The ability for consumers to switch suppliers has never been easier. As the balance of power has shifted in favour of the consumer and customer churn rates plague many an industry, marketers are constantly looking for new ways to connect with the customer and hold their attention.

Competition is on the increase, with barriers to entry for smaller, lively new entrants now virtually nil. Not only is it a growing task for marketers to keep their customers, it is an even more challenging one to then increase the amount of business each customer does with the organisation. Established players are anxious to secure their customer base and leverage the brand reputation that they have established over many years. New entrants want to radically alter the playing field, moving the goalposts with new pricing points, product bundles or service models.

The advent of e-commerce alternatives in most retail, telecoms and financial services markets has introduced a level of easily-accessed price transparency and alternative offerings that make is almost inconceivable for any firm to ignore the imperative of reaching their customers and prospects through multiple channels. However, simply highlighting the need to combine channels to the consumer belies the complexity of the task. Different media have different penetration levels. 61% of British homes now have an internet connection, and 59% of UK adults say they have used the internet in the last three months, whether from home or work(Source: ONS). Approximately 51% of homes have broadband.

These are critical statistics, since they immediately tell us that where a company is trying to reach a typical cross-section of the UK population, making a website the principal outbound advertising or inbound response method immediately restricts access to half of the target audience (dial-up connections are only really useful for email marketing). On the other hand, mobile phone penetration is over 110% (many people have more than one phone), yet campaign experience tells us that response rates remain relatively low to outbound campaigns through this channel.

What about those targeting tech-savvy, highly connected consumers? Here, web response is a very appropriate tool; but how is the initial impact to be made, considering that unsolicited email marketing has now been outlawed by the EU Directive on Privacy and Electronic Communications? As technology develops and media channels change at rapid speeds, it is important therefore to understand how individuals want to be communicated with.

New research commissioned by CDMS amongst senior marketers in the UK has found that customer marketing generates a significantly higher response than prospect mailings. While the research shows that marketing to existing customers produces a response uplift average 33.4%, the highest quoted answer to this question posed to the panel was 75%. This highlights that well executed customer campaigns could reap great rewards.

A further refinement to customer retention and development activity is being implemented by leading marketers and agencies. Rather than simply process regular campaigns to customers in a batch fashion, some organisations have leveraged their database marketing systems to target offers at customers only when they behave in a particular way. These ‘event triggers’ — which might include a customer service call, a type of transaction or going through a spending level in a particular period - instruct the database marketing system to send a targeted offer to the customer in question anywhere from the same week to the same day, depending on time-sensitivity and marketing medium used.

The research also found that event triggered marketing to customers produces additional 35% response uplift, indicating that using relationship data to generate relevant messages has a massive impact on campaign success. Indeed, the demand for transactional data, which provides a proxy where a company does not have triggers in their own data, is an indicator of the growing importance of communicating with customers at the ‘right’ or appropriate time.

The survey also examined the key question of the extent to which different media combinations produce response uplift. The survey respondents were asked to gauge uplift against a solus direct mail piece with a postal response mechanism.

In all cases, the addition of extra response media was felt to produce a significant uplift, with the primary findings being:-

• Adding additional response channels produces an uplift that varies from 12% (SMS) to 21% (Freephone)
• Personalised URLs (19%) produce a greater response uplift than a non-personalised Website (14%)

The survey findings emphasise that UK marketers are becoming more sophisticated in the way they communicate with customers and prospects. The same goes in the reverse. There is clearly a demand from the consumer to be able to access relevant information through the channel of their choice, which means that the more channels an organisation offers their customers, the better response they will get. Nevertheless, the research also shows that ignoring traditional channels will be to the marketer’s detriment, with direct mail driving the greatest share of response to Freephone and email channels.

CDMS