Thursday, January 12, 2006

The New Direct Marketing Construct

Gone are the days when direct marketers simply put out a new promotion each quarter, seeking to generate new revenue based on a one or two percent response rate. Now, direct marketing is a long term relationship strategy where we communicate and motivate with people in a database and every communication builds on the last contact.

Direct Marketing today is so strategic that it must be developed within an enterprise-wide Customer Management framework. It's been nearly 10 years since CRM first came on the scene. You'd think we had it all worked out by now. Instead, Customer Management is practically non-existent at most companies. Direct Marketing is the powerful ally to CRM, but it calls for high-level corporate and brand strategies to consider customer acquition and retention objectives within a customer lifecycle management point of view.

The new Direct Marketing Construct first must be developed in concert with corporate and brand strategies to define a customer management (or database management) strategy that governs who, when and how communications will take place over the lifetime of the relationship with each prospect or customer.

Too often, these high-level strategies are not worked out clearly, or are not understood the same by key people ... confusion reigns, and if it does, the direct marketing communications to customers will be out of alignment with what the company and brand are trying to accomplish.

The Customer Management Strategy is executed through a continuous, value-enhancing set of processes for content development, analytics, data management, campaign management, event trigger management, and campaign performance tracking. Each of these processes should be flow-charted and documented so that everyone on the team is fully aware of how they work and interrelate.

As you then move down into execution, there is an additional layer in the Direct Marketing Construct, namely, a series of Customer Performance Accelerators ... the factors that you use to build out each customer initiative. These CPAs need to be utilized every time, whether the initiative is aimed at one customer, a group of similar customers or a yet wider cast into the marketplace. The specific accelerators include:

Audience Persona Profiles for segmentation and aggregation of targets for each campaign
Product or Service Offerings that deliver desired value to these targets
Messaging that communicates the positioning and value proposition with clarithy
Contact Triggers that determine the frequency and timing of communications to targets
Communications Media to deliver messaging most efficiently and effectively; typically this calls for cross-channel touchpoint management
Incentives or Catalysts to motivate targets to take desired action
Creative Concepting to deliver messaging in a compelling, attention-getting and memorable manner
These seven accelerators when developed in cohesion are the factors that will change customer behavior. They must be driven by quantitative metrics wherever possible. Incidentally, while variations may exist for specific campaigns, these seven accelerators are arranged in priority sequence. That is, pay most attention to the top of the list because that's what drives performance the most.

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