Marketing that focuses more on the purchase process is designed to halt the declining response rates in Direct Marketing. Here, the customer is strategically incited to make a purchase, says Professor Dr Christian Belz, Professor of Marketing at Switzerland’s University of St Gallen, in a talk with Asendia.
Asendia: Professor Dr Belz, Direct Marketing continues to generate fewer and fewer responses. Can you name an example of this?
Professor Dr Belz: We see examples everywhere. Whenever we sent out 10,000 brochures for seminars in our institute, registrations would start flowing in over the following three to four weeks. Today, absolutely nothing happens directly. But still, we haven’t stopped sending. Now several rounds are needed to acquire suitable participants following the initial expression of interest. In short – you need to stay on top of things. Direct marketing isn’t obsolete, but there is room for optimisation.
What are the reasons for the decline in the effect of direct marketing?
The many opportunities that customers have today have resulted in them really giving very few things their full attention. That’s why I talk about a slowdown in business. The time between interest or positive sentiments and the actual purchase is getting longer and longer. Identification with a company, product or service alone is not enough.
You aim to counter this trend and get the ball rolling again with marketing that incites the customer to act. How do you intend to get this ball rolling again?
Any action performed by a customer is more concrete than a thought or feeling. However, it is important to keep a perspective of the purchase process as a whole. The purpose of marketing is to incite the customer to make a purchase. If we can identify action sequences and initiate them, we are more likely to achieve this goal.
The basis is provided by customer micro-processes that have been the subject of research. To obtain a mortgage or buy a bicycle, customers go through between 30 and 50 interim steps. This is where companies need to act, decrypting the purchase process and finding out which points may cause the customer to abandon this plan.
Can you name a specific example of marketing that incites the customer to act?
There are companies that only focus on actual customer actions. These include Google and Amazon. The structure of the Internet has established new, streamlined customer processes that do not involve 30 to 50 steps to purchase. Moreover, some businesses held in high esteem have changed purchasing habits, be it the airline easyJet, or Nespresso, or Starbucks. It’s not the coffee that’s new, it’s the customer process combined with the experience that the customer is offered.
What role does the benefit for the customer play in this?
The benefit for the customer is always a core point of reference. However, the focus is not only on the selection of products or services – the customer may present different benefit constellations on the way to the purchase. It’s not just a service that is ‘sold’, but also the entire process. This is the case with Nespresso, for example. Here, the coffee capsules are supplied upon request with an exclusive design or are purchased in exclusive stores – the customer always has the feeling of ‘being part of it’.
"It’s a good idea to conduct market research on the basis of specific customer experiences, weight actions and link it with real purchases."
Do you believe that social media and social networks will replace direct marketing?
It’s not the media that’s of relevance in terms of access; rather, the content and target groups are of core importance. A company may use social media, but they don’t have to. Direct marketing can yet be optimised in many ways in order to incite the customer to make a purchase. The new systems complement the old ones, but they rarely replace them. Only the weightings shift.
What information can businesses obtain from customer feedback and what benefits can be derived from them?
Whenever the customer wants something from us, this is bullseye marketing. We also acquire customer feedback by way of market research, customer workshops, micro-behaviour analysis and analytical CRM. Analysing a small number of customers in depth is usually more productive than superficially querying many customers. However, any market research that focuses on the customer’s identifications and own interpretations can be deceptive, because customers do not say how they act. It’s a good idea to conduct market research on the basis of specific customer experiences, weight actions and link it with real purchases. This use of deceptive market research is widespread, by the way.
About Professor Dr Christian Belz
Professor Dr Christian Belz Professor of Marketing at Switzerland’s University of St Gallen and Managing Director of the Institute of Marketing E-mail: firstname.lastname@example.org