Direct Marketing: Who Does It Well?

I was recently asked who I think are some of the best direct response marketers today.  This is what I said:

I have chosen four brands that showcase different aspects of excellence in DR marketing: American Express, JetBlue, Target and Starbucks.

Screen Shot 2014-04-30 at 2.17.29 PMAmerican Express:

American Express is a good example of a marketer that uses modeling, and mail/offer testing effectively. It also uses a wide range of channels, from mobile/geolocation to direct mail, email, social and telemarketing, and has even experimented with addressable television.

American Express uses its reserve of transactional and other data to target and space offers and to reach customers through their individually preferred channels. I personally receive and respond to offers via my mobile device through the geolocation application foursquare. These offers are timely, relevant and easy to redeem. Once I have “unlocked” a special offer, American Express applies the discount directly to my statement. This program originated as a way to drive activity for AMEX’s small business customers; however, it is equally valuable for card members. The direct application of the rebate to a card holder’s statement resulted from research that showed that members often feel uncomfortable or inconvenienced by having to show a coupon at a restaurant or other place of business.

American Express offers are tied to segmentation such as the type of card or specific activity. For example, Gold card members receive a Platinum offer every 3-4 months, a customer who shops at Petsmart might receive a $10 offer for a future purchase there, and someone who travels might receive offers related to places he or she has visited or for a traditional AMEX product set such as Sign and Travel.

My understanding is that American Express dedicates 15% of its budget to testing. This reflects the brand’s commitment to continuous learning, using controls and checks, trying new things, tweaking, and defining and tracking measures of success.

Screen Shot 2014-04-30 at 2.09.49 PMJetBlue:

JetBlue uses DR marketing more for relationship building than acquisition. They manage the relationship with their patrons in a structured and fun way that clearly reflects the brand’s personality.

JetBlue is a good example of brand that demonstrates its relevance to the customer, expresses itself in its own voice, and delivers timely and appropriate messages. In addition, the brand and the message stand out and add value to the relationship for both parties.

The JetBlue birthday email depicted here is simple, unexpected, quick and to the point. It recognizes the fact that people are likely to fly around the time of their birthday and offers a potential bonus for flying with JetBlue.

Screen Shot 2014-04-30 at 2.23.04 PMJetBlue uses social channels such as twitter for both promotion and customer service. In this twitter exchange, you can see the airline’s promotional offer: “Spread yur wings & try an exciting new destination w/ flgts from $59.” The message is short and enticing with an effective call to action and means to take action by clicking on the link. Note that the reach of this offer has been amplified by being retweeted. In addition, this exchange demonstrates how JetBlue’s social customer care presence is consistent with its brand personality. The response from the JetBlue representative to M Schackne is energetic, playful, timely and personal – showing a consistency across channels.

19cover2-sfSpan-v3Target:

Target used sophisticated statistical modeling to identify mothers-to-be by mapping buying behaviors of loyalty card members to those who had signed up for baby registries – thus giving Target access to a highly profitable customer segment.

Because birth records are usually public, new parents are immediately inundated by all kinds of offers and advertisements, so the Holy Grail is to reach these parents before their child is born. Target was able to pinpoint customers who were pregnant and even estimate their due date. This allowed them to send extremely targeted offers to drive in-store traffic. Some say that this strategy of reaching new families and making them loyal Target customers was key to Target’s revenue growth of $44 billion in 2002 to $67 billion in 2010.

Target’s strategy became public due to a New York Times article that featured a story in which Target knew that a teenager was pregnant before she had told her family. This story highlights the fine line between relevant and “creepy” that direct marketers must navigate in this age of big data and personalization. DR marketing is permission based, and we must be careful not to impose upon customers’ good will and sense of comfort.

Screen Shot 2014-04-30 at 2.20.41 PMStarbucks

Starbucks uses digital, particularly mobile, channels to integrate itself into the day-to-day lives of its customers, from “home to store to home.”

Through its mobile application, Starbucks sends offers that range from value added items such as free music and applications to specific offers to try new products for free or at a discount.

Starbucks also uses this channel to provide loyalty rewards, which include free products. Other offers encourage and enable customers to serve as advocates by, for example, tweeting promotional offers to friends.

 


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