5 ways to trim the fat from your direct-marketing budget

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With the recession prompting many executives to rethink their spending priorities, marketing budgets are already looking pretty lean. So one might wonder how to trim even more fat from expenditures as fiscal planning for 2010 gains steam.

“Straight Line” posed this question to leading direct marketers, who shared the following tips for conserving much-needed resources in a tough economy.

1. Ensure tests are significant. Testing is, of course, a fundamental part of direct marketing. But Grant Johnson, founder and CEO of Brookfield, Wis.-based Johnson Direct, advises companies to be wary of what they're testing.

“Don't test insignificant things just to say you tested,” he said. “These would include elements like the color of a signature, who's signing the letter … outer envelope teaser copy—and changing nothing else—and adding PPS and PPPS lines to the copy.”

Margie Chiu, exec VP-strategic services at Wunderman, said marketers should also avoid statistically insignificant tests.

“An easy way to ensure significance is the rule of 100,” Chiu said. “Test cells should be large enough to yield at least 100 responses. Or better yet, calculate significance using one of the many free tools out there. Just search for ‘statistical significance calculator.' ”

2. Look before leaping into emerging technologies. Today's marketers have no shortage of new media with which to experiment. But, according to Chiu, the latest and greatest marketing vehicles—things like mobile applications and social media—aren't necessarily the best investments.

“Don't fall victim to ‘bright shiny object syndrome,' ” she said. “With all the technological innovations available to marketers today, invest some time in understanding the technology adoption and usage profiles of your prospects and customers. Instead of an iPhone app, perhaps you should be considering a BlackBerry app, or maybe even no app at all.”

3. Reap the rewards of segmentation. According to Megan Smith, marketing consultant at Richards Relationship Marketing, too many direct-marketing programs suffer from “overoptimization”—so they're only reaching a fraction of the potential target audience—or that antiquated approach known as “spray and pray.”

“Each … has the opportunity to refine the strategy to increase efficiency, increase results and drive incremental revenue,” Smith said.

Among the best solutions is a well-planned segmentation strategy—something Draftfcb Senior VP-Group Management Director Amanda Gosling believes is especially important when marketing dollars are limited.

“Some may think that this increases costs by requiring differential strategies,” Gosling said. “But when coupled with templated approaches to creative development, [segmentation] can serve to cut costs and increase effectiveness.”

“It is always more valuable to send another direct marketing [piece] to your highest-ranking segments than it is to send even one piece to your lower-ranking segments,” said Dan McDade, president-CEO of -prospect development company PointClear.

4. Go multichannel. Despite an abundance of options, McDade said he believes too many marketers—especially in the b-to-b world—continue to rely on single-media campaigns that are more expensive and less effective than their multichannel offerings.

“When you're trying to reach executives at the highest level, it takes a lot of touches,” McDade said. “It's better to combine a few well-targeted e-mails with a phone call—and maybe a direct mail piece—than to continually bang away on the phone and eat up the prospect's time. As simple as that sounds, it's not done right very often.”

5. Take advantage of geotargeting. The days of buying remnant advertising inventory are over, said Michael Radigan, VP-interactive at Javelin Direct. “It doesn't matter if it costs a penny, a dollar or a million [dollars], there's a certain point where you're oversaturating the market or talking to customers that don't want to be talked to,” he said.

For companies that are active in the mobile space, new software for the iPhone can help cut out ineffective or irrelevant ad buys. Leveraging the device's GPS capabilities enables marketers to target iPhone users based on where they are in real time.

“Now it's up to marketers to figure out how to message customers who come close to your store without making them feel like they're being stalked,” Radigan said. “For that, the age-old rule of marketing applies: Offer them something of real value.”

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