Abstract:

Direct marketing is increasing in popularity as a means of selling to the consumer and business customer, it is nevertheless one of the most wasteful and ineffective forms of marketing. Direct marketers talk glibly of 2% effective rates from a mailing being a success, when perhaps they should consider the reality of 98% failure. In the age of the greening of the western world the implication is that there is a vast amount of waste as a result of ineffective mailings to consumers. Spending on market research by direct marketers is pitifully small and yet the use of lifestyle and segmentation research could make a significant contribution to refining the direct marketing process, maximising opportunity and reducing costs and waste. This paper examines the current state of research in direct marketing - principally in the U.S. (where the experience is markedly greater) but also with observations from Europe - and how the direct marketing community can refine existing approaches and utilize new research techniques to advantage. Discussion extends from macro approaches including simple socio-demographic analysis of databases through to the more sophisticated applications of geodemographic clustering and lifestyle segmentation and the potential for the application of risk analysis and neural network driven expert systems. The paper concludes that the industry could make greater utilisation of the advanced research technology at its disposal to decrease waste and increase effectiveness.