Direct Marketing Trends for 2006

CSO Insights recently completed a worldwide survey of 281 companies that focused on assessing what priorities these organizations were setting for their target marketing programs (direct mail, telemarketing, database management, Web marketing, etc.); how they were planning to achieve these objectives; and what challenges they were encountering. The study analyzed more than 30 aspects of target marketing, and a number of key trends surfaced regarding the state of marketing today. However, it's the insight into where we are going that piqued my interest. How will the target marketing landscape change over the coming year? To answer that question we asked the study participants the following: "Looking forward one year, how do you see the importance changing for the following targeted marketing approaches inside your company?" The choices were decreasing significantly, decreasing, no change, increasing, and increasing significantly. The figure outlines areas in which organizations foresee their target marketing efforts increasing or increasing significantly. Clearly, the significance of the Internet is coming to center stage for marketing organizations: Eighty percent of firms stated that Web marketing would be taking on an increasingly important role in their target marketing activities. Investments in Web sites and micro sites were seen as "very important" or "mission critical" to 53 percent of the firms surveyed. In addition, search optimization was seen as a key issue to improve. Beyond having great online Web sites for customers and prospects, more than 70 percent of firms surveyed stated they also plan to invest more in email marketing.
Another interesting part of this result is the rising importance of database marketing. As companies seek to ensure that their messages are received, marketing strategy is increasingly being driven by insights into unique customer segments or individual customers. Based on these trends, we expect to see increased investments in two aspects of technology--marketing automation and analytics. On the marketing automation front, tools that help create individualized portals for customers and prospects, directly link data gathered from Web visits into CRM systems, and support e-marketing campaigns will be required for target marketing groups to optimize the use of the Web in their marketing plans. Improved analytical capabilities will be required to segment targeted markets more effectively. To execute effective target marketing campaigns companies need to personalize their messaging as much as possible. This is especially true for email campaigns where clients can filter your messages out forever if they feel they are being spamed. Fortunately, as demand for targeted marketing increases so does the availability of technology to meet the demand. We continue to see development investments on the part of traditional CRM players, as well as a group of new best-of-breed vendors, which is resulting in a host of new applications to support marketing. For 2006 the Web will increase in importance and CRM usage in marketing will increase accordingly. Jim Dickie is a partner with CSO Insights, a research firm that specializes in benchmarking CRM and sales effectiveness initiatives. He can be reached at www.csoinsights.com

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