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Why Database Marketing is Still Relevant in 2015

Posted on 4.29.2015

:: By Helen Foley, Elanders UK :

'Direct marketing is dead!'

This is what the naysayers will eagerly tell you but, of course, it's not true. Smaller businesses and startups can't afford to spend their marketing budget on things that don't guarantee a measurable result. Branding exercises like creating viral posts on social media and running high-profile TV spots are a luxury they can't afford, not least because their impact is notoriously difficult to measure.

The impact of direct marketing, on the other hand, is not. With the chance to hit targeted customers with a clear call to action, direct marketing is capable of boosting sales, generating leads and recapturing the attention of existing customers. But that's not to say it's easy...

Things to remember about direct marketing

A survey of 3 million people conducted by Return Path in 2013 found that the average consumer receives 10-plus pieces of email marketing every single day. That number is likely to be even higher two years later. Unless your message is clear, concise and contains a tangible benefit, it will get lost in the noise.

Fortunately, direct marketing is one of the most testable methods out there. Incorporating unique links and landing pages makes measuring the effectiveness of campaigns easy. Just make sure you act on those results when you're planning your next campaign.

You should also test your marketing messages with sample groups. Can't afford a focus group? You could always think about running them past some of your most loyal customers, perhaps in exchange for a freebie. While you're at it, don't forget to ask them what attracted them to you in the first place. More likely than not, you'll be able to use that information in your campaigns.

The database is the key!

Aside from the message itself, the database you're using is by far the most important part of any direct marketing campaign. Using a dated database that's full of duplicates, typos and users who have already requested to be removed from the list will never turn out well.

You should also ensure that the database is relevant to your product. You're unlikely to get far with a database of, say, entry-level marketing professionals if your product requires the approval of a CEO or CMO. No matter how cheap the database is.

Anyway, until you've defined what a lead is worth to you, it's very difficult to say what 'cheap' is. If a database costs $3,000 but only brings in 10 paying customers with a lifetime value of $100, the campaign hasn't been successful. True, you can blast the database again, but the law of diminishing returns suggests that you'll wring all of the value out of it after a few messages.

Even with a good database, you should be cautious not to overestimate the response your campaign will receive - in most sectors, an open rate of between 20 and 30 percent and a click rate of between 6 and 10 percent can reasonably be expected. Econsultancy estimates that emailing a database of 100,000 might result in somewhere between 26 and 149 sales.

When you're figuring out your budget for buying a database, use whatever data you can to figure out your break-even point (e.g. how many sales you need to make to cover what you spend). This will help you spend more wisely, and means that any additional sales are a nice bonus!

It may be tempting to use whatever database you can get your hands on, but verifying that those on the list have agreed to receive unsolicited/third party communications is an absolute must.

Neglecting to do this will, at best, frame your business negatively in the minds of recipients and/or get you blacklisted as a spammer but, at worst, could result in legal action. It's not glamorous, but you should always make sure that you're acting in compliance with the Data Protection Act.

The next time someone tells you that 'direct marketing is dead', ask them which proven, targeted, testable and scalable methods they're using in its place. Odds are they won't have an answer for you.

Article contributed by: Elanders UK is part of Elanders Group, which is a company with operations in 15 countries on four continents. Elanders Group offers its customers global solutions for print & packaging, supply chain management and e-commerce.

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