The real revolution in direct marketing is not digital
Direct marketing has rightly been called the discipline that dare not speak its name. Even, it seems, among its own practitioners.
At a recent gathering of colleagues, I had the temerity to say this, only to be shot down by friends who have been doing direct marketing all their careers and, in my humble opinion, still are.
It’s a quaint term, redolent of the days when bank statements came through the post, consumers clipped coupons with lovingly art-directed dotted lines, and enough people actually read the stuff that fell out of magazines to make the printing and media costs worthwhile.
Too often, direct marketing is confused with direct mail, even after having been recast as ‘customer relationship management’: a makeover driven largely, I suspect, to serve the agenda of the marketing software industry.
However, the definition I prefer comes from the US Direct Marketing Association, which calls direct marketing “a system of marketing which seeks to grow customer value by driving profitable individual interactions via any point of contact, and records the results on a database to enable continuous improvement”.
A colleague once expressed it more succinctly: “Direct marketing isn’t a set of channels, or even a discipline. It’s an attitude.”
It involves adopting a view of the world that is focused on individual customers and transactions rather than broad, aggregated abstractions. It is continuous, not spasmodic. And it tends to define value in terms of customer lifetimes rather than product life cycles.
Or, as a banking executive of my acquaintance recently arrived in the heaven of marketing from the hell of risk, put it: “Advertising is worrying a lot about one big thing. Direct marketing is worrying a lot about hundreds of little things.”
Despite the odd burning bush moment such as this, direct marketing is increasingly dismissed as a redundant term because, and I quote, “We’re all direct marketers now”.
The orthodox narrative is that the digital revolution has broken down the walls between businesses and their customers, empowering the latter while enabling the former to speak to everyone as an individual.
It’s debatable whether this has actually happened in more than a few exceptional cases. And it’s even more debatable whether the result has been to create a true ‘system of marketing’ as in the quoted definition above.
Let’s examine one facet of this issue. Modern marketers and their agencies love the word ‘engagement’, by which they mean stimulating consumers to interact with their brand – to like it socially or to consume associated content – with a view to drive positive brand preference.
All well and good, despite the fact that a good advertising idea has been shown time and again to create brand preference at a much lower cost-per-impression.
My real beef is with those who claim that ‘engagement’ has supplanted direct marketing.
Yes, starting a conversation using attractive content is an age-old direct marketing technique. But in the modish engagement model, what happens next? Only rarely is an attempt made to cultivate an ‘engaged’ consumer into a valuable long-term customer.
Far from being a thing of the past, I believe that the real direct marketing revolution is yet to happen. And it may occur in the finance department, not the marketing department.
The biggest obstacle to the adoption of the direct idea has been the way in which value has been measured by businesses. For good historical reasons, value has been attached to product lines.
However, the direct idea means attaching value to customers as well. In service businesses especially, having a view of the current and potential value of customers and prospects is a transformational way to manage investment. And the only true way to deliver on the ‘customer centricity’ rhetoric beloved of turn-around CEOs.
As digitisation improves management information within organisations, it’s possible that customer value will be rendered increasingly visible to the C-suite. And who knows? Direct marketing may at last become an idea whose time has come.
Richard Madden is chief strategy officer at Kitcatt Nohr Digitas