Branding: The New Direct Marketing Metric
Direct marketing practitioners have always prided themselves on being able to quantify the behavioral impact of their marketing efforts. We’ve been mining data, uncovering actionable insights, revising marketing strategies, all in an effort to continuously optimize the results (and of course we wouldn’t be good direct marketers if we didn’t ensure that this was being performed in a statistically-significant and robust manner). The accountability principle and approach has remained unaltered since Lester Wunderman invented the direct marketing discipline some 50 years ago.
What has changed is the speed at which all this occurs. Technological advances have helped to make the evaluation process more seamless, (and today, marketing technology is a billion-dollar industry in its own right). Marketing databases are overflowing with information; they can hold millions of records and thousands of data-points (often referred to as variables by us analysts!) on customers and prospects alike. Analytical tools and customized reporting dashboards offer the ability to measure campaigns (in real-time if necessary), delivering the findings straight to the marketing managers’ desk-top for action. The technological advancements have resulted in us being able to get to, and react to the information much faster than was ever possible before.
Measurement within the direct marketing environment has traditionally focused on the evaluation of a specific relationship marketing (RM) program or particular campaign or tactic; click-through, response, conversion, retention, cross-sell and up-sell rates, cost-per-lead (CPL), lifetime value (LTV) and ultimately return-on-investment (ROI) are some of the common key performance indicators (KPI’s), upon which marketing decisions are based and made. The aforementioned list of KPI’s are standard success metrics across industry-sectors.
A significant KPI is however often overlooked— branding. How is a brand influenced and impacted by direct marketing efforts? Branding has traditionally been viewed as something that our first-cousins (the general advertisers, public relations, event marketers) own and control. And most clients meet their objectives by deploying media-agnostic strategies and solutions. But direct marketing influences a consumer, and this in turn affects their perception of the brand. This is no different to the role played by advertising, public relations or ‘feet-on-the-street’ efforts.
Sophisticated longitudinal studies have long been used by market research agencies to track measure brand awareness, consideration and preference. Measuring the impact that direct marketing has no different. The following example illustrates how a brand was influenced and impacted by strategically revising an existing RM program.
A client arrived at the agency with a long established RM program. The program was very soft-sell in nature; its primary objective was to establish brand imagery, and its secondary objective to impact cross-sell. This soft-sell approach was resulting in sub-optimal cross-sell impact (which had now become the firm’s primary objective). The goal: To develop and implement a RM strategy that would optimize revenue (without negatively impacting brand image ratings).
The cross-functional team went to work. Data mining and segmentation revealed a member base that was heavily skewed towards one particular demographic trait—market research further revealed that the existing RM program had attracted a large cohort of brand loyalists, limiting the ability to impact cross-sell. These insights resulted in the agency making significant changes to the targeting and creative strategies; strategies that would ultimately attract prospects that had the potential to have their cross-sell behavior influenced.
The revised acquisition strategy was evaluated using two yard-sticks; database analysis revealed a triple-digit cross-sell rate lift (needless to say this was statistically-significant when compared to the good old control cell). Secondarily and equally important was brand imagery assessment (measured via an on-going tracking study)—a statistically-significant double-digit lift was exhibited by the revised target. Revenue and branding objectives were exceeded. The key takeaway: Remember to include branding when you measure the impact of your relationship marketing efforts.
Jatinder Singh is SVP Group Director, Wunderman New York.
