Data-driven, digital, and direct. These are just a few of the terms that marketers use interchangeably when discussing ways to create relevant customer interactions. Perhaps the reason marketers swap these terms so freely is that data is inextricably linked with digital and direct. Think about it: It used to be that direct marketing was the primary marketing discipline driven by data. Today, all marketing is data-driven. Even brand marketers use customer data to inform their campaigns. And although digital is just one of the many vehicles that marketers can use for direct marketing, few companies run campaigns today that don’t include data-driven digital elements.
So, then, the bold statement: All marketing is direct.
Some will argue that there’s truth to that assertion. Others say that if one considers the traditional definition of direct marketing, there are still distinctions that separate direct marketing from data-driven marketing and from digital marketing—and, of course, from branding.
Here’s a rundown of what direct marketing means today, why some brands consider all of their marketing direct while others’ blend of data and digital aren’t, and what the future holds for the stalwart marketing discipline.
What is direct marketing?
Marketing today generally falls into two broad categories: direct and branding. Direct is when marketers send communications to specific individuals that contain distinct calls-to-action, says Mathieu Hannouz, evangelist for cross-channel campaign management, Adobe Campaign, at digital marketing provider Adobe. An increase in sales is the ultimate key performance indicator (KPI) for most direct marketers; however, intermediate KPIs such as Web traffic can show progress leading up to this objective, Hannouz says. Branding, on the other hand, is the selling of an idea or lifestyle to feed top-of-funnel awareness or mindshare, he says. But unlike direct, branding messages rarely contain calls-to-action and they’re not always addressed to specific audiences—even though brand marketers may use data to guide such decisions as media choices. Branding often serves to set the expectations that can be a foundation for building customer relationships through direct.
Not surprisingly, considering the link to sales, direct is more widely used. According to market research company eMarketer, U.S. advertisers will spend $50.11 billion on digital advertising in 2014. About 59% of this budget ($29.61 billion) will be dedicated to direct response, while nearly 41% ($20.50 billion) will be allocated to branding.
Marketers’ heavy reliance on direct is twofold. First, they need to prove that their investments are effective at driving revenue and decreasing churn, Hannouz says. Second, marketers use direct to expand relationships with existing, loyal customers who drive the most revenue, says Drew Panayiotou, president and CEO of advertising agency BBDO Atlanta. “If most of the value of any business is within 10 to 20% of the customer base, then I should be spending a lot of money in direct response channels,” Panayiotou says.
All direct all the time
Legrand’s Ronda Vye considers all of the company’s marketing direct, even its content marketing. “Our end [goal] is to get people to elicit a response in some way,” says Vye, director of marketing for the provider of electrical products and systems’ North American division. That response may simply be to move further along their customer journey.
Legrand is a company built on acquisitions, Vye explains. Its history of purchasing small and midsize companies has allowed the organization to provide solutions that deliver and control power, light, and technology for residential, commercial, and industrial buildings. This wide array of offerings has resulted in a long list of target customers, ranging from distributors and installers to specifiers and end consumers, she says. Therefore, Legrand must balance creating a sense of connectedness among its brands with making it easy for each audience to find the information they need in a way most easily consumable to them. The solution for the U.S. arm of the company was to consolidate its brands under one legrand.us site, while still addressing each customer type’s individual needs at each stage of their buying cycle through clear, simple navigation and, most important to its direct efforts, relevant content.
The goal of Legrand’s content, however, isn’t so much to drive immediate sales as it is to move customers through the funnel toward a sale by addressing problems customers have at certain phases in their buyer’s journey. To create a distinct image of its disparate customers, Legrand relies on personas. Each of Legrand’s target audiences has its own persona. These personas are defined by research (e.g., focus groups) and information gathered through online customer registration forms, including customer type (e.g., homeowner, architect, designer). Legrand also verifies these personas through customer behaviors, such as which emails they open, what content they read, and how much time they spend on particular pages. For instance, one of the brand’s customer personas for adorne—a collection of residential lighting and wireless system products—is a mid-30s female who looks to social media and blogs for home décor inspiration, Vye says. All of this data goes into the company’s CRM system.
In terms of identifying where customers are in their buyer’s journey so the company can more effectively move them along, Legrand uses journey mapping. There are four phases of Legrand’s customer journey: awareness, consideration, conversion, and post-purchase. The company provides content that aims to address problems customers may face in each of these stages to help them progress from one phase to the other. For example, it provides customers in the awareness phase multiple sources of inspiration, including photo and video galleries, blogger content, and downloadable lookbooks. Legrand may invite post-purchase customers to view installation how-to videos. The company features calls-to-action—e.g., play video, start planning, find a store, sign up for emails—throughout its site. Legrand can track what content customers click on to see where they are in their journeys. “Our goal is to provide [content] in the right channel with the right approach to the customer,” Vye says.
Direct marketing is integral to moving Legrand’s customers along their buyer’s journey. The company began piloting marketing automation technology this past July to enhance its ability to deliver the right content to the right customers at the right time. Legrand is currently using the new tool to pilot a drip campaign for residential customers interested in adorne. The campaign is a series of about 15 emails sent based on customers’ behaviors and lifecycle stages. For example, the company may send customers in the awareness phase content based on design inspiration and trends, and send returning customers tips and tricks on how to install their purchased products or information on related products, Vye says.
Because Legrand was still in the process of launching its pilot at the time of the interview, Vye didn’t have any results to share. However, she says that marketing automation has already helped the company speak to customers in a more relevant way and come off as less intrusive. “If I’m in the awareness phase of my buying cycle, I don’t want to talk to a salesperson. That’s going to turn me off,” Vye says. “This process really allows us to say, ‘Let customers warm up. Let customers get the information they need,’ and then be very deliberate in our conversation with them.”
Is direct marketing growing beyond its traditional definition?
Although the amount of data and number of channels available to direct marketers has grown significantly over the years, the definition of direct itself has remained relatively stagnant. But is it possible for marketers to outgrow this textbook term? Some argue yes.
For instance, Taco Bell’s Lynn Hemans views direct as a one-way conversation in which businesses speak to consumers without any reciprocal engagement. However, marketing has evolved into a much more complex discipline, she says, and has evolved into a conversation with consumers.
“You can have a two-way dialogue [and] you can engage your consumer,” says Hemans, director of industry and competitive insights for the Mexican-style, quick-service restaurant chain. “It’s definitely grown beyond direct marketing.”
Taco Bell proved that rethinking what direct means and engaging in two-way conversations with consumers can produce savory results when it took a fresh, direct approach to launching its Doritos Locos Tacos (DLT) line in March 2012.
Before launching DLTs—menu items that replaced traditional Taco Bell hard shells with shells made from Frito-Lay Doritos—Taco Bell relied mainly on mass awareness campaigns to promote its products. The quick-serve chain would post promotional materials in-store, run TV and radio spots, and generate buzz through PR, Hemans says. But after a 2011 public lawsuit about the quality of the brand’s beef, which was later withdrawn, caused sales to plummet, Taco Bell needed a new way to drive customers in-store.
As a result, Taco Bell decided to change up its marketing recipe and add a new key ingredient: customer feedback. Before broadly releasing its first DLT—Nacho Cheese—to the public, Taco Bell looked at how its cheesy creation performed in test markets in Bakersfield and Fresno, CA, as well as in Toledo, OH. During this one-year trial period, Taco Bell used social listening and natural language processing tools to track consumers’ online reactions to the new menu item.
In the process, Hemans discovered that not all of the consumer sentiment was positive; consumers outside of its test markets had caught wind of the new menu item and were frustrated that they couldn’t purchase DLTs at their local restaurants. Hemans and her team took this insight to the marketing team and agency and used the social conversations to fuel the marketing campaign for DLT’s national debut, Hemans says. For instance, the quick-serve chain included Facebook and Twitter comments in its TV ad and on the brand’s taco wrappers and cups. The restaurant chain also invited online influencers to taste the Nacho Cheese DLT ahead of time. The two-way dialogue approach to marketing worked so well that Taco Bell sold 100 million DLTs within the first 10 weeks of the product launch.
After introducing the Nacho Cheese DLT, Taco Bell continued to receive flavor suggestions via its online and social channels. This feedback resulted in Taco Bell launching a second flavor, Cool Ranch, one year later. To drive sales of the new menu item, Taco Bell posted a call-to-action on its social networks the day before the DLT’s debut, informing customers that they could get the Cool Ranch DLT a day early if they went to the restaurant and asked for it. Again, the broader, social approach to direct marketing worked. “We sold a lot of Cool Ranch [tacos] that day,” says Hemans, who adds that as of mid-September Taco Bell has sold more than 825 million DLTs in total. “Consumers are realizing that they can engage brands and that brands will engage back with them. The more that brands do it, [the more] the value proposition of that brand or company will go up.”
What’s next for direct marketing?
So what does the future of direct marketing look like? BBDO Atlanta’s Panayiotou expects direct and branding to eventually become, well, just marketing.
“It will mean that all marketing is direct response marketing,” he says. “Sometimes that’s to build a brand and sometimes it’s to drive a transaction. But we’re not going to say that all direct response marketing is about driving a transaction, which is where people are today.”
Indeed, one can assert that becoming engaged as a result of brand marketing is an active response that can lead prospects deeper into the purchase funnel and customers to recommend, repurchase, and expand their relationship.
Panayiotou hopes that this balance of branding and direct will inspire more creativity in direct response channels and garner the kind of engagement and interest that’s often associated with branding today.
“People like watching ads, for the most part,” he says. “If you actually made emails interesting and engaging to look at, people might say, ‘Hey, I like getting email.’ But you don’t see that today, do you? That day is coming soon. [Marketers] will figure this out [and] will understand this…. You’ll see magic happen, and that’s a good thing.”