Marketers aren't investing enough in direct response and customer data
- 28 October, 2013 11:56
Marketers should embrace more direct response activity and invest in better customer data if they’re to create a sustainable business model, one Australian marketing veteran claims.
Marketing consultant, seminar speaker and founder of The Institute of Wow, John Dwyer, has worked with more than 27,000 businesses across 58 different industries and claims his marketing ideas have helped brands generate more than $15 billion in revenue. His list of clients has included KFC, Caltex, 7-Eleven and Westfield.
Dwyer told CMO that marketers continue to make three common mistakes: Marketing on price; not capturing enough or the right data on their customers on and offline; and failing to trigger value-based relationships with their target customers through direct response principles.
Despite the growing focus on analytics and data-driven marketing, Dwyer said industry statistics indicated 90 per cent of businesses today still don’t have data capturing capabilities on their websites. He also criticised the lack of data capturing taking place in bricks-and-mortar operations offline.
“We talk about more data-driven marketing today, but I say ‘where is it?'” he asked. “It’s about the right numbers, not just bringing in big numbers. People are not identifying accurately enough who the most profitable customers are for their organisations, and then finding more people who look like them.”
As an example, Dwyer pointed to Australian amusement park, Movie World, which attracted 1.8 million people through its doors in 2012, but didn’t capture data on them at the point of sale. In addition, the NRL gets 82,000 people to a grand final game, but hasn’t known a thing about them, he said.
“This is offline data collection, but this is also happening online,” Dwyer continued. “On the Movie World website, I’d want to collect information on every child that visits the site. To do this, I’d have a Batman activity theme requiring them to register with a name and address so I can follow up in future.
“I’m not saying there aren’t businesses doing this, but many Australian companies are still not following the basics of having data capturing on their websites and in their stores, and they should.”
Another major problem is that marketers aren’t aware of how vital emotional, direct response strategy is as a way of driving better customer results, Dwyer said.
“The most powerful form of marketing on the planet is emotional direct response marketing, which I call problem/solution marketing,” he claimed. “You give your client a problem, you aggravate that problem and then you provide a solution.”
One example of an industry that does direct response well is the weight loss industry, Dwyer said. Individuals who have actually gone through weight loss programs discuss the problem and process via testimonials, helping to trigger a direct and emotional response from target customers, he said.
“This formula has been around forever… and yet it’s only been the likes of Danoz Direct that have really exploited them,” Dwyer said. “And I put that down to the advertising agencies believing this is below them.”
The other challenge is organisations have relied on brand building as the “be all and end all”, Dwyer claimed, throwing their marketing dollars at banner advertising, sponsoring football teams and so on instead of targeted and emotive campaigns that generate measurable sales.
“Yes, brand building is very important and the most important thing, but brand and selling are not mutually exclusive,” he said. “You can sell stuff through direct response marketing and position your brand at the same time.”
As an example, Dwyer pointed to a former client, the Greater Building Society, which historically focused on branding through TV ads. By changing the value proposition around its customer acquisition model using a direct response approach, the company tripled business within 18 months. The direct response hook was to offer potential customers an upfront free holiday, instead of a lower ‘honeymoon’ home loan rate also offered by its competitors, he said.
“What we successfully did is take the consumer’s eye off the price,” Dwyer said. “We were also building the brand’s persona at the same time. We then had Jerry Seinfeld, one of the biggest celebrities in the world, to do some ads and bring some celebrity power to the brand to help through the GFC. And not once did the company advertise or lower its interest rates during this time.”
To help marketers employ direct response marketing, Dwyer outlined five key steps:
- Research to determine who the target audience is
- Create a ‘wow’ factor and take the consumer’s eye off the price
- Use a problem/solution effect and focus on benefits, not features
- Have a good website and in that, house all the components of your product or solution through video testimonials and also captures data
- Aim to bring in repetitive trade – just think of the ‘coffee loyalty’ cards as an example.