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Why are retailers still sending so much junk mail?

September 23, 2009

Advertising Age’s Sept 22 2009, article, “Direct Disconnect: Retailers Neglect Valuable Data Trove” asks why retailers are still sending so much junk mail.

Experience shows that relevant messaging offers five to 10 times the response rate and a 20% to 30% increases in sales.  Even with that research, there are few retailers focusing on sending  targeted, relevant messaging.

Dawn Maire, Chief Retail Officer with Rapp, says “retailers are hooked on what she calls, “the heroin” of mass communication,  noting that retailers are afraid to cut back on the volume of messages,  figuring that the shotgun method has worked in the past — even though a more targeted approach could work even better. “Retailers have powerful data at their fingertips and they aren’t using its full potential.”

The disconnect is the retailers failure to use their customer data!  Consumers leave behind valuable data every time they engage – the data is transactional, behavioral, demographic and attitudinal – all available to easily personalize communications.   2009 CMO Council research indicates that companies acknowledge that they have lots of data but they don’t use it for many reasons, including disparate databases running on varying technology platforms, a murky understanding of who owns the data and should be using it and, in some cases, an unwillingness to tackle what is thought to be an expensive and time-consuming project.

At least the current recession is providing some relief to consumers tired of all those catalogs.   Cost cutting is forcing marketers to reduce direct mail, but it is only being replaced by email.

Marketers spent $21.3 billion on catalogs and another $35.2 billion on direct mail last year. According to Forrester, 20% of marketers acknowledge they send too much direct mail, while 34% believe they’re stuffing inboxes with too much e-mail.

Bottom line – marketers have to stop focusing on traffic and focus on increasing revenues – leveraging customer data allows personalized messaging and better return!

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6 Comments leave one →
  1. September 23, 2009 4:15 PM

    Thanks for posting the article, was certainly a great read!

  2. September 24, 2009 5:17 PM

    I never understand why I get kids catalogs, as I’ve never had any, and have never bought anything from any of them. It’s a little insulting that companies that I do do business with can’t figure it out, and such a waste. The best thing I ever did was to get sign up to get off (almost) all the lists. Before that we’d get 6-10 a day & everything from farm supplies (I live in NYC) to hunting gear.

  3. September 29, 2009 10:34 AM

    Society is slowly coming to realize that the “brute force” approach to everything needs to stop. If companies were responsible to pay for their marketing “externalities” – (http://www.youtube.com/watch?v=aCGTD5Bn1m0), then they would be more selective of what/when/how much marketing they would send.

    We all agree the data is there to make things better, and we also know that VueLogic has the tools to have organizations drop their “brute force approach” towards marketing.

    Wouldn’t it be great if VueLogic could publish on their home page, how much CO2 they were able to remove from the atmosphere, by allowing companies to advertise better?

    Just an idea.

    We all need a Trojan horse once in a while 😉

  4. September 29, 2009 11:17 AM

    Great article! I have to agree with Anne – except that we receive catalogs for baby and cigarette stuff. Hello – no babies here and we have never/will never smoke.

    Signing up to get off the catalog lists was great. However, now someone seems to think that we are the demographic who has time to complete research forms and wants to earn money from home. Are you kidding me? Who did their research?

  5. September 29, 2009 12:28 PM

    Apparently they keep to their old tactics because they are profitable. However, I do believe that if they used a “silver bullet” they would lower their costs and reduce their expenses. Dan Kennedy has been teaching this for years.

    • Patricia permalink
      November 3, 2009 11:47 AM

      Thanks, Neal – It is human nature to keep doing what you know how to do. Leveraging customer data in a new way will require a new way of thinking.

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