Case studies: The power of electronic direct marketing

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Having a website does not make your business successful. In most product categories, consumers rarely visit the site. Certainly not without a reason. Prajakt Rautshows you how to entice the customer to your site.

For example, a consumer may visit a cell phone brand’s website when he is s/he is in process of buying a handset. After the purchase is made, offline or online, the consumer has very little reason to revisit (unless, of course, the site offers stickiness like ringer tune downloads, etc.)

Across product categories, brands have a need to keep the dialogue open with consumers. In the absence of any other efficient medium of communication, brands use mass media advertising or direct marketing or PR as the tool to stay connected with the consumer. While the traditional communication mediums cannot be replaced, no matter how expensive they are, brands can establish a strong connection with their consumers in the form of Electronic Direct Marketing (EDM)

What is EDM?
EDM is permission-based email marketing to relevant consumer segments. Email messages can be sent as plain text or as rich HTML mails, both with links to relevant sections in the brand’s web site.

Why EDM?
EDM is a great, low cost solution for brands to stay continuously connected with their consumers. EDM allows brands to communicate with their customers to cross sell, up-sell or provide value through content and other tie-ups or partnerships.

Steps to a great EDM strategy
Create a good database
Many brands will already have a large enough database. Even if they don’t, every brand will certainly have an opportunity to collect a good database of current or prospective database.

e.g. consumer durable brands that have not got large number of registered users on their websites have the opportunity to collect consumer profiles through their offline presence. A refrigerator manufacturer can collect profiles of walk-in consumers by promising to send them an e-mail on ‘tips on buying’ a refrigerator along with a comparison with other brands.

Segment the database well
Traditional direct marketing usually gets very low response rates (generally 4-7%) because one single message is sent to the entire database. In a digital environment, as in EDM, it is possible to ‘microsegment’ to make the message more relevant and hence generate a better response rate.

e.g. a retail finance brand can segment the banking divisions database to create a segment of people who have more than $2000 as their monthly average balance. This segment is likely to get a far higher response for an EDM for investments in mutual funds than the entire banking customers database.

Create the most relevant messages
Identity the needs, wish list or pain points of the segments that you have generated. Create the incentive package or content that is most likely to excite that segment. Even if the content is the same across some segments, the presentation and format or language / tone of communication could be different.

e.g. while selling a vacuum cleaner, you would probably want to give a different message to a housewife (“Cleans so fast it leaves you more time to spend with your children”) than you would give to a career woman (“cleans so fast it leaves you more time to focus on your career”).

Test your campaign before release
A digital environment makes it very easy and absolutely inexpensive to test an EDM campaign. Brands can create multiple messages (and wherever applicable, target multiple segments) and send it to a smaller group of consumers to check the response. Depending on the action standards set, the brand can choose the campaign that delivers the best results. While testing, a brand can evaluate different variables – the copy, the visuals, the incentive, the content, etc.

Track the response to your campaign
90% of emails get opened within 40 hours of receiving them. Brands can, therefore, get instant feedback on the impact of their campaign.

While tracking response, brands can get feed back on various parameters:

• Number of people who received the message

• Number and percentage of people who opened the mail

• Number and percentage of people who clicked on the links (and if there are multiple links, which links were clicked)

• Time spent on the mail and on each section the link took them to

• No of referrals, if requested

• No of conversions or purchase

• ROI in case transaction was enabled through the mail or site

CRM solutions like Kana Connect have in-built campaign tracking tools.

Update/modify the consumer profile in the database
Every interaction with the consumer should be viewed as an opportunity to understand more about him. Learnings from each interaction should be captured and used to update the profile in the database to ensure higher relevance (through better segmentation) for the next campaign.

Benefits on an EDM campaign
Low cost opportunity to keep in touch with your customers and keep you on top of their mind.

• Opportunity to proactively communicate with your audiences without having to wait for them to arrive into your store or web site

• Extremely inexpensive and fast to execute – no pre-production and production costs and time span as in printed direct mailing

• Ability to micro segment consumers to make the messaging relevant and increase response rates

• Ability to track response and further your understanding of the customer

What can brand use EDM campaigns for?

• Cross sell products – promote other products from the brands or company’s portfolio e.g. credit cards to banking customers of a retail finance brands

• Up-sell – migrate consumers to higher end products / brands within the portfolio

• Provide information and news that will make the consumer feel nice about being a part of that brand’s family

• Value adds through partnerships – brands can use the power of the database to get other relevant brands to provide incentives to your consumers.

Businesses need to have a clear game plan to use the Internet as a business development tool. If a brands web initiative depends only on the consumer coming to the web site, it is compromising on the potential of the web initiative. Once brands start seeing the Internet as a powerful business development tool and define sound strategies to capitalise on the opportunities, the results of the web initiatives will improve significantly.

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