How direct mail can help suffering CPG brands
The economic recession put many people in a difficult financial situation, and companies that use address standardization for direct mail marketing campaigns have been impacted as well. The effects have been physical as well as psychological, and the more emotional changes may have altered consumer shopping behavior more than some retailers had originally thought. In fact, 79 percent of respondents to "The 2013 American Pantry Study" conducted by Deloitte indicated they believe the country is still in a recession. Moreover, 78 percent believe the current economic landscape is the new normal.
As a result, sales for consumer packaged goods have been suffering. Waning customer loyalty has cut into the profit margins of many brand name companies. The Deloitte study also indicated the trend of consumers buying store-brand goods is here to stay. Businesses looking to regain their foothold in the market and improve visibility of their brand should rethink the importance of direct mail as a tool to reward their most loyal customers.
The new normal?
The global recession forced many shoppers to move from purchasing name brands to more store brands. Yet, even as the economic outlook has improved, many consumers have continued to purchase generic options of goods. The Deloitte study reported in 2012, 38 percent of consumers bought products in categories they hadn't previously considered. This is up 6 percent from 2011. More importantly, fewer customers believe they are sacrificing the quality of products they purchased by buying store-brand goods than in previous years, and fewer respondents said they planned to buy brand-name goods when the economy becomes more stable, dropping from 35 to 27 percent. For businesses that depend on expanding the visibility of their brand, tailoring direct-mail marketing to loyal customers is a best practice.
Rewarding loyalty with value
A Deloitte infographic emphasized the importance of customer loyalty programs. According to the research, 58 percent of consumers who own a specific rewards card use it every time they shop. Having kept track of the customers who most frequently patronize the business, a company can readily use the information to offer a VIP reward program that shows its gratitude to consumers with deep savings. Direct mailing is perfect for this approach. The card can be distributed to the most loyal consumers through personalized mailings that companies can send out with the help of address validation software that ensures the rewards card or VIP savings are delivered to the correct individual.