Marketers reach gadget-obsessed

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Sony and Nokia rely on customer data and predictive models to drive marketing
Sony and Nokia rely on customer data and predictive models to drive marketing

Consumer technology companies are refining their direct marketing strategies in the face of unprecedented competition. It includes everything  from optimizing direct mail lists to using social media to reach gadget-crazed consumers before they purchase.

In July, the Consumer Electronics Association estimated shipment revenues in the consumer electronics industry would increase by 3% — to $174.9 billion — in 2010, a healthy boost from a projection earlier in the year of just 0.3%. The association attributed the revised spike to the demand for new consumer technology products, including 3D TVs, smartphones, Blu-ray players, e-readers and mobile computing solutions such as tablets, and the recently released iPad.

“Direct marketing has become extremely important, and one of the primary reasons is because with any consumer electronics product, people exhibit a lot of anonymous shopping behavior before they actually purchase,” says Michele Fitzpatrick, SVP, strategy and insights for The Agency Inside Harte Hanks. “But if you can market directly to known consumers, you'll have the ability to know when they're in the market and, therefore, be able to influence their purchase decision.”

To do that, most manufacturers are mining deep into their existing databases to track everything from customer purchases and product preferences to price points and purchase frequency.

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Sony Electronics, for example, uses a hybrid segmentation scheme based on e-mail engagement and RFM — recency (how long ago someone bought), frequency (how often they buy) and monetary (how much they spend), says Jennifer Geddy, director, CRM and response marketing at Sony Electronics. Sony also adds predictive models to help identify key database prospects for particular product categories.

Like many consumer technology companies, direct mail and free-standing inserts (FSIs) that are added to newspapers or magazines continue to be “a very important part of the direct marketing mix,” says Geddy. An advertising campaign for the summer launch of Sony's 3D-capable Bravia HDTVs, for example, included both direct mail and FSIs, in addition to e-mail and social media communications.

However, with the incredible growth of digital and mobile, Geddy says, “it becomes more important that we evolve our direct mail to be more relevant and timely.” To improve that relevancy, Sony Electronics uses personalization tactics which have shown to improve conversion and retention.

“Last year, we had a great direct mail trigger program based on Bravia television and Blu-ray player purchase that generated seven times the response rate of our regular direct mail program benchmarks,” she says. “It was variable printing, updated every two weeks and personalized with a customer's name and the product they had just purchased. [It proves] relevancy and timeliness really work.”

FSIs, however, have proved challenging because, despite careful market selection, “the households are still unknown to us,” says Geddy. Still, she says econometric modeling has proved FSIs drive sales, and Sony Electronics is now investigating ways to add QR codes and augmented reality to improve recipient engagement.

Other companies use social media to reach consumers in the purchase consideration phase. Kodak monitors and participates in conversations on its blogs and on other websites, says Tom Hoehn, director, interactive marketing and convergence media at Kodak. “We'll never swoop in and say, ‘Hey, you can get 25% off that product you're writing about' — that's the wrong way to do it,” he adds.

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