Crunch time for customer communications
As companies throughout the UK continue to tighten their belts amidst economic uncertainty brought on by the credit crunch, Steve Williams, sales director and Andrew Woodger, data services director at Adare, comment on how some businesses are doing more harm than good to their bottom line by cutting costs in the one place they need it the most - targeted customer communications.
"In times of economic insecurity companies naturally look to reduce costs from areas which deliver immediacy of savings, whilst hoping to minimise overall impact to business continuity. More often than not customer communications is therefore a prime target, with companies downsizing the frequency or volume of correspondence going out to existing and potential consumers.
"Whilst cutting these levels of interaction with existing and prospective customers may deliver some initial savings, the true negative impact could be far more severe in reality - costing, rather than saving the business money. There is clear justification that if companies execute planned and targeted direct marketing campaigns, especially during economic uncertainty, this will enhance their acquisition and retention revenues thus easing overall pressures.
"Companies should focus on identifying key prospects and clients who have the propensity to purchase more of their products, then maximising the opportunity for aggressive customer acquisition as opposed to fading into the background.
"Consumer choice has never been greater due to the strong emergence of on-line providers to compete with traditional high street vendors. With this in mind companies need to deliver more expedient, relevant and most critically cost-effective communications to their target audiences if they are to maximise revenues.
"Cross-pollination of budgetary revenues through the convergence of traditionally disparate direct mail and transactional mail activities to form one single communication is one such way of achieving this.
"Commonly recognised as transpromotional messaging this delivers reduced campaign timelines and rationalises production and postage costs - while increasing relevancy of information to the end customer.
"Co-branded promotions are also a cost-effective way of reaching a target audience through shared mailings with complimentary brands. This route offers the benefits of co-funding communications whilst not directly impacting the brand of the contributing partners.
Andrew Woodger, data services director at Adare, comments on the importance of investing in data as a prerequisite to maintaining maximum return on investment across all customer communications:
"Data is a vital part of customer communications and therefore companies looking to save money by cutting investment in this area are similarly damaging their return on investment.
"Businesses should focus communications on key target audiences that will provide the best return on investment. Too few organisations pay attention to the currency and hygiene of their data. In simple terms, every penny spent on maintaining a targeted and up-to-the-minute database, saves a pound on wasted communications going out to disinterested consumers.
"Investing time and money in revisiting, reanalysing and reworking data through post campaign analysis is essential to improving return on investment by helping to forecast the performance of future campaigns.
"In such a competitive marketplace accurate data is necessary to protect the integrity of a brand and improve the accuracy of all communications. From ensuring that the correct message reaches the desired target audience, to avoiding unnecessary waste - accurate data delivers a better return on investment and ensures a more positive customer experience.
Steve concludes: "Suppliers within the direct-mail industry must work to maximise the cost-effectiveness of customer activity to ensure acquisition and retention mailings remain a viable route to market. Through a more intelligent approach to the data, creative and fulfilment processes clients will be assured value for money solutions at a time when every penny counts. In challenging times customer communications should become a priority, not a casualty of the economic climate."
