Source: Flickr, Alex E Proimos

In 2009, the economy shaped the trends that dominated the direct marketing industry.  Many companies found themselves challenged by an unprecedented recession.

People were asked to do more with less.  Companies took a look at their programs – especially marketing programs – in an effort to cut costs.  Customer service and retention became a top priority with a major focus on analyzing ROI.  Take a look at the top trends of 2009 and their impact on the direct marketing industry:

Top 5 Trends of 2009

1. Focus on metrics and ROI

With limited funds and looming threats of budget cuts, many marketing managers depended on marketing campaigns with easily obtainable metrics to showcase the ROI of their campaigns.  Due to the pressure from company executives, marketing managers cut any programs that could not demonstrate a positive ROI in favor of ones that could.

The focus on ROI drew many marketers to launch or invest more in direct marketing campaigns where ROI can easily be calculated.  Marketers graded campaigns on their ROI and placed more emphasis in reaching optimal service levels.

2. Customer satisfaction, retention and personalization

Companies are not the only ones strapped for cash – consumers are feeling the pinch.  With less disposable income, customers are reluctant to spend their money needlessly.  Instead of turning to their normal buying habits, they are more inclined to shop around for the cheapest price.

To prevent customers from straying, marketers have invested more money into customer satisfaction and retention programs.  A satisfied customer is less likely to switch brands.  Exceeding customer expectations through excellent service will give the customer the feeling they are getting more value for the price of the product/service

In 2009, we saw the revision of call scripts to make the customer experience more.  Clients made customer service a top priority.  Marketers tested scripts, demanded high service levels and focused on personalized service.

The personalization demonstrated each company’s dedication to the customer as an individual.  Consumers are less likely to switch brands if they feel a personal connection to the company.  The more personalized the customer experience is the more connected they feel to the company – the company is no longer a faceless entity.

Direct marketing has shifted from mass distribution and reach to precise targeting of specific market segments to increase personalization and relevancy.

3. Outsourcing to cut costs

As companies reevaluate their cost structures, they turn to outsourcing to increase the effectiveness of auxiliary programs.  Outsourcing provides a cost-effective way to achieve campaign goals without losing focus or removing resources from the company’s core competency.

We have seen an increase in the number of organizations seeking to outsource previously inhouse fulfillment or contact center programs to reduce costs.  Companies with existing outsourced programs have continued to invest in outsourcing reaping the benefits of dedicated account management teams.

4. Mobile marketing

Although mobile marketing hasn’t taken off in the US as quickly as in Asia or Europe, it has continued to steadily rise with the increase of mobile devices with browser and internet capabilities.  In an effort to diversify their marketing campaigns and increase ROI, marketers increased the amount of spending on mobile advertising and selling programs.

Many outbound selling programs and brand loyalty programs now incorporate some form of mobile marketing in either the form of SMS coupons and exclusive offers or advertisements made for mobile web browsers.

4. Digital marketing campaigns

Social media and digital marketing have become a bigger part of the marketer’s arsenal.  Although harder to determine ROI than traditional direct marketing campaigns, digital campaigns like e-mail marketing and social media are usually cheaper and establish a deeper connection with customers.

Social media and other inbound marketing programs are on the rise.  Companies are slowly starting to realize the long term value of online relationship building programs.  Establishing the relationship requires a long term strategy- results slowly build up over time.  Marketers still face a difficulty in calculating an accurate measurement of social media ROI.

5. Decline of traditional marketing

This year saw the sharp drop of spending on traditional marketing campaigns such as media and publication advertising and direct mail.  Marketers are trying to differentiate themselves through innovation in the digital realm.

Not only are they spending money on building relationships but they are investing in paid per click (PPC) campaigns and search engine optimization (SEO) instead of traditional advertising to increase awareness.  Direct mail volume continues to decline as mortgage and credit card companies pull back on their direct mail programs.  Companies are hesitant to use direct mail for mass campaigns – instead direct mail programs are smaller and more personalized.

What to look out for in 2010

All signs point towards the trends in 2009 continuing to strengthen and shape the direct marketing segment.  While the worst may be over regarding the recession, the effects will linger causing companies to hesitate spending their budgets on just one campaign.   Instead, we will see an increased number of “mini” campaigns with a high focus on ROI.  As the focus on ROI increases, companies will find new ways to calculate ROI for direct mail, digital and social media campaigns.

All companies should be looking for different ways to exceed customer expectations, drive value and continuously improve processes and reduce costs.  As companies continue to outsource programs, they need to find ways of integrating their campaigns across channels to maximize effectiveness.  Inbound and outbound campaigns need to balance each other – companies need to establish both “push” and “pull” campaigns.

Now is the time to reevaluate stagnant programs, future goals and differentiate themselves through innovative, integrated strategies.  2010 will showcase the start of the integration of social media, digital and direct marketing for increased ROI.