Lead Generation via Direct Marketing: The Missing Link

13 Mar Lead Generation via Direct Marketing: The Missing Link

Common mistakes companies make

Direct marketing using email and SMS as the distribution channel is not only becoming incrementally more expensive, but also highly competitive – especially in the financial services space with products like loans and insurance.

As more direct marketers enter the market, and as banks and insurers get better at marketing to their own data, the response rates of consumers in terms of email and SMS marketing are declining, with the knock on effect being increased overall marketing costs. If you combine this with all the clutter in through-the-line marketing, it’s clear that it’s becoming increasingly difficult to get your prospective consumer’s attention.

So what is the best way to do this? It’s all about managing your data effectively, so that you can ensure marketing still remains a profit centre for your company. As your marketing profit is directly driven out of the data assets you control, it’s vital to protect this asset by targeting the right customer for the right product, with the perfect message at the perfect time.

Making a loss or profit on your marketing

These are some of the fundamental principles for direct marketing, and that are the difference between marketing making a loss or making a profit.

Here are two simple examples:

1. If you’re sending out 1 million SMSes a month at a cost of 20c each, your marketing cost will be R200 000. At a 0.5% response rate you will generate 5000 sales leads at R40 per lead. By taking some time to pre-score your marketing list to target the exact consumer profile, you can possibly decrease your original send amount to 500 000 for the same response rate. This is a bottom line saving of R100 000, with your sales leads costing you only R20 each!
2. For the same 1 million SMSes, the correct more targeted message sent out at the right time can increase the response rate by a possible 0.5% to 0.8%, or even above that. This equates to 8000 sales leads, only costing R25 per lead.

Key tips to maximising your data

Here are some top tips to maximising your data asset, protecting it and preventing the list from becoming fatigued:

1. Know your target marketing costs e. if you can only afford to spend R50 per sales lead, then spending R51 is loss making and R49 is profit making. This makes it that much easier to motivate for more marketing budget.
2. Build marketing scorecards before you spend. Much like banks only want to market loans and home loans to those consumers that will be approved based on the credit score – so to, do you want to be choosy about who your customers are. It seems like a waste to spend upfront marketing on consumers that cannot actually afford the repayments. So, if you’re planning on marketing a funeral plan, why target high LSMs that would generally buy life insurance instead of a funeral plan?
3. Craft your marketing messages to talk to the consumers you’re targeting. SMS marketing only allows for 160 characters to get your message across and to drive the consumer to respond. On email, you need to make sure your subject lines are catchy and that your call to actions are above the fold, clear and easy to find.
4. Test multiple SMS and email messages at the same time. Response rates vary dramatically, depending on if you use your brand effectively, whether you highlight the right benefits and if you use personalisation.
5. Read your reports to see what times consumers are responding. If they tend to only respond on Tuesdays at 9am, focus on sending out at those days and times.
6. Make sure your sales process is slick. If a consumer responds to your marketing, you should be calling them within five minutes. With all the marketing out there, the odds are that consumers will be shopping around and a competing brand is also going to be calling them. You need to get to them first.
7. Get the right marketing automation software for your team, so they are easily able to measure responses, financials, opt-outs, split-messaging and lead volumes – in real time.

Many companies don’t take the time to ensure that they roll out these tips to their marketing teams, meaning they miss out on all the sales lead gen could be bringing them, and the cost savings that are easily within their reach.

A combination of real data management and a very slick sales process will not only keep your acquisition costs down, but extend the lifetime of your data – an increasingly valuable asset in today’s media-savvy world.

Article as appeared on RedZone.co.za on 26 July 2017.