Why door-drops are in it for long term

Mark-Davies_smallIn these days of short lead-times and ever tighter campaign budgets, some brands think they are backing a safe horse by ploughing their marketing spend into digital.
Yet by putting all their eggs in to the digital basket, most are missing a trick, as often all these campaigns do is attract deal-hungry shoppers who constantly chop and change who they buy from.
Take the insurance market. On a short-term measure, the online aggregators look very attractive from a cost per response or cost per policy basis.
One well-known insurance brand has been so seduced by this, that it has cut out almost all other media to plough its resources into the online aggregators.
And, because of this, it found it could cut out almost all of its marketing department, too. Now, while this no doubt brought great cheers from the finance director, the company has now subordinated its brand to those of GoCompare and Comparethemarket and its ilk with who knows what long-term detriment?
By signing up to an acquisition channel which is by its very definition promiscuous, it is now compounding its problems by watching the majority of those customers acquired in this way, go back to the aggregators 12 months on and find the next best deal.
We all know that the cost of acquisition is rarely recouped in the first year and so this particular firm is actually eroding its business by taking on more and more, less and less, profitable customers.
The evidence is there for all to see. A recent study by Mike Colling & Company, “Balancing long and short-term effectiveness”, highlighted the relative merits of customers acquired by different media channels.
It confirmed many of the worst fears about digital shoppers, with customers coming from TV or online channels under 60% likely to be retained. Yet after four years from the date of acquisition, customers recruited via a door drop were 80% more likely to have remained loyal.
When it comes to repeat purchase, door drops win the day again, with customers recruited via door-to-door twice as likely to repeat purchase than those recruited via the web.
And finally in terms of long-term value, over a 5-year period, door drop customers drove 50% more net income than those who came via broadcast media.
Now, if all you’re interested in is a short-sharp burst of customers coming through the door, feel free to ignore these figures. However, if want to build your customer base into a long-term asset, providing future growth for the entire business – and are prepared to wait for the full effects of a door-drop campaign to unfold – there is only really only one medium for you…

Mark Davies is managing director of TNT Post DoorDrop Media UK

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