Direct Mail in the Digital Age. Lin Grensing-Pophal
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retail outlets. They don’t sit around to wait for a brochure to show up in their mailbox.
• How does your price compare with competitors? Pricing is a major consideration, as it forms the basis for your offer. Know who your competitors are — both your direct mail competitors and alternative sources of supply. If a consumer can conveniently buy a very similar item locally at a good price, your direct mail offer may not have much appeal. You’ll need to structure an offer that points out the benefits of your pricing, fast delivery, etc., to woo them from more traditional sources of supply.
2. Segmenting, Targeting, and Positioning
Once you have a good general idea of the consumers you wish to reach, it’s a good idea to get more specific. Segmenting, targeting, and positioning are three key terms in marketing that apply to direct mail marketing efforts.
2.1 Segmentation
Segmenting involves breaking the consumer universe down into manageable market segments. The goal is to reach the most highly responsive consumers at the least cost. There are an infinite number of segments that an organization might choose for its marketing efforts, and various ways in which segmentation may be approached.
Demographic segmentation, for example, breaks the market down in terms of various demographic characteristics such as age, gender, race, marital status, income, education, and occupation.
Psychographic segmentation, by contrast, breaks the market down in terms of activities, interests, and opinions (AIO). An example of psychographic segmentation would be a sports retailer appealing to individuals who enjoy rock climbing.
For market segmentation to be effective, Charles D. Schewe and Alexander Hiam, authors of The Portable MBA in Marketing, suggest certain criteria must be met. They include:
• The market must be identifiable and measurable. Segmentation needs to be based on some shared characteristic (e.g., enjoying country music or being a teenager).
• The segment must be large enough to be profitable.
• The market must be reachable. Marketers can reach females between the ages of 25 to 40 without much trouble, but attempting to reach 15-year-old redheaded boys or mothers of lactose intolerant children who enjoy cooking will be more challenging.
• The segment must be responsive. Young women in their early twenties might be a promising segment for a high-end hair product, but not if they’re in college and struggling to pay rent and tuition.
• The segment must not be expected to change quickly.
Segmentation may also be based on internal information. Usage patterns may suggest certain segments of customers who are more responsive (e.g., heavy users of a particular product). There are infinite possibilities involved in identifying market segments, as segments may be comprised of psychographic, demographic, and usage criteria in various combinations. Once these possibilities have been identified, the next step for the marketer is to determine which segments to target.
2.2 Targeting
The goal for marketers once segments have been selected is to prioritize those that are likely to be most responsive. Competition is an important factor in considering which segments to focus on. If a major competitor has already chosen a particular market segment, that segment might not be as promising to you as another segment that has not yet been selected by the competition.
Consequently, when considering which specific market segments to target, it is important to consider the activities of the competition — both direct and indirect competitors.
Direct competitors are fairly obvious. Target is a direct competitor for Walmart. Red Lobster is a direct competitor for Outback Steakhouse. Indirect competition can be more difficult to identify and is sometimes overlooked as a consideration.
Indirect competitors represent alternatives to your product. For instance, indirect competition for Target and Walmart could be a wide range of other stores, both brick and mortar and online. Local grocery stores (or eating at home) represent indirect competition for both Red Lobster and Outback Steakhouse.
Thoroughly understanding the competition for your products and services — direct and indirect — can help you to be more precise in targeting specific segments that are most likely to respond to what you have to offer. You will want to target those segments where you believe you can have the most impact because the attributes of your products or service (e.g., quality, price, service, etc.) are competitive when compared to these other options.
Keep in mind, though, that the segment that offers the most in terms of numbers of potential customers is not necessarily the segment you should select. These obvious segments have most likely already been targeted by your competitors. Your best opportunities may be in smaller segments that have not yet been pursued by others — even though the numbers may be smaller, the potential for positive impact will be greater.
2.3 Positioning
According to the American Marketing Association, “positioning refers to the customer’s perceptions of the place a product or brand occupies in a market segment.” In some markets, a position is achieved by associating the benefits of a brand with the needs or lifestyle of the segments. More often, positioning involves the differentiation of the company’s offering from the competition by making or implying a comparison in terms of specific attributes.
Walmart has positioned itself as the low price leader. Its positioning statement prominently displayed on its website and in communication materials includes the statement: “Always low prices. Always.” Contrast this position with that of Nordstrom, which states that “the company’s philosophy has remained unchanged for more than 100 years since its establishment by John W. Nordstrom in 1901: offer the customer the best possible service, selection, quality, and value.” Nordstrom has selected a position based on service, selection, quality, and value — not price. Subtly different, yet clearly apparent to consumers who have shopped at both stores.
Your company may already have a stated mission and perhaps even an established segmenting, targeting, and positioning strategy in place. Even so, it’s important to revisit your statements and strategies regularly to ensure they are still relevant and appropriate.
3. Your USP — Unique Selling Proposition
Another important consideration in marketing is what is known as a “unique selling proposition” or USP. A USP represents something about your product or service that is different from competing products and services in important ways which represent value for your potential customers. It’s what makes you not only different, but valued. Clarifying your USP can help you establish a strong position in your marketplace and can also serve as the basis for the direct mail messages (words and images) that you will eventually create.
Your USP conveys those qualities that are unique in that they are about what you have to offer; something that none of your competitors have to offer. Selling in that it’s a benefit — something that will appeal to a potential customer. Proposition in that it’s an offer you’re making to people who buy your product. After all, if your product is just like all the rest, why would anybody choose you? There has to be something that sets you apart from the crowd. That something can be as simple as a good location or a low price. Or, it can be as complex as a refined manufacturing technique that allows your product to literally last forever.
What does your company’s product or service offer that nobody else has, or that very few others have to offer? Do you give a full money-back guarantee? Does your product experience extend back many years? Do you offer free maintenance? Do customers receive an add-on gift for making a purchase? Does your product differ in some integral way from your competitors’ products?
In some cases, your USP may be very apparent. In other cases, you may need to spend a great deal of time thinking