Augmenting Direct Mail Through Real-Time Customer Loyalty Programs

Its no surprise that US-based marketing professionals are debating the merits and future of direct mail. While the direct mail market grew 3.6 percent to just over $196 billion in 2001, the recession coupled with the rising cost of postage, are causing marketers to rethink how they reach out to customers and prospects.

Denise Garcia, Reasearch Director GartnerGroup

Not surprisingly, the Gartner report has facilitated a great deal of discussion, and many marketers are disputing the findings. But whether or not email is a reason for the declining number of direct mail campaigns, this report makes clear the need for a more personalized, easily track-able approach to reaching out to customers and prospects and shows how, in doing so, companies can generate better, more cost-effective programs that make customers more willing to "act."

For example, a typical restaurant chain could leverage its existing customer loyalty database by instituting a customer loyalty program that offers real-time, immediate reward earning opportunities with the potential for to members to receive an updated status every time they dine. Additionally, that same restaurant chain could take advantage of other real-time messaging capabilities. Things like special coupon offers that could be based on actual meal and/or beverage preferences can be awarded instantly at the point of sale or when the bill arrives. Or the restaurant could use this real-time technology to run a special sweepstakes promotion that could automatically notify diners that they have been selected to receive a prize or offer simply by utilizing their membership card. Various campaigns that target different messages and offers to different members (right down to the individual if desired) can quickly and cost effectively be deployed, in a variety of ways.

In addition to alerting their customers of special events such as double-reward point days, theme dinners, wine tasting parties, etc, restaurant marketing teams are able to tap into the customer loyalty data housed by a real-time marketing vendor, such as Ernex , to conduct more effective "non-real-time" campaigns. For example, an organization could realistically spend a small fortune in direct mail efforts in an attempt to market to its entire customer base. If a medium-sized restaurant chain, for instance, had more than 300,000 diners in its customer base - not an unrealistic number for a nation-wide chain - then they could be looking at an overall cost of more than $100,000 for this one mailing alone. Instead, using data compiled though the Ernex loyalty database host, the chain's management would be able to review and send more traditional direct mail campaigns to only those members who have not visited their nearby restaurant within a designated period of time. By leveraging this real-time data, the restaurant team would be able to create a highly effective "miss-you" postcard mailing that not only generate a high level of response, but also allows the chain saves thousands of dollars in printing and shipping costs.

Although many restaurant chains use traditional direct mail campaigns, they should certainly look to augment those efforts through cost effective means such as email and the latest breakthroughs in real time marketing technology to communicate to their customers in a meaningful way. The decision to send a message to a customer in any channel comes down to the cost to communicate, and the results. Knowledge about customers gained from their loyalty program and the associated analysis of results gives restaurant organizations the opportunity to leverage all three mediums to their benefit.

So regardless of the medium, marketers need to listen and reward customers based on individual preferences. After all, the marketing delivery vehicle will not keep them coming back for more. It is responding to customer preferences and then rewarding these loyal patrons for their business that will ultimately make the difference.