I was chatting to the CEO of a fast-growing e-commerce company the other day. We got on to the topic of customer retention and specifically what methods he was using to drive repeat purchase.
The importance of email marketing was of little surprise. Like most online businesses, highly targeted, personalised communications via email are a core part of this organisation’s tool kit. It delivers high frequency at a low-cost – enabling the company to “goal-hang” in front of customers and convert latent interest.
Perhaps more surprising was the role of direct mail in driving repeat sales. For many marketers, DM has long been regarded as a dinosaur – a costly and out-of-date method of 1-to-1 communication that has been rapidly usurped by the raft of exciting, and far cheaper, digital channels to which we now have access.
But that viewpoint is fundamentally flawed. Just as the growth of the internet has created more and more ways in which we can reach customers in a targeted way at scale, so it has created a highly cluttered media landscape. And the downside of that is the lack of cut-through being achieved. And as Bill Bernbach said, "If no-one notices your advertising, everything else is academic".
Consumers are bombarded with messages from the moment they wake up to the moment their head hits the pillow. Cutting through this noise is more critical now than it has ever been. The focus for many CMOs and Marketing Directors has been to shift their spend into channels which allow them to reach more people for less budget – an approach which seems on paper to make sense. However, the relative impact of each of those messages has reduced as the volume has increased. And that is often not fully considered.
With this in mind, the CEO decided to buck the trend in his sector and push a proportion of his budget back into Direct Mail. The results he has achieved have been astonishing. Yes, costs are higher than email. But the response rates he’s achieving are so significant the investment has been well worth it. More than 1 in 20 people receiving a piece of DM, are making a purchase.
Not only is this delivering a very healthy ROI and repeat purchase rate but the tactile and high-quality nature of the communications means he’s also strengthening the relationship with all his recipients in a way that isn’t necessarily so achievable through digital marketing.
Why is it working? Well, some industry statistics show that DM has grown in the last 10 years, but anecdotally I find fewer and fewer sales communications in my post box. Competition for my attention is therefore low. Compare that to your email inbox, where you could be fighting for share of voice amongst upwards of 100 emails a day, and you begin to see the benefit of DM. And you get the added benefit of a 100% open rate – after all, who throws post in the bin without looking at who it is from?
It’s not just DM of course, there are other channels that can deliver excellent cut-through if done well - TV, Outdoor and Press for example.
So, next time you’re assessing your marketing mix, make sure you consider channel cut-through as well as cost per contact. You might find it transforms your results!
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