Digital Marketing activity continues to eat up marketing budgets. Each time we search on Google, stream on YouTube, read an article in an online newspaper, scroll on Facebook, swipe on Instagram, we are bombarded by advertisements. We have become accustomed to these ads and have even developed a mental screening process to ignore them. Digital marketers are now dealing with sensory overload and very saturated advertising space.
Let it be said, I am in no way disputing that digital marketing works. I am studying towards a diploma in digital marketing, and I understand how successful it can be, particularly when trying to raise awareness of a brands products or services and the part it plays in encouraging consumers through the sales funnel. However, when you lose a sales channel as vital as door to door, there becomes a requirement to replace it with something else. I am making the argument that instead of doubling down on digital, businesses should at least evaluate other existing channels such as direct household mail.
I don’t think there has ever been a more appropriate and opportunistic time for businesses to invest resources in developing a direct household marketing campaign. With so many people temporarily laid off and many more hundreds of thousands working from home, the chance of people reading snail mail (or ‘post’ for the younger generation) has greatly increased. Another important factor to note is that, sadly, many people are at risk of experiencing reduced household income. When this happens, your customers and your competitors’ customers are at a much higher risk of churning because they become more sensitive to price. This is both an opportunity and a threat; however, by adopting a more targeted approach, you can segment your customers and prospects, ensuring you are always getting the right message to the right household.
That’s where Gamma’s Geo-Marketing consulting service can help. We help leading Irish companies make better use of their data. By combining customer sales data (online and offline) with market data that Gamma collects and maintains, businesses can create more targeted campaigns. We can identify customers that are most likely to churn; we can find households that match your current customer profile; And when all the analysis is done, we can provide you with all the information you need to target these neighbourhoods.
Gamma’s Geo-Marketing expertise can reduce costs and increase penetration by targeting only those prospects that are interested in your product or service.
As the title suggests, I believe we will see a resurgence of direct mail marketing over the coming months. Fundamentally, there was nothing wrong with this channel in the first place. According to the Data & Marketing Association, in the US, 42.2% of direct household mail recipients review the material received. Only 22.8% say they don’t read it at all. Compare that to average email open rates which (depending on the industry) is about 20% – 30%. The Data & Marketing Association also reports that direct household mail response rates are on average, 4.4%, compared to 1% for email, making it the top channel for direct response.
Aside from the cold hard stats, direct mail is more tangible than other channels. When a prospect picks up your mail and opens it, there is a physical bond between your brand and that person. According to a study by UK Royal Mail, direct mail is more effective because “giving, receiving and handling tangible objects remain deep and intuitive parts of the human experience”. When you compare that to consumer sentiment towards digital ads, studies show that many people find them annoying and intrusive. Direct household mail also tends to have a longer shelf life than email or other digital marketing advertising. We tend to hold on to household mail longer, especially if it includes coupons or special offers. With a bit of creativity, you can even merge your offline marketing activity with online campaigns. One example of this is the use of QR codes, social media tags, and online offers to direct the person to your website or social media. These techniques can also be helpful when tracking the success of your campaign.
So how can companies ensure they get the best ROI on their direct mail campaigns?
The secret to running a successful direct household mail campaign is to treat it the same way you would with an online campaign. Using data, you can target your audience segments by message, acquisition or retention and demographics. Delivering the right message to the right household will increase your chances of getting a better return on investment.
@ 2020 Gamma.ie by Chris Davies
Gamma is a solutions provider that integrates software, data and services to help our clients realise greater benefits from location-based information. With Gamma’s Geo-Marketing service, you can create a highly specific, targeted direct marketing campaign, based on accurate customer data and analysis to give above-average results at lower costs. You don’t need to waste money sending coupon offers to everyone near your store or in your loyalty database as it often wastes money and leads to little long-term return on investment. Gamma’s strategy is proven to increase campaign performance and maximise the chance of better redemption rates.