Data Marketing

A case study in direct marketing

Introduction

A Company selling high value items from the high street decided to trade using direct marketing. After 12 months they were having problems: they couldn't get a return on their investment, there was not enough profit in the sales they made.

They were wondering if they had made the wrong decision in attempting to sell high priced merchandise through direct marketing. They advertised nationally in the quality daily newspapers, using mono space, offering two free catalogues. The responders were sent a catalogue and order forms. The average selling price of each order was circa £150.

We were asked to develop a marketing strategy that would deliver higher volume sales that were profitable.

Market Segments

All advertising was done in national press and details of responders and buyers were held on a database. Using the postcodes from the addresses we compared the profile of the client's database against that of the national average using geo-demographic techniques. This led to the discovery that the majority of their customers were from the AB socio-economic group. This confirmed what had previously been assumed as the selling price was so high, and reflected the media that had been used in the past.

However, what the analysis also highlighted was that the majority of the sales were coming from the Southeast of the country. Yet they were conducting a national advertising campaign.

This was our first clue. The company was wasting nearly 80% of its advertising spend by targeting the whole of the UK.

We then found the appropriate media to deliver the message in the right area, reducing the marketing spend.

Catalogues & Advertising

The catalogues were put together to save money, with little thought. The products were merely described, and there was no reason given to purchase the items. The photography did not do the product justice - there were products with prices over £1,000. We improved the photography and wrote copy that gave the customer a reason to spend.

Database

The client had a database which was not used. They assumed once you sold an item to a customer then they would not want another. Therefore they did not mail out other offers to the customer base.

We showed, with a limited test, that this was the most profitable area of sales.

We also cleaned the database, getting rid of any deceased and gone-aways, saving on mailing costs.

The Results

There was a dramatic increase in response, the average order value increased to over £300 and the database grew to 250,000 in three months, giving the opportunity to sell additional products at a later date. The follow up programme contributed to the profitability, as it squeezed the last ounce out of the name and address.

The Company was now in a position to expand further.

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