Competence Focus on buying processes Swiss Post

							KEyNoTE   Direct marketing




  Focus on buying processes

  The response rate to traditional direct marketing methods is decreasing all the time. Economists
  are now looking to generate new impetus with action-triggering marketing. Marketing is set to
  become more real and be based more closely on the buying process.
Competence of Swiss Post International
    KEyNoTE     Direct marketing                                                                                     Competence of Swiss Post International




    By Hartmut Wolf




    ”T
                 he reach of marketing is de-       hectic lifestyle. For Belz, two aspects are         lated scenarios of before, during and af-
                 creasing and the response to       therefore decisive in mastering the chal-           ter the purchase are not comprehensive
                 direct marketing is in decline,”   lenges:                                             enough. You can only persuade custom-
    says Prof. Dr. Christian Belz from the Insti-                                                       ers who show an initial interest to actu-
    tute of Marketing at the University of          – the offering must be positioned in the            ally make the purchase if you tap into
    St. Gallen, Switzerland. This trend began         customer’s mind as a desirable brand and          their behaviour.”
    to emerge years ago. The response rate to       – must focus on concrete actions of the
    a double-page ad for a trial subscription of      customer while being closely linked to
    Geo in German magazine Stern was 8% in            the buying process.
    1960. In 2006, the response rate was
                                                                                                        “It is all about tapping into
    down to 0.003%. This means that the re-         Buying a car is an example that illustrates         the actual motivation for
    sponse rate decreased by a factor of            the approach based on action-triggering
    2,700.                                          marketing. The analysis by the director of
                                                                                                        buying.”
                                                    the Institute of Marketing reveals that “a
    Decoding buying processes in detail             total of 55 steps are completed from the
                                                    initial idea to the actual purchase. Com-           For direct marketing this means avoiding
    The reasons for the diminishing effect of       panies need to consider this, decode the            advertising cars with nice pictures which
    traditional marketing approaches include        buying process in detail and establish the          reflect driving fun and speed. “It is rather
    information overload, increasingly inter-       critical aspects which may possibly lead            about tapping into the actual motivation
    changeable services and quite simply a          to the purchase not going ahead. Simu-              for buying,” says Belz. “This may be the




    “Companies first need
    to analyse how
    their marketing works.”




                                                                           Prof. Dr. Christian Belz is the managing director of the Institute of Marketing
                                                                           at the University of St. Gallen, Switzerland




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KEyNoTE   Direct Marketing   Competence of Swiss Post International
    KEyNoTE     Direct marketing                                                                                      Competence of Swiss Post International




    wish for a larger vehicle, replacing an older car or the opportunity      Innovation is the main challenge
    of a long test drive. The technology behind a new multifunction
    lever is not the real sales argument. What will sell the car is that it   Innovation in dialogue marketing is becoming an ever greater
    offers enough space for the whole family.” According to Belz, the         challenge for companies. In general, the fine-tuning required is
    best example of clear positioning that highlights the customer            minimal but worthwhile. Companies often forget to use custom-
    benefit is razor manufacturer Gillette’s advertising. The company         er information as a strategic resource. The economist explains,
    simply advertises a clean shave with great success and dispenses          “There is still vast potential here. Such information is only of use
    with ancillary scenarios.                                                 if marketing and sales interact efficiently, or there is a multi-
                                                                              channel and cross-media combination.” To date, the potential has
                                                                              not been exploited. “On a scale of one to ten for professionalism,
                                                                              most companies have a score below five.”
    “Intrinsic logic must counter vague
    marketing.”
                                                                              “Every time a customer makes a purchase, it
    Today, a growing number of companies embrace this. In the wake            means that the product, time and channel
    of the financial and economic crisis, marketing decision-makers
    are refocusing on substance and clear brand logic. The advice
                                                                              are right. That’s bull’s eye marketing.”
    from Belz is for “companies to first analyse how their marketing
    works”. Is it driven by the brand approach, customer relationship
    management (CRM) or shop floor selling? “Intrinsic logic must             According to Belz, inbound marketing is another promising ap-
    counter vague marketing. To achieve this, companies require ef-           proach. “Every time a customer makes a purchase, it means that
    fective and integrated marketing and sales systems rather than            the product, time and channel are right for him. That’s bull’s eye
    randomly added individual measures.” Those who take their lead            marketing.” However, often it is not possible to provide individual
    from customers’ actions will avoid the danger of their message            customer advice. Price pressure is extreme in many markets and
    lacking focus.                                                            industries so that there is no leeway for sensible solutions and
                                                                              good service, and the quality suffers.
    Customer proximity is essential for mailshots
                                                                              Innovative marketing from the word go
    “Access via isolated tools and media is always wrong if you are
    trying to achieve a breakthrough with your marketing,” explains           CRM specialists at airlines have shown that there is another way.
    Belz. A typical example is the ubiquitous topic of the social media.      Their pricing is based on actual customer response on the Inter-
    “In many cases, their usefulness is limited, because they do not          net. If there is particularly high demand in response to special of-
    reach every potential customer.” For this reason alone mailshots          fers for a specific destination, the price goes up. If any seats are
    cannot be replaced by new marketing tools, and they will con-             still available shortly before the flight departs, cheap tickets are
    tinue to induce customers to buy a certain product or service. In         advertised at the last minute or frequent flyers targeted directly.
    this respect, customer proximity is a decisive factor. “Decentral-        “Pricing, market performance, distribution and customer relation-
    ised marketing and bottom-up marketing are far more suitable              ship management all converge to facilitate innovative marketing
    than cleverly constructed top-down marketing,” says Belz. “Face-          from the word go,” says Belz. 
    to-face meetings in the store or factory outlet have a huge im-
    pact. For direct marketing, this means that the direction and con-
    tent need to change and be more closely aligned with the actual
    buying process.”

                                                                               The University of St. Gallen has run its “Actual customer behaviour – real
                                                                               marketing” programme in cooperation with around 25 partner companies
                                                                               for the past six years. It develops new solutions for dialogue with custom-
                                                                               ers. Interested companies should contact the Institute of Marketing directly.
                                                                               www.ifm.unisg.ch




                                                                              Sources: “Innovationen im Kundendialog – reales Kundenverhalten und reales
                                                                              Marketing” (Innovation in customer dialogue – actual customer behaviour and
                                                                              real marketing), published by Christian Belz, Gabler Verlag 2011, Wiesbaden.
                                                                              “Abschied vom Branding. Wie man Kunden wirklich ans Kaufen führt” (Saying
                                                                              goodbye to branding. How to actually get customers to buy) by Marc Rutsch-
                                                                              mann, Gabler Verlag 2011, Wiesbaden.



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