Marketing predictions for 2009

As you may remember from last year, in January I try to review what has happened in the last 12 months and predict what might happen in the next 12 months. I have begun with my first five predictions and you can watch out for a further five in next week's MIG newsletter.

1. Businesses will spend more time and money on customer retention, securing future business from existing customers and ideally ‘locking-in’ customers in some way. Proactive ‘loyalty’ marketing will feature strongly.

With the advent of what is now generally regarded as a full recession, customer retention will become even more important than ever before. Businesses must, however, know who their customers are and be able to contact or stimulate them in some way to secure future business. If they don’t they will have to rely on the good will of their customers and this will require them to deliver exceptional customer service or provide a unique product or service to ensure customers keep coming back. The latter part of 2008 saw a resurgence of interest in ‘Customer Farming®’ for example and a greater use of ‘intelligence’ in delivering effective communications to stimulate and build the value of their customers for the future. Almost by definition, businesses will need to communicate effectively with customers to ensure they can stimulate demand from existing customers. That process needs to be interactive and we are working on loyalty projects now that look at the levels of interest not just via opening of email or click thru’s but via the speed of opening.

Rewarding positive behaviour, a key component of Customer Farming®, is likely to be the biggest issue.

Text emails also add an extra dimension as people receive emails on the move (see later predictions); but whatever the medium of communication that is used, it is likely that email and sms will be the most cost effective means to successfully deliver the results that will be needed this year.

2. 2009 will see a further migration to digital marketing from traditional print, DM and media spend. ‘Intelligent’ delivery of email / SMS will be key.

Marketing budgets are tighter and must deliver greater ROI and as a result the migration from ‘off-line’ traditional direct mail to on-line or digital marketing will be accelerated and savings will be made! During 2008 there was a significant increase in the successful use of email and SMS to stimulate purchase and increasingly this is replacing direct mail which itself is becoming more expensive. The recognition by the majority that digital marketing can significantly augment a traditional marketing campaign has sadly come too late for a number of retailers. We have been heavily involved in reducing marketing costs to help businesses become more profitable and with administrators attempting to rescue others.

iBrochures are interesting for example. We know they do not replace a full printed catalogue nor do they replace a fully functioning e-commerce website. What they do offer are 3 tactical strengths:

a. The ability to quickly and cost effectively deliver or test a tactical communication or product collection that is otherwise functionally represented or categorised and subsequently dispersed within a website. Increasingly as we have seen recently with Iceland for Christmas or Debenhams for weddings, they are designed to drive store footfall and are not solely designed for e-commerce.

b. The ability to be more informed about customer preferences and interests. Browsing interest is captured and can be quickly reported on, giving the ability to carry out A/B split tests on layouts or product collections whereas in traditional print the only measure.

c. The latest and perhaps most interesting and potentially valuable use of an iBrochure in the current climate is to provide telesales agents with an exact replica of a printed catalogue but that also has embedded data within the pages or as ‘pop-ups’. The added information helps the sales agent or adviser to properly sell the product, overcome objections and / or link to other products to order build. The dynamic nature of the iBrochure allows this training script to be amended and updated to cope with changing market conditions.

Clearly there are many aspects to digital marketing and getting things to work is more of a science than an art with a huge amount that has been learned in recent years. We are finding the more considered, timely and informed your approach, the better the results and businesses who just ‘pump out’ volume don’t get the full benefits of the medium.

Without doubt 2009 is going to see many more failures particularly amongst businesses that are afraid of change or who don’t fundamentally recognise the market is and has been changing. What used to work won’t anymore; it is no longer a climate where a marketing role is judged by the budget available to spend. The problem is that strategically changing an operation to capture and use data and the digital medium is usually a longer term ROI and whilst there are short term savings for many there is also an initial investment for some.

3. 2009 will see a resurgence in the use of ‘Text’ emails and greater use of SMS

When we first started to broadcast email back in 2001, we were acutely aware of the importance of the ‘multi-part’ format and the need because of bandwidth restrictions to deliver some emails by text instead of HTML. Latterly the fashion seems to have become to deliver only HTML or a version of email that contains key ‘calls to action’ within the image of that HTML. At the same time we are seeing huge growth in Blackberry or other mobile devices and with the default settings of Outlook now automatically blocking images, the penetration levels of image based emails will diminish. I now have clients who not only want the information in one or two lines but who now are asking to effectively deliver the message in the subject line so they can respond or dismiss without even opening. It is likely this trend will continue during 2009. It is important email designers include actual text not just ‘image’ text within their emails or they won’t get read at all.

Perhaps even more interesting, most email systems fail to register text email readers as it is the HTML version that logs the request for content and the text version doesn’t so it appears not to have been opened at all. This is a dilemma for many ecommerce managers as they just see declining open rates but without metrics think that they need to invest more in design and subject line.

The upside of this trend to mobile devices however is that the sending of SMS promotional material is in fact less intrusive than it was because people using mobile devices are less concerned or even differentiate between texts and emails regarding both as a similar means of communication. This does mean that where an email may fail (no text just images) the sms is successful as it does deliver the message. In 2008 we had success combining text and email using our Textfor… solution, and also where an email address isn’t present but a mobile number is. One of our clients saw an increase in spend of over 40% from customers receiving texts compared to customers not being contacted at all and a 30% improvement over people receiving email alone.

Bearing in mind this added power any business reviewing its email system needs to also consider how emails are delivered to mobile devices and also how easily they can integrate with sms delivery, ideally they should have an integrated and combined platform like our e-MSG!

4. 2009 will see a greater emphasis on data capture from advertising. Switching spend away from PPC to natural search and interactive campaigns using mobile phones to capture data.

It has been interesting to watch the further decline of the main media advertising spend in 2008 and bizarre situations that have occurred. For example a TV advertising campaign ran for MFI some weeks after the business had gone into administration and actually after most of the stores had closed. It was clearly not being paid for as a result and there was a distinct lack of businesses prepared to take the space or be allowed to. The fact is still that most advertising remains wasted and without an effective means of measurement it is increasingly difficult to justify the spend. Direct marketers have for years been very metric centred and virtually all on-line spend can be equally scrutinised. During the past few years we have seen significant growth in on-line expenditure, particularly in Pay Per Click (PPC) which as predicted last year has started like traditional media to lose its shine. The main problem for marketers like media advertising is how much incremental business does this actually deliver? It seems to us that money spent on securing strong natural search augmented with strong data capture and subsequent responsive emailing is a much stronger long term and sustainable proposition. I am from the school that promotes and was brought up on marketing being an academic discipline where marketing people are employed to think these things through. Many businesses seem not to do that and believe what they are told by the media agencies whose very existence relies on spend that appears to deliver incredible return. In 2008 we persuaded one client to stop their PPC spend and focus on getting their website in the top 3 in natural search, during the 3 month test period they saved £11k per month and on-line spending remained at exactly the same level as the previous 3 months. Their PPC contract and budget for 2009 is now £0!

We are also great advocates of targeted advertising but also as long as that advertising provides a data capture opportunity. It may be that large volumes of people do not respond by text to ads and there isn’t a huge amount of data captured but it will at least provide a response mechanism to enable some comparative measurement between media and some long term value in the data itself. 2009 sees the launch of NFC in most phones (near field communication). It will be possible to simply point your phone at a shop window or interactive advert and have the information sent to your phone by SMS or email. The Textfor… solution already does this very effectively capturing data and permissions via a response to a short code but what we also started to see at the end of 2008 was a recognition that it is better to spend on something that will add data as well as promote the brand.

5. Email and mobile data will be the ‘Holy Grail’ for retention and recruitment in 2009

Call centres with outbound telemarketing have surprised us in 2008 as we expected that the TPS file would have choked the potential for marketing over the phone and that the economics of direct mail would have reduced the potential ROI via that medium. Email has not yet really been used successfully for recruitment largely because the permission based databases have proved to be largely ineffective. What is likely to change next year is the realisation that good data has a high value and that with the emergence of permission based email ‘data pools’ and the availability of ‘permission passed’ email appending this may be a more responsive solution for the future. We are already seeing marketing departments setting aside budgets to add email to their data, using SMS to request response texts containing emails and tele-surveying their customer data to capture email addresses and permissions.

Our email database is growing significantly and with geo-demographic overlays and the fact that it often has transaction profiles appended and not captured via competition sites, email data is likely to become a powerful resource for the coming year.